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KPMG legal services division reports record revenue growth

KPMG’s legal services division revenue rose by more than 30 percent in 2018 in a record-setting performance, according to the firm that expects growth to continue in a burgeoning market that’s stoking concerns among traditional law firms about potential competition.

Such fast-paced expansion into the legal sector is in line with the three other Big Four accounting firms—Deloitte, EY, and PwC. Each has made major inroads into global legal services recently in jurisdictions outside the US where these firms are allowed to practice law.

KPMG said in a press release that its legal practice added 20 partners last year, expanding to more than 2,300 legal professionals worldwide.

The Big Four differ from most traditional law firms in that they offer many other services to clients aside from just legal advice, often leveraging their capabilities in tax, audit, technology and consulting.

The 30 percent growth includes revenue stemming from various legal services offerings, including mergers and acquisitions, tax law, global entity management, compliance matters, and legal tech solutions, Jurg Birri, KPMG’s global head of legal services, told Bloomberg Law in a written statement.

When asked how legal services growth at KPMG compared with that of other Big Four players, Birri said, “We are focused on providing forward-thinking and technology-led approaches and solutions for clients, in addition to more traditional legal services offerings. I can’t speak for the other firms, but at KPMG Global Legal Services, we have seen tremendous growth in terms of revenues and headcount, and expect that to continue.”

Birri added in a press release that he expects future activity for KPMG’s legal arm to come in part from “high-growth markets like China.”

KPMG said last month that it had expanded its law offerings to Hong Kong through its new affiliated legal practice, SF Lawyers. KPMG hopes to grow that office to 20 attorneys in its first year. At the same time, the firm expects to open an associated office in Shanghai later in 2019.

KPMG attributes part of its legal sector progress to the launch of its new Legal Operations and Transformation Services units that aim to assist legal departments in streamlining their operations.

That service is available across KPMG’s global network of lawyers and offers departments help with advancing their legal technology and finding proper sourcing for their work.

KPMG’s announcement comes as its professional services peers have made similar entrees into legal markets in Asia, South America, and the Middle East. Last September, for example, EY touted its extended legal services reach to more than 2,200 legal practitioners in more than 80 countries.

The Big Four are restricted by regulations and state bar rules from opening law offices in the US that serve domestic clients. Yet some have managed to gain a foothold, which has served to stoke concerns among US law firms about the possibility they may someday face tough competition from companies with significant size, international scope, advanced technology, and revenue advantages.

For example, PwC opened ILC Legal in Washington on 2017. That firm’s five lawyers—referred to on the firm’s website as partners and “special legal consultants”—only advise clients on international matters, and do not offer clients US legal consultation.

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Berry Appleman & Leiden LLP recognised by Best Lawyers®

Berry Appleman & Leiden (BAL) LLP, one of the world’s largest immigration law firms, has been named “Immigration Law Firm of the Year” by US News – Best Lawyers®. Only one law firm per legal practice area receives this recognition, making the award a significant achievement. BAL has also received a First Tier ranking in Houston, San Francisco and Washington, DC by Best Lawyers®.

The award caps a tremendous milestone year for the firm:

  • Opening of a 60-person office in mid-town Manhattan.
  • Establishing an unprecedented strategic alliance with Deloitte UK that combines the best of Deloitte’s scale, expertise and breadth outside of the US with BAL’s unparalleled legal expertise and high quality immigration services in the US.
  • Launching a large-scale Center of Excellence in Richardson, Texas to support over 600 cross-functional professionals including attorneys, legal and operational staff, as well as expansions of offices in Boston, Houston, McLean, Va. and Walnut Creek, Ca.
  • Unveiling of the industry’s first mobile immigration app, enabling anytime, anywhere case management across Android and iOS devices. The app is a component of Cobalt® the firm’s innovative digital immigration platform.

Commenting on the award, Managing Partner Jeremy Fudge stated, “This has been another extraordinary year for BAL. We have been quietly leading the industry for several years now and are honoured to receive the US News – Best Lawyers® ”Law Firm of the Year’ in immigration.”

About Best Lawyers®

Best Lawyers® “Law Firm of the Year” awards are country and practice area specific. They are determined based on a handful of factors, including: feedback from lawyers recognized by Best Lawyers® on individual lawyer and firm-wide work, the size and coverage of the firm in a specific practice area, historical analysis of the firm’s “Lawyer of the Year” awards in this area, and research surrounding the firm’s overall scope and areas of expertise.

About Berry Appleman & Leiden LLP

BAL is singularly focused on meeting the immigration challenges of corporate clients around the world in ways that make immigration more strategic and enable clients to be more successful. Established in 1980, the firm provides immigration expertise, top-notch information security and leading technology innovation like its Cobalt® digital immigration services platform. In 2018, the firm formed a strategic alliance with Deloitte UK to create the world’s first global immigration service delivery model. BAL and its leaders are highly ranked in every major legal publication, including Best Lawyers, Chambers, The Legal 500, and Who’s Who Legal. For more information about Berry Appleman & Leiden LLP, please visit: http://www.balglobal.com/

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China hits back at Trump with tariffs on $60 billion of US goods

China is to slap tariffs on an additional $60bn (£46bn) of imports from the United States in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump.

The latest moves represent a new step towards a full-scale trade war between the world’s two biggest economies. Further escalation is deemed likely because President Trump is facing low approval ratings ahead of the United States midterm elections in November, while China will not want to be seen to back down.

President Trump announced his latest escalation of the bitter trade standoff late on Monday, promising to introduce the additional border taxes of 10% on Chinese goods from next week.

The tariffs – designed to make United States domestic products more competitive against foreign imports – apply to almost 6,000 items, including consumer goods such as luggage and electronics, housewares and food.

The United States president threatened further tariffs on an additional $276bn of goods if Beijing unveils retaliatory measures – a step that would mean tariffs on all Chinese imports to the United States and equate to 4% of world trade.

Early on Tuesday he tweeted to accuse China of “actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me”.

The United States president added: “What China does not understand is that these people are great patriots and fully understand that China has been taking advantage of the United States on trade for many years.

“They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”

However, China then unveiled $60bn of tariffs on US imports including aircraft and coffee.

Ahead of China’s latest move, Jack Ma, the founder of e-commerce giant Alibaba and one of the country’s wealthiest men, warned the conflict could drag on for 20 years and would be a “mess” for all parties.

China faces difficulty in responding on a scale equal to President Trump’s new tariffs because its annual imports from the United States total only about $130bn, while its exports to the United States total more than $500bn.

However, analysts said the Chinese government had a comprehensive toolbox of alternative measures it could deploy to disrupt United States businesses operating in China – and might even devalue its currency to offset the impact of the tariffs.

Erik Britton of research firm Fathom Consulting said he believed China was eventually likely to capitulate and would enter fresh talks to end the threat of tariffs as a result of the trade imbalance.

“Our likeliest outcome is that China yields. They’ve been in a game of chicken – only the United States is driving a 40-tonne truck and China is driving a Fiat Cinquecento.”

Britton added that President Trump was probably using the threat of tariffs to force Beijing to change its economic policies covering United States companies.

“The point is they [the United States] want something to change,” he said. “When I threaten my kids with stopping their pocket money it’s not that I want to raise money. It’s that I want them to tidy their room.”

President Trump has argued Beijing uses “unfair” trade practices such as forcing the transfer of United States firms’ intellectual property when they operate in China. Some analysts, however, said the threat of tariffs could exacerbate these actions, rather than end them.

David Chmiel, the managing director of risk consultancy Global Torchlight, said: “There could be a weaponising of regulation by Beijing. You can see a situation where they target specific United States companies.”

Economists said this could have a significant impact as many United States companies – including Nike, General Electric and Apple – have operations in China. Disruption could range from invasive health and safety checks to tougher labour controls or rules on fire standards. Mergers and acquisitions could be made more difficult, and state contracts could be withheld from United States firms.

Keith Wade, the chief economist at Schroders, said: “Very zealous enforcement of regulations could make life quite difficult for companies. America is also probably more dependent on China than the official trade figures suggest.”

United States Census Bureau figures show China sells about $375bn more to the United States than goes the other way. However, Deutsche Bank reckons taking into account direct in-country sales by United States firms in China would give a $20bn surplus in favour of the United States.

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Blockchain technology will revolutionise these 5 industries

You’ve probably heard about blockchain technology through cryptocurrency, but did you know that blockchain technology is expected to revolutionise industries like real estate, transportation and even social justice?

Blockchain technology may have been made for bitcoin, but its potential to make transactions more secure is one of the most exciting possibilities for using this powerful technology. Innovation is most commonly known as the underlying algorithm of cryptocurrency. One day, businesses in every industry may use blockchain to record and verify every transaction. The decentralised characteristic of the utility makes it an appealing business resource, and enterprises covet the transparency and finality the digital recordkeeping application.

Blockchain Can Increase Trust & Accountability

Privacy issues are a concern for every American. With most businesses in the United States keeping their records and transactions mostly online, Americans have begun to become jaded as data breaches hit the news. While blockchain technology can’t prevent all data theft and cybercrime, it could help make transactions more secure, improving trust in businesses’ ability to protect consumer data. With cybercrime on the rise, the technology has arrived just in time. The first applications that will give way to blockchain are the most insecure transaction methods. From all of the disruption I’ve seen already in various industries, I believe that blockchain technology is a viable resource for any industry or field that conducts transactions.

Here are the five industries, institutions and fields that will experience the most exciting disruption due to blockchain technology in the near future.

The Finance Industry

Governments and large corporations are researching blockchain technology closely to unearth ways to utilise the resource. The finance industry is investigating blockchain intensely since fraud is a huge problem for banks and other financial organisations. Finance executives believe that the technology is a potentially ideal solution for security when transferring money from one account to another—always the most vulnerable point in any transaction. Blockchain may disrupt not only the field of digital security but also that of logistics and other fields across many industries. Cryptocurrency has also made its way into the crowdfunding and investment markets and led to the birth of crypto exchanges such as Okcoin, Poloniex and ShapeShift. This shift has not only opened up a number of new opportunities for individuals to invest, but also has created new job opportunities such as a crypto-investment banker. Although new, projections say that this position can expect to make as much as traditional investment bankers who have a median salary of approximately $81,339.

Another new feature brought on by blockchain tech is that investors can now buy into initial coin offerings (ICOs) in the same way that they buy into initial public offerings (IPOs). This is reshaping the investment world by eliminating geographical boundaries and speeding up the investment transaction process.

Social Justice

Enterprises and agencies could potentially use blockchain technology to securely record and verify inventories, monitor resources and redistribute assets. Via these means, the technology can pave the way toward a sharing economy. Inequality, income disparities and consistent income are serious problems in modern capitalist societies around the globe, and new technologies threaten to enhance these problems. Blockchain is a resource that can empower a sharing economy, and it can potentially accelerate the process of ensuring full inclusion in economic prosperity, rather than contribute to conditions that promote inequality and conflicts.

American Energy Grids

Energy grids in the United States are deteriorating and outdated. Today’s energy networks are vulnerable to elements such as natural disasters and climate changes. Many researchers are working on solutions to replace the outmoded system, and some believe that blockchain will provide the answer.

In Brooklyn, New York and other municipalities, participants in an energy experiment collect power using solar panels and exchange it using computerised “smart contracts.” The participants also install smart power meters as a part of the project. They use blockchain to secure and verify all transactions sans utility companies or any other third-party, saving on costs and increasing efficiency.

Blockchain technology could also help to fend off attacks from more than just Mother Nature. In 2018, information came to light that Russian hackers were able to gain access to United States electric grids, giving them the ability to cut off and control power. With our massive dependency on electricity, potential attacks could cause mayhem and economic damage. More secure networks, like those offered by the blockchain, could reduce the likelihood that hackers would be able to gain access to American energy grids.

The Real Estate Field

The real estate industry exemplifies the disruptive potential of blockchain technology. The transfer of real property is a complicated and extensive process, but blockchain technology can potentially allow property buyers and sellers to transfer property rights instantaneously. Sellers could use the technology to securely transfer titles and deeds to new owners, and buyers could pay for the transactions via cryptocurrency. Stakeholders could also use blockchain to send property information to the appropriate government agencies.

Closing costs are a big expense for homeowners and buyers alike. While blockchain technology won’t cut out commissions and related expenses, a simpler buying process could potentially reduce the cost and hassle of buying a home, making it more realistic for young people to get into the real estate market.

The Transportation Industry

Researchers imagine a future where blockchain and the Internet of Things (IoT) combine to make smart cities a reality. Municipalities could connect sensors for street signs, traffic lights, vehicles and other items to the IoT, enabling the rerouting of traffic for maximum efficiency. Scientists hope that by using blockchain in this manner they can reduce commute times, traffic congestion and vehicle emissions. The blockchain technology can also provide potential conveniences such as vehicle parking and be charging location and payment; traffic ticket payment; and accident and maintenance monitoring services.

Final Thoughts

Analysts forecast that bitcoin will achieve a total value of $1.2 trillion towards the end of 2018. However, forward-thinking individuals see the value of blockchain beyond its original application for digital currency transactions. Bitcoin took off rapidly as more people brought into the idea of a currency that’s free of government or institutional regulation and valued based on quantifiable, although highly complex, supply and demand. While the excitement about bitcoin is tempering, there’s great interest in its underlying blockchain technology. It’s hard to not see the value in cutting out middlemen, increasing security and saving precious time and expenses.

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China slams US “blackmailing” as Trump issues new trade threat

US President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods and Beijing warned it would retaliate, in a rapid escalation of the trade conflict between the world’s two biggest economies.

Trump’s latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.

It was retaliation, he said, for China’s decision to raise tariffs on $50 billion in US goods, which came after Trump announced similar tariffs on Chinese goods on Friday.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in a statement on Monday.

The comments sent global stock markets skidding and weakened both the dollar and the Chinese yuan on Tuesday. Shanghai stocks plunged to two-year lows.

China’s commerce ministry said Beijing will fight back with “qualitative” and “quantitative” measures if the United States publishes an additional list of tariffs on Chinese goods.

“Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions,” the ministry said in a statement.

“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world.”

US business groups said members were bracing for a backlash from the Chinese government that would affect all American firms in China, not just in sectors facing tariffs.

Jacob Parker, vice president of China operations at the US-China Business Council in Beijing, said China would undoubtedly “begin looking at other ways to enforce action against U.S companies that are operating in the market.”

Some companies have reported Beijing is meeting with Chinese businesses to discuss shifting contracts for US goods and services to suppliers from Europe or Japan, or to local Chinese firms, Parker said.

Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of talks failed to resolve US complaints over Chinese industrial policies, lack of market access in China and a $375 billion US trade deficit.

US Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions. He did not say when the new target list would be unveiled.

“As China hawks, like Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable,” said Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.

Tit-For-Tat

On Friday, Trump said he was pushing ahead with a 25 percent tariff on $50 billion worth of Chinese products, prompting Beijing to respond in kind.

Some of those tariffs will be applied from July 6, while the White House is expected to announce restrictions on investments by Chinese companies in the United States by June 30.

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong,” Trump said.

Trump said if China increases its tariffs again in response to the latest US move, “we will meet that action by pursuing additional tariffs on another $200 billion of goods.”

Trump said he has “an excellent relationship” with Chinese President Xi Jinping and they “will continue working together on many issues.”

But, he said, “the United States will no longer be taken advantage of on trade by China and other countries in the world.”

Cooling Chinese Economy

The intensifying trade row threatens to put more pressure on the already cooling Chinese economy, risking an end to a rare spell of synchronized global expansion and collateral damage for its export-reliant Asian neighbours.

China’s central bank unexpectedly injected 200 billion yuan ($31 billion) in medium-term funds into the banking system on Tuesday in a move analysts said reflected concerns about liquidity but also the potential economic drag from a full-blown trade war.

China imported $129.89 billion of US goods last year, while the US purchased $505.47 billion of Chinese products, according to US data.

Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said that means China will soon run out of imports of US goods on which to impose retaliatory tariffs.

China was unlikely change its industrial policies in response to the US trade threats, he said. That could take a long and painful trade fight.

“As I’ve said from the beginning, China will back off its industrial plans only when US trade measures are large and lasting enough to threaten the influx of foreign exchange. Not due to announcements,” he said. – Reuters

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The 10 countries that make the most money from taxes

Paying taxes is something no one enjoys doing, but the amount individuals and companies pay varies enormously throughout the world. The Organisation for Economic Co-operation and Development (OECD) has calculated how much tax was paid in 2016 by 10 countries. Here’s what it discovered. How does your country measure up?

Australia: $348 Billion

The latest figures available show Australia raised $348 billion from its 24.13 million-strong population. Individuals pay income tax on a progressive basis from 19% to 45%. A Medicare Levy is payable on top to pay for public healthcare; this was increased from 1.5% to 2% in 2014, while since 2015 higher earners who don’t have private hospital cover must also pay the Medicare Levy Surcharge of between 1% and 1.5% on top. Corporate taxes stand at 30%, however the government is pushing for this to be cut to 25% by 2025.

Japan: $351.6 Billion

Japan received $351.6 billion from its population of 127 million, according to the most recent figures. In 2017 the country’s ruling bloc approved a plan to cut the corporate tax rate from 30% to 20%, although only for companies that raise wages and increase capital spending. Japan has a progressive income tax system, with rates from 20% to 40%.

South Korea: $371.1 Billion

South Korea, which received $371.1 billion from its 51 million population, is undergoing huge changes this year as the country enacts a 2018 tax reform bill. Some of the changes include adding a new 25% corporate income tax bracket for taxable income in excess of $270 million, instead of the previous flat rate of 22%. Meanwhile the top income tax bracket has been increased from 40% to 42% for higher earners.

Spain: $412.4 Billion

With a population of 46.6 million, Spain generated tax receipts of $412.4 billion in 2016 according to the report. The country operates a sliding scale of income tax from 19% to 45%, while the general corporation tax rate is 25%. Meanwhile, residents of the Andalucia region had some good news this year, as it was announced changes to inheritance tax rules mean that the vast majority of children or spouses will not have to pay it anymore.

Canada: $491.1 Billion

The system of paying federal tax is simple in Canada: there is a sliding scale of 15% to 33% depending on how much you earn, however it gets a bit trickier when you need to add on provincial and territorial tax as the rate you pay depends on your income – and where you live. The rates vary dramatically from 4%, the lowest bracket in Nunavut, up to the highest bracket in Nova Scotia of 21%. The country’s population of 36.3 million brought in a total of $491.1 billion in 2016.

Italy: $792.8 Billion

Italy’s 60.6 million-strong population helped contribute to vast tax revenues of $792.8 billion. Italians pay personal income tax of between 23% to 43%, plus regional tax which is typically between 1.23% and 3.33%

United Kingdom: $869.4 Billion

The UK generated $869.4 billion in tax from its population of 65.6 million people, according to the OECD report. The UK uses a progressive income tax system, where those living in England, Wales and Northern Ireland pay between 20% and 45% tax, while those in Scotland pay 19% to 46% tax depending in their earnings. Residents must also pay National Insurance contributions too, which are 12%, although workers who earn more than $62,380 pay only 2% on earnings over that threshold. The Corporation Tax main rate is 19% but is set to be reduced to 17% in 2020.

France: $1,115.9 Billion

With a population of 66.9 million, France generated $1,115.9 billion in tax. However it will be interesting to see the results of dramatic tax cuts President Emmanuel Macron made in 2017, including slashing the contentious wealth tax effectively by 70% and introducing a 30% flat rate on capital gains.

Germany: $1,305.7 Billion

A combination of being the biggest economy in Europe, a population of 82 million and a relatively high taxation system means Germany has the second-largest tax revenue in the report at $1,305.7 billion. In addition to income tax, which varies from 14% to 45% for very high incomes, everyone has to pay solidarity tax, which is capped at 5.5% of an individual’s income tax. Also, if you’re a member of a church registered in Germany, you will also be required to pay a church tax of 8% or 9% of your income, depending on which federal state you live in.

United States: $4,846.3 Billion

The US tops the list in the report for having the highest level of tax revenues, with $4,846.3 billion tax generated from its population of 325.7 million. However with the US going through huge tax reforms this year under President Trump, it will be interesting to see the impact that has on those figures in future. Most analyses suggests that while the changes aren’t the biggest tax cuts the country has ever seen, the reduction of the corporate tax rate from 35% to 21% is the biggest corporate tax cut in US history.