Every few months our China lawyers get a call from someone wanting to shut down their China WFOE (Wholly Owned Foreign Entity). These calls usually come from companies that have been in China for a long time (average time, maybe ten years). Their reasons for seeking to leave China are all over the map, but
I am constantly fighting against the claim that Chinese laws are gray. China’s business laws are generally as well written and clear as any other country’s. My contention has always been that those who claim China’s laws are grey are usually just saying that to excuse their own failure to abide by them. The laws
The big story in the China business/legal community this week is the back and forth between Muddy Waters and Sino-Forest (see here).I will reserve my comments on the specific situation until things develop further, but I will add my two-cents about something called a “Reverse Merger” or “RTO,” the corporate structure at the center of
Fascinating article by Matthew Robertson, Fellowes, American Stationary Giant, Brought to Its Knees in China. A couple of readers sent me the article and both commented on how it proves what “you are always saying about Chinese joint ventures.” I am not so sure it does. The article is about Fellowes, one of the leading
One of the things I love about blogging is how I get my stories. This one came to me via an international lawyer in Portugal who sent me a link on Buddha Steel (more on that later) from the China Accounting Blog. First, I am going to briefly discuss Variable Interest Entities (VIE) and how
The 19th Session of the 11th National People’s Congress last week revised the criminal code to make it a crime for a company to intentionally withhold employee wages. A company that does this is subject to criminal fines and the responsible individuals are subject to imprisonment for up to seven years. This is a significant
It sometimes seems all of our clients from China possess both a China and a United States passport. That’s an exaggeration, of course, but an increasing number of Chinese businesspeople appear eager for dual citizenship, especially as China makes it more difficult to leave. Though many in China covet a second passport, they often underestimate
China is dangerous for foreigners whose companies might owe money to a person or company in China. A few weeks ago, a reader e-mailed one of my law firm’s international lawyers with an article regarding China’s recent jailing of California businessperson Brian Horowitz over a debt allegedly owed to a Chinese company. According to yesterday’s
Excellent China Law Insight post on resale price maintenance in China, entitled, Rules Governing Resale Price Maintenance in China. Before you just run away, believing an antitrust concept cannot be relevant to your business in China, let me tell you that you may well be wrong. If you are selling your product in China through
Understanding Letters of Credit Letters of credit are complex financial tools that can be dangerous if not understood properly. This post will explain what letters of credit are, delve into specifics on potential complications, and provide advice to avoid risks when using them for international transactions. A Cautionary Letter of Credit Tale I got a
