Chinese Lawyer in Shanghai


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

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 ]

[You may wish to download a PDF version of this post, click New Rules for Commercial Factoring in Shanghai Free Trade Zone_140604.] New and detailed rules regarding special treatments for certain industries in China (Shanghai) Pilot Free Trade Zone (the “Shanghai FTZ“) have erupted recently covering quite a number of sectors that may otherwise not be accessible by foreign investors, among which is commercial factoring. According to the website of  [ Read More ]

[You can also download the PDF version for review here Derivative Action_140516] Derivative actions are regarded worldwide as an effective enhancement of corporate governance in terms of protecting shareholders from the misbehaving management of their invested company, and protecting small shareholder from being repressed by controlling shareholders. China adopts this mechanism when overhauling its Company Law in 2006. Article of 151 of China Company Law (revised just recently for reforming registered  [ Read More ]

This is a true case that I am handling. FACTS: A European investor set up a wholly foreign-owned trading company in Shanghai, China as its foothold in China to sell its advanced products. The shareholder appointed three members on the board of directors who are all foreigners with no regular residence in China. One of the director was appointed to serve as the general manager of the WFOE company and  [ Read More ]

I am still working on behalf of a European corporate client to clean up the mess of its invested WFOE in Shanghai caused by the WFOE’s general manager and legal representative. The WFOE has a board of directors and a supervisor as well. The management of the WFOE is left to a general manager who also serves as the legal representative of the WFOE. It seemed that the board fully  [ Read More ]

As part of the China’s big promise of overall reforms, state cabinet announced “Plan on Reforming Registration System of Registered Capital (of Companies)” on February 14, 2014. It is a significant move to inject vitality into Chinese ailing economy, as it lowers the threshold substantially for more ordinary people to embark on building their own business. As these reforms will also apply to foreign investments in China, it is important for  [ Read More ]

My clients, two foreigners, operate a successful restaurant in Shanghai for a few years. They invest in the business but the restaurant was registered in two Chinese persons’ names in order to save time for starting the business. Of course, there is a contract between the two foreigners and the Chinese nominee shareholders. Recently, the two clients are tired of running the catering business, too tiresome, so they decide to  [ Read More ]

As a relatively young country with the concept of rule of law, China has a long way to go before building itself into a ripe rule of law state. In the fundamental field of property laws, there are too many controversies over many legal issues that may well vex a smart mind. A young colleague in our firm discussed his case with me. It is an interesting situation: a piece  [ Read More ]