Chinese Lawyer in Shanghai

A Blog about Chinese Civil and Business Laws Devoted for Foreign Investors and Expats in China

Overview of overseas business of Chinese companies China’s role in the global economy has rapidly changed. As Chinese FDI outflows are rapidly closing the gap with inflows, the country is expected to be the most important net investor in the world in the coming two years (Unctad, 2014). The increasing importance of state-owned enterprises (国有企业,国营企业) in China has accounted for the majority of outward direct investments worldwide, resulting in a  [ Read More ]

Apparently, many are considering cashing in on their property holdings in China. Yes, it may be the right decision to make. The trend leader is the Hong Kong Tycoon Li Ka-shing who has unloaded its Chinese property assets over the recent years. Here is a report from WSJ “In Chinese Property, Smart Players Are Selling“. He is not alone.  Many small property owners are also ready to sell. I have  [ Read More ]

I. Basic Facts and Legal Concepts in the Ongoing Case Shanghai Jahwa Corporation, a listed public company in China, was not happy with its general manager in an internal corporate struggle, so Jahwa’s board of directors made a decision in May of 2014 to fire the general manager citing the manager’s personal responsibility for loopholes in Jahwa’s internal control polities revealed by an auditing firm. Behind the scene is the  [ Read More ]

The world is now sourcing various products in and from China. You may be one of them. Wherever you do business with China (I mean, Chinese businessmen), you need to sign a contract with your Chinese counterparts. Unfortunately, as a new market economy where most businesses esp the small ones don’t really know much about market, Chinese businesses don’t take contracts serious and may often dishonor their promises clearly written in  [ Read More ]

Many may be aware of the row between CIETAC Shanghai (now Shanghai International Arbitration Center) and CIETAC headquarter in Beijing. For long, CIETAC Shanghai is operating as a branch office, and under the instructions of CIETAC headquartered in Beijing. But disputes erupted in 2012 when CIETAC revised its arbitration rules with CIETAC Shanghai claiming independence from CIETAC, a break-away that put many people in puzzle as to which arbitration commission  [ Read More ]

International law firms and lawyers are thriving in China for long. Foreign investors generally come into China hand in hand with a foreign law firm. International law firms are appealing to foreign investors in China for various reasons: feeling more bonded with each other due to language skills and culture, having global connections and resources to serve clients and the like. Even though foreign law firms and lawyers are not allowed  [ Read More ]

Here is the story: A foreign investor wishes to buy a Chinese local brand in respect of certain products falling within Class A, and at the time of executing the trademark transfer agreement, the seller doesn’t disclose that he has a very similar trademark in Class B products which are similar products with those in Class A. After partial payment of the sale price, the buyer tries to effect the  [ Read More ]

To many, it may seem a simple and even stupid question. But it is not. I   In the Case of Domestic Company In a country with the tradition of statute laws, when a statute law fails to offer a clear answer to a certain legal issue, it can be a problem in practice. With respect to the captioned question, China Company Law does not provide clearly for when a  [ Read More ]

Low Inflation Rate According to the National Bureau of Statistics, China’s inflation rate slides to 5-year lowest in September. Meanwhile, the producer price index, a measure of inflation at the factory gate, fell 1.8 percent last month, after slipping 1.2 percent in August. In this month, the consumer price index increased only 1.6% year-on-year, which is the smallest growth from January 2010 and 2% decrease from August. The destocking amid  [ Read More ]

It happens not only in China. There seem to be property scam all over the world, click here and here. A recent case intrigues me a lot. Facts: an old Shanghai lady who become an American citizen back in 1990s left her apartment in down town area of Shanghai to her niece for use and care. Recently when she came back to Shanghai, she found that her apartment was now  [ Read More ]

I have been serving as external legal counsel for SlamBall China for a couple of years. With its rapid growth and expansion, it has attracted more and more media attention. In this November, it will hold a SlamBall tournament in Wuhan and Beijing, a big event for SlamBall China and for the sport itself. Here comes an internet company with interest to broadcast the event live on its website. Thus,  [ Read More ]

This is actually a summary written to one of my clients who is selling his house in the French Concession Area in Shanghai. One of his prospective buyers raised a good question regarding the land use right after reviewing the title deed of the house. Unlike other new apartments, my client’s title deed of his house does not specify a 70 year period of land use right, which puzzled the  [ Read More ]

Leasing is a commonplace type of real estate deals in the market. There are many kinds of leases, apartment lease, factory lease and office lease etc.  Serviced offices are regarded as a type of lease with special features. Landlords always have the same headaches of tenants terminating the lease prematurely. For serviced office providers, this headache is the biggest one. A typical scenario is where the tenant delays in paying the  [ Read More ]

In business world, security is critical. For creditors like traditional banking lenders or industrial companies that are occasionally involved in lending, borrowing or other obligations, a security interest in the form of collateral, guarantee, standby letter of credit is always craved if ever available. A security interest in this post refers to any  collateral-backed mortgage, pledge, lien or personal guarantee, surety etc. However, there are rules companies shall have to  [ Read More ]

You may say it is crazy to buy Chinese properties esp those first-tiered cities like Shanghai, Beijing, where the expectation of price drop just seems to take hold.  Probably people should wait for some time before the market gets clear where it will be going. Not everybody has that patience. According to a Wall Street Journal article “China buzzards look for property deals“, both foreign and domestic property investors are  [ Read More ]

With China adopting the full authorized capitalization regime in its Company Law (click here for more about China reform on company’s registered capital), there has been a clear trend in the market that companies present a much bigger amount of the registered capital to the public (now through the corporate information registration and publishing system). Under the new rules, the amount of registered capital is left for the decision of shareholders,  [ Read More ]

I have been helping a client dealing constantly with lease disputes. I found that due to lack of basic legal knowledge, tenants can find themselves in very unfavorable position. A typical scenario is like this: in the course of leasing, the tenant decides to cancel the lease and therefor refuses to pay rent and finally may move out of the leased office or residence. But for some reason, the tenant  [ Read More ]

Prohibited and limited sectors in China for foreigners The 12th Five-Year Chinese Plan covering the years 2011-2015 aims to further forge relationships with foreign companies. Although its plan is promising for the development of China, foreigners keep in mind that many economic sectors are prohibited or restricted from entering. Regularly, the Chinese government publishes a list of the prohibited and limited sectors.  This list can be found in the Catalogue for  [ Read More ]

The State Council passed a comprehensive plan to set up a free trade experiment zone in Shanghai on August 26, 2013 [see our analysis of the New Rules for Commercial Factoring in Shanghai Free Trade Zone] . Few months later, how to evaluate the real impact of Shanghai pilot FTZ in China ? The Shanghai FTZ is made up of three extant bonded areas – Yangshan, Waigaoqiao including a logistics park  [ Read More ]

This is a true story.  The question here may well boggle minds of fellow professionals in China. I. Facts of the Case A foreign investor has set up a wholly foreign owned enterprise (“WFOE“) in Shanghai, a limited liability company. The WFOE has a board of directors with three members, and one supervisor. One of the board member, a foreigner, was appointed as general manager who concurrently served as legal  [ Read More ]