Changes to the composition of Mazars’s Shanghai clientele have led to the establishment of several international desks. Office founder and managing partner Julie Laulusa tells Carolyn Canham about managing foreign investment clients in China.
An understanding of the intricacies of operating in China and in the West is vital to Mazars’s Shanghai business, according to managing partner Julie Laulusa. Although based in China, the firm focuses on a stable of international clients from Europe, the UK and US.
Laulusa believes she is well equipped for the cultural clashes involved in the job. She is ethnically Chinese but was raised and studied in France and also studied in the US. Laulusa began her career with Deloitte France, then moved to PricewaterhouseCoopers before joining French firm RSM Salustro when it offered her the opportunity to move to China to lead the firm’s Shanghai office. While she was there, Laulusa was recruited by the head of Mazars in mainland China, Thierry Labarre, to establish and lead the firm’s Shanghai office.
The office was opened in 2002 with three people. There are now 130 and it is expected to reach 150 before the end of the year.
Traditional bread-winners Laulusa says the two main service lines provided by the Mazars’s Shanghai office are traditional bread-winners – audit, and due diligence for mergers and acquisitions. The third is bookkeeping and consulting, which she describes as a vital lead service to establishing more in-depth work.
“When international companies invest in China, usually they set up a representative office,” Laulusa explains. “The representative office doesn’t want to have very heavy costs so they outsource quite a lot of services and that is why we handle [work such as bookkeeping]. But it doesn’t mean that they are very minor clients, they are quite important because maybe a few months or one year later they would like to acquire a company or set up a very big manufacturing centre in China, so we switch to [audit in preparation for] acquisition, or to audit of those newly set-up companies.”
The Mazars Shanghai office has no Chinese clients; they are all international companies investing, or looking to invest, in China. Laulusa says that when the Shanghai office opened, about 90 percent of the clients were French – Mazars’s traditional stronghold. That has now dropped to about 65 percent. Laulusa says the evolution is not due to a reduction in the number of French clients, but rather an increase in other international clients.
This shift has led to the establishment of a selection of international desks, developed to cater for clients from the United States, the United Kingdom, Spain, Italy and Germany. Laulusa estimates that US clients now comprise about 20 percent of the office’s clientele. Italian clients make up about 10 percent and the number of German clients is growing rapidly.
“We felt immediately that it was quite important to have some international desks. Mostly we have middle-market clients and I immediately found out that one issue was communication,” Laulusa says.
“When our international clients speak to our Chinese staff, it is not that they don’t understand, but the point is there are quite a lot of differences in culture… how the chartered accountants work and how the companies are organised. Our Chinese staff, even though they are used to working with international clients, they have never lived overseas, or if they have lived overseas, they did not have the chance to work with overseas companies, so when they raise a question they don’t understand what is behind the question.”
Laulusa cites two examples of communication barriers – one involves a misunderstanding between depreciation in terms of Chinese GAAP and depreciated costs in group accounts and the other involves differences in land deeds between China and Europe. “For Chinese accountants, if they do not know how [land deeds] work overseas, it would not occur to them to tell [clients] what kind of differences there are in China,” Laulusa explains.
The link between Mazars in China and Europe is being strengthened this month as the group is sponsoring the Asian delegation to the third annual Women’s Forum for the Economy and Society, which is being held in France. Laulusa, who is part of the delegation, says this is the first time there will be a full delegation from Asia at the forum.
“[The delegation will be composed of] young and competent professional women from Asia. So I think this is the first time that Asian women will have this type of exposure,” Laulusa explains, adding that the forum will be an opportunity to expose to the rest of the world the quality of the professional women in Asia.
“[Asian women] work quite hard and have a quite tough position. They did not have time or they did not have the opportunities to have such exposure (previously).”