When making a WFOE (Wholly Foreign Owned Enterprise) or JV (Joint Venture) investment in China, an investor must consider who or what will be the shareholder(s) in the PRC entity. Will the investor invest directly, or will they create a special purpose subsidiary company (an SPV or Special Purpose Vehicle/a/k/a SPE or Special Purpose Entity)
A China-centric written contract is an effective tool for doing business in or with China. A first step in creating this effective tool is to carefully follow the rules for execution. Chinese courts are bureaucratic and formalistic. Make use of that tendency so you can prevail. Don’t blunt the edge of your instrument with sloppy
Our China employment lawyers constantly hear misinformation about China employment contracts and double wage claims. In this post, I will try to set the record straight. China’s employment laws require full-time employees be employed pursuant to a written employment contract. But what happens with employees without a written employment contract? As with pretty much everything
The China lawyers at my law firm are big fans in using China distributors to market and sell products in China. Our thinking on this goes as follows: 1. We have seen too many Western companies spend too much time and money trying to sell their products into China. 2. We have seen too many
Contracting in China: The Old and the New It used to be common for OEM manufacturing in China to be done on a purchase order basis, with no underlying contract. Much service work done by foreigners for Chinese clients was based on an exchange of emails. Today, however, to be able to bring a plausible
As we pointed out in SaaS in China: Build a compliant Go-to-Market Plan by Looking Beyond the Regulations and again in Foreign SaaS in China: Get Off of My Cloud, the PRC does not permit foreign entities to make direct sales of SaaS products from servers located within China. For foreign software companies, this is a major
Under Chinese law a foreigner who comes to China to complete a “short-term work task” and stays no more than 90 days, must get a work visa (a Z visa). A “short-term work task” is defined as one of the following: Tasks such as those involving technology, scientific research, management and guidance at the place
China Contract Formalities Contracts with Chinese companies often generate a unique set of legal and procedural intricacies. China’s legal landscape differs significantly from that of American, European, or Australian jurisdictions, primarily due to its distinct regulatory frameworks and business culture. These differences require a China-centric approach to both the drafting of China contracts and to
January 19, 2015 marks the date of the death of the VIE investment structure in China. On this day, China’s State Council issued a discussion draft of legislation setting out the plan for overhauling China’s Chinese foreign investment legal regime. The new system is set out in the PRC Investment Law Discussion Draft (the “Draft”),
Media reports state that online gambling in China soared during the recent World Cup. The punters put their money into online gambling on the World Cup, with revenue at China’s government run lottery site increasing by over 80% during this period. The general ban on gambling in China is subject to one exception. The Chinese
