Time limit on capital contribution to foreign investment enterprises (companies)

In China, a company (in this article we take the limited liability company, the LLC, for illustration), either domestic or foreign-invested, has to have its own registered capital in order to be recognized as a legal entity at law. As to the timing of capital injection, Chinese laws have treated domestic firms and foreign invested firms differently. To set …

The Political Divisions in China

An investment in China is often subject to regulation of more than one level of the governments. However, it is very often confusing to a foreigner to understand the political divisions through reading some scattered information in that regard. I will try to make my introduction accurate and comprehensive to help you understand this issue.

Bear in mind before…

The basic steps for setting up a foreign invested enterprise in China

1. the Catalogue of Industries for Guiding Foreign Investment in China

China has put in place for long a Catalogue of Industries for Guiding Foreign Investment in China (the “Catalogue”) which may from time to time be amended to reflect economic changes in reality. In this Catalogue, industries are basically classified into four types: encouraged,…

taxation measure to curb real estate market

Though there is plenty of moaning and groaning in the real estate market in China, due to the central government’s tight monetary policy, it seems the tether is going to be further tightened. In a new effort stepped up by the central tax ministry, a new circular was issued on April 7, 2008 regarding the prepayment of income tax by property developers.

The…

Shifts in real estate taxation affecting your investment

Recently this year saw a string of shifts in tax policies that affect businesses in China, in particular, foreign invested enterprises.

â…  City and Township Land Use Tax

At the end of the year of 2006, the state cabinet revised the Interim Regulation of the People’s Republic of China on the City and Township Land Use Tax and the revised version came…

Representative Office’s Taxation Issues in China

Representative Office’s Taxation Issues in China

Written by Yang, Shujuan

The most direct way to indulge into the China market is to set up local presence. Various forms of foreign investment vehicles are available for different business objectives and operations, including, among other things, equity joint ventures, cooperative joint ventures…

Pre-registration system in Chinese property law

1. Provision in the law

On October 1, 2007, the Property Law of China comes into effect, a landmark event in China’s legislation history and in the cause of establishing rule of law in China.

Among those shining points in this new law, I single out and introduce the pre-registration system for your reference.

Article 20 of the Property Law provides:

“the…

Lease contract registration

Recently one of our clients complained to us that the real estate exchange center (an authority in charge of real estate registration, “Exchange Centre”) refused to accept their lender-approved lease contract designed for their service apartment project simply because their lease had not adopted the Shanghai model lease contract form. Without…

Land Regulation Framework in China

1. types of land
According to the Land Law of the People’s Republic of China, effective as from January 1, 1999 (the “1999 Land Law”), land in China is basically categorized into three kinds, namely, agricultural land, construction land and unutilized land. The agriculture land refers to those directly used for agricultural production,…

Individual income tax reduction raised in China

On December 29, 2007, the China’s parliament, the standing committee of the National People’s Congress, has just enacted an amendment to the Individual Income Tax Law, raising the threshold of the amount of taxable income from RMB 1,600 to RMB 2,000, a move aimed to alleviate the embarrassment of the pockets of the low income earners against…

Hierarchy of Chinese legislation

Very often in a contract or a legal opinion, it is critical to distinguish what kind of laws and regulations are applicable or concerned. Most countries have more than one legislature bodies and legislation at different levels is given different legal force. China has enacted its legislation law in the year of 2000, namely, the Law of Legislation of China (“Legislation…

Heavy maze over house prices

News in the media has been divided in guesstimating where the house prices are going. Very often, good news and bad news appear on the same webpage, leaving readers in sway.

Confusion is thick especially in the residential property markets with transaction volume being reported to go down sharply in May which used to be a “red month” meaning golden…

Entities you can set up under China Company Law

Though in a foreign investment context, we often use the foreign invested enterprise to refer to the entities foreign investors may set up in China, nowadays most entities established by foreign investors are companies under the company law of China rather than an enterprise. In the Chinese legal jargon, a company is for sure regarded as an enterprise but an…

Enterprise Bankruptcy Law of the People’s Republic of China

Enterprise Bankruptcy Law of the People’s Republic of China

  (Adopted at the 23rd Meeting of the Standing Committee of the Tenth National People’s Congress on August 27, 2006)

  

Chapter I  General Provisions

  Article 1 This Law is enacted with a view to regulating…

Deed tax exemption clarified

The China State Administration of Taxation issued on May 26, 2008 the Circular on Deed Policy relating to Assignment of Assets to Wholly Owned Subsidiary from Parent Company, clarifying a situation where deed tax is exempted.

The circular is to the effect that, where a company increases the registered capital of its wholly owned subsidiary through contributing…

Corporate governance structure of foreign invested companies

Chinese foreign investment regulation originated earlier than the enactment of the first Company Law of China (1994) and this together with other reasons gave rise to the irregular corporate governance structure of foreign invested enterprises (which term generally excludes foreign invested companies limited by shares) where there was generally no …

Supreme court seeking comments to judicial interpretation draft relating to condominium ownership

On June 16, 2008, the People’s Supreme Court of China published the Interpretation on Several Issues regarding Application of Law in Trial of Cases Involving Condominium Ownership (the “Condo Interpretation”) and asked for public comments thereof. The original Chinese text of the draft Condo Interpretation is on the following website:…