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 the procedure for enterprise bankruptcy, fairly settling…

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:

Chinese Lawyers practicing in Foreign Law Firm Representative Office


Laws and Regulations

At present, the major regulations governing Chinese practicing lawyers’ practice in Foreign Law Firm Representative Office (“R.O.”). are as follows:
• Regulations on the Administration of Foreign Law Firms’ Representative Offices in China (“Regulations”)
• Provisions of the Ministry of Justice on the Execution…

changes to be approved before amending registration


Since many documents especially the articles of association involved in setting up a foreign invested company have to be approved by foreign investment department (“Approving Authority”) beforehand prior to registering the company with the company registration agent, the State Administration of Industry and Commerce and its local counterparts…

Baby shareholder established by a decided case


A court in Minhang District in Shanghai delivered a judgment that aroused interests among the public, in which the court held the two babies, one of 5 years old and the other of 6 years old, were entitled to be registered as shareholders of a company. While the copy of the judgment is not available, the information from the Internet suggested that the company is …

Central government stepped up measures to boost property market


Yesterday, China state cabinet issued the Several Opinions on Boosting Healthy Development of the Property Market (the “Opinions”), in a bid to boost the bearish property market which had been the engine industry for the Chinese economy.

The key point in the Opinions that grabs common homeowners’ attention is the change in policy regarding the time…

Guidelines for pursuing foreign investors’ liabilities in the case of abnormal capital withdrawal


On November 19, 2008, four Chinese ministries, namely, Ministry of Commerce, Ministry of Foreign Affairs and Ministry of Justice jointly issued a circular, Guidelines for Cross-border Pursuit and Litigation by Chinese Parties in respect of Abnormal Capital Withdrawal by Foreign Investors (“Guidelines”), an attempt to curb deviant withdrawal of…

SDRC new circular aiming to rein in fake investment


On July 8, 2008 the State Development and Reform Commission issued a circular, namely, Circular on Further Strengthening and Regulating Foreign Invested Project Management (“Circular”), in a bid to rein in the flood of speculative hot money into China by means of fake joint venture, submission of false total investment amount or setting up shell companies…