The China Law Blog focuses on the practical aspects of Chinese law and how it impacts foreign companies that do business in or with China. The goal is to help readers understand what works and what does not work and what businesspeople can do to use the law to their advantage. China Law Blog's aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.
Companies often use share incentive programs to motivate their employees. It is possible for a PRC employee of a foreign company’s Chinese subsidiary to participate in the foreign company’s employee share incentive plan (“SIP”). However, due to China's currency controls, whether such an employee can actually “cash out” on the benefits of such a program
The PRC National People’s Congress last week promulgated a second discussion draft of the PRC E-Commerce Law (电子商务法草案). This statute is an attempt to gain greater control over China's online consumer markets, which have exploded with little regulation. The lack of regulation has not slowed development of e-commerce in China. The success of online marketing
Your company is a service provider. Let's say your business assists domestic and foreign entities register drugs with the FDA. You are contacted by a Chinese entity to do a registration. You submit a written, signed invoice to the Chinese entity and you require payment in advance. Within five days, you receive payment. But you
One common mistake U.S. companies make is failing to understand that patents and trademarks are territorial.* That is, these forms of intellectual property provide protection only in the country in which they were registered. If a U.S. company has not registered its patents and trademarks in China, a Chinese company is free to make use
China permits only the following three categories of “dispatched” employees to be hired by a labor dispatch agency: Temporary employees with a term of no longer than 6 months. Auxiliary employees who provide supporting services that are not central to the employer’s core business. Substitute employees who perform tasks in replacement of permanent employees during
By popular demand we are reprising our “Ten Things To Consider” series, starting anew with forming a China WFOE. Here goes. Make Sure Your Business Scope is Legal. Too many WFOEs never get past the starting line. A number of industries are restricted to foreign-invested companies, so before you sign a lease in Shanghai or
On March 10, 2016, the PRC government will impose new rules to govern online publishing in China. Under these new rules, all entities that intend to publish online in China must first obtain an Online Publishing Service Permit from SAPPRFT. The OPS Rules set out the conditions for obtaining the required permit. The Chinese government strictly
Hiring interns in China (like pretty much everything involving China employment laws) is complicated and local. And when I am tasked with figuring out how one of our clients may legally do that, I almost always have to review applicable national, provincial and local laws and regulations and engage in followup conversations with the relevant
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
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
