1. China’s New Foreign Investment Law Under U.S. pressure, China recently adopted a new Foreign Investment Law 中华人民共和国外商投资法 (“FIL”) that had been under discussion for several years. Many believe this law will lead to foreign invested enterprises being treated the same as domestic Chinese private businesses. Unfortunately (and not surprisingly), the existing system that limits
1. Who Should Own Your China Subsidiary? One of the first tasks in forming a subsidiary company in China (often referred to as a WFOE or Wholly Foreign Owned Entity) is to determine what entity will be the shareholder of the subsidiary company. It is possible for an individual or individuals to own a China
1. Chinese Investment in U.S. Businesses is Down 95% Mergermarket, just published its global M&A report for 2018, revealing that investments from China in U.S. businesses fell by 95% as compared to 2016. A summary of the data in the Report shows the following: 1. Worldwide M&A activity was strong in 2018. “The transactions that
My law firm’s China company formation lawyers are often asked about the steps it takes to form a China WFOE. So often, in fact, that we long along drafted a stock response to that question. Figuring this response would be helpful to our faithful readers, I am running it below. Please note that the below
China Law Professor Donald Clarke sent me a great article this week from New York Magazine, entitled, How China Drove Out Mister Softee. Professor Clarke’s email with the link said the following: Thought you might like this. Interestingly, it is NOT a story of “guy skirts rules, naively trusts Chinese partner, gets screwed.” It’s “guy does
If I were to list the ten biggest/most common mistakes my law firm’s China lawyers see, not forming a China subsidiary when necessary and forming a China subsidiary when not unnecessary would both be on that list. We write constantly about the risks of doing business in China without a subisidiary. See Doing Business in
We hear so many half-truths and misconceptions about registered capital that it’s hard to keep track of them all, let alone dispel them. Not for lack of trying, though: see e.g. China Company Law Myths: Registered Capital and Personal Liability and China WFOE Minimum Capital Requirements: The Goldilocks Rule. Without further ado, following please find
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
