Foreign Investment in China

Inheritance of Corporate Shares in a China Company (III)

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This is the third post regarding inheritance of corporate shares in a China company. Again it is about a special situation that may become more and more in reality with more and more Chinese riches migrating to foreign countries.

I. Facts of the Case

In 2002, a Chinese husband set up a trading company with a third party, and business went well. In 2006, the…

Inheritance of Corporate Shares in a China company (I)

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Readers may notice that most posts I wrote about inheritance of estates in China is related to inheritance of real properties in China. Indeed, there are more inquiries about inheritance of real estate than those about corporate shares or corporate equity interests from visitors.

With more and more people now holding corporate shares, the demand from…

Happy New Year to you all!

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Welcome to the new year of 2018. Wish you all have a prosperous and healthy year ahead.

I hope you have been enjoying and you are enjoying the posts on this blog.  I have tried my best to keep this blog informative and helpful to visitors that stumbled hereon.

In the new year of 2018, as always i will try to write about Chinese laws in respect of civil and commercial …

Company to Transfer Property Title in China and Tax Implications

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Recently a corporate client from Canada hired us for legal advice in its attempt to transfer a piece of residential property owned by its China subsidiary entity to one of its employee under an incentive plan that has been executed some 15 years ago.

The China subsidiary bought the properties 15 years ago in Beijing and at the same time, entered into a gift contract…

Loans made between enterprises in China still invalid?

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For many years, loaning activities were tightly controlled and regulated, only duly licensed banks are allowed to lend money to the public, and loans made between domestic enterprises are often held as invalid, and consequently, the borrowed shall return the loan principal to the lender and interests are seized by the state. With this rule in place, borrowings…

Share Repurchase under China Company Laws – Commentary on China Supreme Court Ruling

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[For a PDF version of this post, please click here.]

Sparked by court cases in private equity investment world recent years, share repurchase by the company (whose shares are being repurchased) has been a hot topic in the legal arena. Foreign investors in China may well be involved in such a share repurchase arrangements, and it is of interest to foreign investors…

Can Company’s Creditors Go After Shareholders Who Have Not Paid up Subscribed Capital?

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This is not a new topic on this blog. However, it prompted me to look further into the issue when I realized that in judicial practice, courts are actually very much divided on this issue.

Following the company registered capital reforms initiated back at the end of 2013, the market has witnessed many newly setup companies that have a huge amount of registered …

Watch out your manager for your China business

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Just recently a client of mine, a foreign company that has a subsidiary business presence in China, approached me for a service to investigate some suspicious dealings that were made by one of his senior manager in Shanghai subsidiary.

The foreign parent company apparently discerned something fishy from a decline in profits of the subsidiary company and commenced…

China Divorce: divide corporate equities indirectly held by one spouse

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A client asked an interesting question regarding her attempt to divide her husband’s equity interests in a China limited liability company. Here is the story: the Chinese lady client got married with a foreigner husband ten years ago and now they are in the process of divorcing. The husband has invested indirectly through a BVI company, in a foreign-invested…

Fire the General Manager of a China Company

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A foreign client approached me for advice to fire the general manager of its WFOE subsidiary in Shanghai.

Indeed,  firing a general manager can be a real headache in China.

Following the high-profile case in Shanghai, in which a fired general manager of a listed company wrestled with his employer and won (not really in a strict sense) the fight by having the …

Rights for minority shareholders under China Company Law

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Being a minority shareholder in a China limited liability company can be a nightmare for investors, foreign or domestic. You get stuck there with no hope and find yourself no easy exit. I have witnessed many such sad stories happening to foreign clients who participated in Sino-foreign equity joint ventures.

So it will be meaningful for investors to know what…

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