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
With China ceaselessly increasing its tax crackdown on foreign companies operating improperly in China without a China entity (WFOE, Joint Venture or Rep Office), forming a China entity and starting a business in China is very much in vogue right now. Starting a business in China usually involves forming a Wholly Foreign Owned Entity or WFOE. Forming
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
The Wall Street Journal just published an article on the threat the proposed PRC foreign investment law poses for companies that used the VIE structure to enter into prohibited business sectors in China. Among the companies in the cross hairs are a number of major foreign businesses such as Amazon, Pearson and CBS. Add to
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
Under China’s employment laws, terminating a China employee who has completed his or her probation period is virtually never easy. Termination usually requires good cause and a severance payment. Most importantly a China employer must be able to show that any unilateral termination was based on statutory grounds. In this post, I lay out some basic
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
Many of our clients that went to China years ago to have their products made there are now interested in selling those same products within China. One way to do that is to form a WFOE for selling the products, but oftentimes the cost and the hassle of doing that is not worth it, especially
