The basic rule for foreign companies hiring an employee in China is that you cannot do so unless and until you have a Chinese legal entity (e.g., a WFOE), and violating this rule can (and nearly always does) cause problems. See Doing Business in China with Deportation or Worse Hanging Over Your Head. What though
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
You should have a China-centric contract when doing business in China or even with China. See China Contracts: Make Them Enforceable Or Don’t Bother. This holds doubly true for employment contracts with China employees because those agreements are highly local. And though I should not have to say this, translating your existing employment agreements into
According to the Hong Kong Free Press (and a number of other newspapers) The Shanghai government this week “ordered the closure of one of the city’s top maternity hospitals saying it was illegally built on land owned by the armed forces, according to an official notice.” According to the article, the hospital, Shanghai International Women’s
China does not like direct marketing and its direct marketing laws are so restrictive the direct marketing industry has little in common with direct marketing in the United States or even Europe. The other day, one of my law firm’s international corporate lawyers received an email from a potential client with a link to a
Because labor remuneration is an often-litigated issue in China, employers should be careful when reducing employee salaries and they should take that action only when prepared to defend it before an arbitrator or a judge. As with China-based employee terminations, the best way to proceed and avoid employment disputes will usually via a mutual agreement
Our China lawyers have written countless articles on China joint ventures (for this blog, for the Wall Street Journal, for Above the Law, and for many others), so it is good when someone we know and respect says the same basic thing about them, which is that you should watch out. The writer is my friend Randall
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
China has become adept at spotting and hunting down foreign companies doing business in China without a required Chinese entity. What exactly constitutes doing business in China at a level requiring a Chinese corporate entity ? That is far too complicated to answer in a blog post, but suffice it to say that the Chinese
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”),
