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
China employers must have written labor contracts with each of their full-time employees. Not having a written labor contract exposes employers to penalties, administrative fines, and the risk of being deemed to have entered an open-term labor contract with the employees lacking the contract. Most companies now understand this, but many do not realize that
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
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
Many years ago, Dan Harris of my law firm wrote a Forbes Magazine article (China’s Hourly Work Week: Think Locally) on how China’s employment laws had become so localized. Dan started that article with the following explanation: I have avoided writing on China employment law because it is so complicated and so localized. My fear
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
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
