Resources Global Professional, the US accounting and consulting firm that bills itself as “an alternative to the Big Four”, is to open an office in Beijing in December to fill increasing demand for professional services in China.
The company is also considering acquiring a small local firm and aims to have five offices in China in two to three years to serve what it predicts will be a growing number of “multinational companies” originating on the mainland.
“We have been focusing on serving the MNCs in China. We now want to build the infrastructure to focus on the next wave of great MNCs, which I think will be Chinese companies,” says Donald Murray, chairman and chief executive.
The Chinese accounting market has been expanding rapidly as more mainland companies try to raise funds overseas, compelling them to hire foreign auditing firms to look at their books.
Demand from multinational companies for professional services on the mainland is also growing as the increasingly sophisticated Chinese market forces them to seek assistance in areas such as tax and compliance.
Competition, however, is also keen. The big four accounting firms – Deloitte, Ernst & Young, KPMG and PwC – have been operating in China for years, and the country itself also boasts many local accounting and consulting companies.
But Mr Murray is confident that China offers great potential. More companies now need consultants who go beyond “borrowing your watch to tell you the time”, he says. “We are like a virtual fix-it arm. We won’t send somebody who needs to be trained. We will send somebody with 19 years’ experience.”
Nasdaq-listed RGP, which was founded by a group of accountants at Deloitte including Mr Murray in 1996, has until now been serving the mainland market from its Hong Kong and Taipei offices as well as through an affiliation in Shenzhen.
Apart from the planned office in Beijing, Mr Murray says the company has about $140m in cash to invest globally and is considering whether to acquire its Chinese partner, which also has an office in Shanghai, or other small mainland firms to expand its operation in China. “If we find the right firm, we will have a jump start. If we don’t, we would do it ourselves,” he says.
Either way, Mr Murray aims to have five offices in China by 2008 and expects revenues in the mainland to be as big as in the US in 10 years. The US currently accounts for about three-quarters of RGP’s revenue, which totalled $538m for the fiscal year to May 31 2005.
But RGP must still deal with what most accounting firms in China say is their biggest headache – finding the right local talent.
Mr Murray hopes to hire Big Four veterans to fill his Beijing office, which is expected to have 50 staff in four years. For now, he plans to transfer Chinese associates currently workingin the US. “One nice thing is China has a lot of intellectual talent who feel good about going back to their country to help,” he says
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