DOCSLIB.ORG

Doing Business in China 2020

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Doing Business in China 2020 2020 Doing Business in China 2020 Doing Business in China 2020 Table of Contents 1 Introduction......................................................................................................................................................... 1 2 Foreign Invested Enterprises ..........................................................................................................................2 3 Foreign Invested Partnerships ....................................................................................................................... 6 4 Representative Offices .................................................................................................................................... 8 5 Mergers and Acquisitions.............................................................................................................................. 10 6 Distribution........................................................................................................................................................ 13 7 Imports and Exports in China........................................................................................................................ 15 8 Data Protection and Cybersecurity Compliance ......................................................................................19 9 Antitrust and Competition Laws ................................................................................................................. 24 10 Intellectual Property Protection ..................................................................................................................33 11 Employment Issues......................................................................................................................................... 44 12 Taxation ............................................................................................................................................................. 47 13 Dispute Resolution ......................................................................................................................................... 50 14 Anti-Bribery and Compliance .......................................................................................................................60 15 About the Firm ................................................................................................................................................. 65 Baker McKenzie FenXun i Doing Business in China 2020 1 Introduction This guide provides an introduction to selected aspects relating to investment and business operations in the People’s Republic of China (“PRC” or “China”) under current Chinese laws and policy. China is a vast country, where national laws, local regulations and implementing procedures provide a complex legal framework for doing business. As discussed in further detail in Section 2, the newly enacted Foreign Investment Law generally grants foreign investments national treatment and allows investors to set up business in China in a variety of forms: companies (which include limited liability companies and joint stock companies), partnerships, branches, representative offices, etc. This guide provides a brief outline of the most frequently used forms of foreign investment: companies, partnerships, and representative offices. The guide also includes a summary of important areas of concern to all investors in China: mergers and acquisitions, competition issues, taxation, employment, intellectual property protection, trade and import and export rules, as well as compliance and dispute resolution issues. Baker McKenzie FenXun 1 2 Foreign Invested Enterprises 2.1 Foreign Investment Law In 2019, the National People’s Congress of the PRC passed the Foreign Investment Law (“FIL”), a landmark fundamental legislation to regulate foreign investments in the PRC and provide stronger protection for foreign investors. The FIL took effect from January 1, 2020, repealing at the same time the prior laws governing Sino-foreign equity joint ventures, Sino-foreign cooperative joint ventures, and wholly foreign owned enterprises and their respective implementation regulations. From the effectiveness of the FIL, all foreign-invested enterprises (the “FIEs”), be it joint ventures or wholly foreign owned entities, will be governed by the Company Law of the PRC (the “Company Law”) if they are incorporated, or other relevant laws such as the Partnership Law, if they are unincorporated, in the same way as all Chinese domestic entities. This section focuses only on entities in the form of companies under the Company Law including limited liability companies and joint stock companies. As the FIL has fundamentally altered the existing foreign investment laws, it is unsurprising that local regulators need some additional time to respond to the new law and additional regulations and precedents are needed to provide clear guidance in resolving some issues of corporate organization, management and government procedures. Further implementation regulations and rules are expected to be issued, which hopefully can provide practical guidance on these issues. 2.2 National treatment and restrictions The FIL establishes that China continues to maintain its “opening-up” policy and encourages foreign investment in China. Under the current regime, foreign investors are accorded national treatment for investment in most sectors and treated the same as domestic investors. Only a small number of sectors are restricted or prohibited for foreign investment. These restricted or prohibited sectors are specified in a nationwide Negative List as issued and amended from time to time. Generally, foreign investors investing in a restricted sector will have to satisfy certain additional requirements that are inapplicable to domestic investors. These requirements include, for example, caps on foreign shareholding percentages and requirements that Chinese citizens hold certain management positions. In addition to the nationwide Negative List, there is also a less restrictive Negative List applicable to the free trade zones in a few selected cities. In these free trade zones, foreign investors may invest in certain sectors that are restricted for foreign investments outside the zones without any or with lesser restrictions than elsewhere in China. 2.3 Establishment The applicable procedure for establishing an FIE first hinges on whether foreign investment in the sector is restricted. Over the past decade, China has implemented several reforms to simplify the procedures for foreign investments. Currently, the procedures are largely reduced to a so-called “business license first, operating permits later” approach. This approach means, for most sectors, the investor can set up the operating entity and receive the business license - the equivalent of a certificate of incorporation - from the State Administration for Market Regulation (“SAMR”) or its local counterparts without having to apply for various operating permits beforehand. 2 Baker McKenzie FenXun Doing Business in China 2020 In greenfield projects involving fixed asset investments such as building a plant, the project will have to be approved or recorded with the National Development and Reform Commission or its local government counterparts depending on the size and nature of the project. Approvals of the construction plan and construction work are also necessary. There are general trends placing greater importance on environmental protection for projects having potential impact on the environment. These projects will require environment impact assessment (“EIA”), which is usually under the jurisdiction of the competent local environmental protection bureau. Subsequent to or in parallel with the EIA and the land or construction related approvals, additional regulatory approvals or operating permits may be required depending on the nature of the business. For example, a food manufacturer will have to apply for a food production permit before the production line can be put in use. Although the above “business license first, operating permits later” approach applies to most foreign investments, for certain highly regulated businesses, the investor still have to obtain the prerequisite approval of the industrial authority before setting up the entity. For example, to invest in general aviation activities, the investor must first obtain a corresponding general aviation operating license before it can apply for the business license with the SAMR. After or in parallel with the EIA and the land and construction related approvals, and depending on the specific situation of each case, additional approvals may be required. 2.4 Documentation Under the current regime, documents required for setting up an FIE typically include a standard application form, the articles of association, appointment letters and identification documents of the directors and supervisors, office ownership or lease documents, etc. For joint venture companies, the Company Law unlike the prior Sino-foreign joint venture laws requires no joint venture contract (or shareholders’ agreement) to be part of the constitutional documents of a joint venture company. Nevertheless, it is recommended that the joint venture partners negotiate and execute a joint venture contract to govern their relationship and specify arrangements such as right of first offer or refusal, tag-along or drag-along right, change of control trigger, reserved matters, information rights, etc. Due to the change in law, certain
Load more

Recommended publications
  • Doing-Business-In-China-2020.Pdf
    2020 Doing Business in China 2020 Doing Business in China 2020 Table of Contents 1 Introduction......................................................................................................................................................... 1 2 Foreign Invested Enterprises ......................................................................................................................... 2 3 Foreign Invested Partnerships ....................................................................................................................... 6 4 Representative Offices .................................................................................................................................... 8 5 Mergers and Acquisitions .............................................................................................................................. 10 6 Distribution........................................................................................................................................................ 13 7 Imports and Exports in China ........................................................................................................................ 15 8 Data Protection and Cybersecurity Compliance ..................................................................................... 19 9 Antitrust and Competition Laws ................................................................................................................. 24 10 Intellectual Property Protection ................................................................................................................
    [Show full text]
  • 2020 Annual Report.Pdf
    HAITONG SECURITIES CO., LTD. 海通證券股份有限公司 Annual Report 2020 年度報告2020 年度報告 Annual Report 2020 CONTENTS Section I DEFINITIONS AND MATERIAL RISK WARNINGS 3 Section II COMPANY PROFILE AND KEY FINANCIAL INDICATORS 7 Section III SUMMARY OF THE COMPANY’S BUSINESS 25 Section IV REPORT OF THE BOARD OF DIRECTORS 33 Section V SIGNIFICANT EVENTS 85 Section VI CHANGES IN ORDINARY SHARES AND PARTICULARS ABOUT SHAREHOLDERS 123 Section VII PREFERENCE SHARES 136 Section VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES 137 Section IX CORPORATE GOVERNANCE 191 Section X CORPORATE BONDS 229 Section XI FINANCIAL REPORT 240 Section XII DOCUMENTS AVAILABLE FOR INSPECTION 241 Section XIII INFORMATION DISCLOSURES OF SECURITIES COMPANY 242 2 HAITONG SECURITIES CO., LTD. | Annual Report 2020 (H Share) IMPORTANT NOTICE The Board, the Supervisory Committee, Directors, Supervisors and senior management of the Company warrant the truthfulness, accuracy and completeness of contents of this annual report (the “Report”) and that there is no false representation, misleading statement contained herein or material omission from this Report, for which they will assume joint and several liabilities. This Report was considered and approved at the 15th meeting of the seventh session of the Board. All the Directors of the Company attended the Board meeting. None of the Directors or Supervisors has made any objection to this Report. PricewaterhouseCoopers Zhong Tian LLP (Special General Partnership) and PricewaterhouseCoopers have audited the annual financial reports of the Company prepared in accordance with PRC GAAP and IFRS respectively, and issued a standard and unqualified audit report of the Company. All financial data in this Report are denominated in RMB unless otherwise indicated.
    [Show full text]
  • Year of the Ox Disputes Brochure V6
    The shape of things to come What to expect in the Year of the Ox The shape of things to come What to expect in the Year of the Ox Contents 2 The shape of things to come What to expect in the Year of the Ox Foreword 4 The new world order 6 Sanctions and export controls: newest and the most popular tools of warfare of our times 7 National Security Law: review and predictions 10 COVID-19: a year on and the year ahead 13 Competition 14 Enforcement of the Hong Kong Competition Ordinance 15 Regulatory 18 Singapore’s Individual Accountability and Conduct Guidelines 19 Is Hong Kong on its way to a mandatory data breach notification regime? 20 Hong Kong’s proposed licensing regime for virtual asset service providers 21 Growth in green and sustainable lending 22 Arbitration 24 Hong Kong’s public consultation on outcome related fee structures in arbitration 25 Arbitration highlights in the Year of the Ox 26 Litigation and cross-border dispute resolution 30 Update on the reciprocal recognition and enforcement of judgments between the Mainland and Hong Kong 31 Are keepwell deeds valid in the eyes of PRC courts? 32 Court of Final Appeal cases to look out for in the Year of the Ox 33 New appointments to the Court of Final Appeal 35 Employment 36 Hong Kong extends statutory maternity leave from 10 weeks to 14 weeks 37 Global reach: glossary of Eversheds Sutherland’s guides 40 Contacts 42 3 The shape of things to come What to expect in the Year of the Ox Foreword 4 The shape of things to come What to expect in the Year of the Ox When I took over my current leadership role in our team last May, it was already clear that the Year of the Rat was going to be an extraordinary year.
    [Show full text]
  • Curiae the Journal of the Society for Advanced Legal Studies
    Amicus Curiae The Journal of the Society for Advanced Legal Studies Inside ... Introduction Read more on pag e 145 Articles Read more on pag e 151 Review Article Read more on pag e 237 Notes Read more on pag e 244 Read more on pag e 145 Book Review Read more on pag e 290 News and Events Read more on pag e 294 Contributors’ Profiles Read more on pag e 299 Visual Law Read more on pag e 303 Series 2, Vol 2, No 2 144 Amicus Curiae CONTENTS Editor’s Introduction Book Review Michael Palmer . 145 Nadja Alexander and Shouyu Chong Articles (2019) The Singapore Convention on Mediation—A Commentary Mediation: Alternative? Or a First Choice for Resolving Disputes Ling Zhou . 290 Lesley A Allport . 151 News and Events Old Wines in New Bottles? Private Building Transformation Project Securities Litigation in China’s New Update . 294 Securities Law ILPC Annual Lecture and Annual Ding Chen . 169 Conference . 294 Proving Chinese Law in the Courts Legislative Drafting Course . 296 of the United States: Surveying and Selected Upcoming IALS Events Critiquing the Article 277 Cases . 296 Richard K Wagner . 188 How to get a PhD in Law . 298 Online Dispute Resolution Podcasts . 298 Simulation: Shaping the Curriculum Contributors’ Profiles . 299 for Digital Lawyering Visual Law Faye F Wang . 216 Three Courts in Shenzhen, China Review Article Ling Zhou . 303 Elizabeth Fisher, Jeff King and Alison L Young eds—The Foundations and Future of Public Law: Essays in Honour of Paul Craig Amicus Curiae Contacts Patrick J Birkinshaw . .. 237 Editor: Professor Michael Palmer, Notes SOAS and IALS, University of Human Rights, China and the UN: London A UPR Mid-term Assessment Production Editor: Marie Selwood Matthieu Burnay & Eva Pils Email address for all enquiries: .
    [Show full text]
  • Yuxiang Hu Partner
    Yuxiang Hu Partner Expertise: Dispute Resolution Tel: + 86 10 8587 0068 Fax: + 86 10 8587 0079 E-mail: [email protected] Practice Areas and Experience Yuxiang Hu is a partner of Dispute Resolution Department of Chance Bridge Partners. His practice focuses on financial and commercial dispute resolution. He represented large state-owned enterprises and financial institutions such as China Construction Bank, Xiamen International Bank, Ping An Trust, COFCO Trust, Huaxin International Trust, CITIC Securities, HUARONG Securities, ZHONGSHAN Securities and Galaxy Jinhui. He participated in various major and complex cases before the Supreme People's Court, high courts in different regions, financial courts and arbitration commissions. The amount of subject matter involved in such cases exceeded 6 billion RMB. He also provided legal services for China Minsheng Bank, Power China Real Estate Co., Ltd, Langold Real Estate Co., Ltd and COFCO Real Estate Co., Ltd. in dealing with complicated risk management matters, and won favorable comments from clients with his excellent performance in trials and negotiations. Education Background MBA in Tsinghua University (Part-Time). LL.B., Renmin University of China (2011). Work Experience Mr. Hu joined Chance Bridge Partners in 2018. 1 Prior to joining Chance Bridge Partners, Mr. Hu worked for Clifford Chance LLP and a PRC law firm for many years. Representative Cases Trust and Bank Represented Ping An Trust in the Guangdong High Court and the Supreme Court in the first and second instance of
    [Show full text]
  • The People's Republic of China
    THE PEOPLE’S REPUBLIC OF CHINA Tim Yimin Liu Iris Tingting Yang THE ICCA REPORTS THE PEOPLE’S REPUBLIC OF CHINA Tim Yimin Liu Iris Tingting Yang a. Parties’ Right to a Physical Hearing in the Lex Arbitri 1. Does the lex arbitri of your jurisdiction expressly provide for a right to a physical hearing in arbitration? If so, what are its requirements (e.g., can witness testimony be given remotely, etc.)? Short answer: No. The Chinese lex arbitri is primarily based upon the Arbitration Law of China Amendment 2017. A right to a physical hearing in arbitration varies according to different types of arbitrations in China: for “domestic arbitrations” and “arbitrations with foreign elements”, Chinese lex arbitri is silent on such a right; whereas for “foreign arbitrations”, it largely confers to the lex arbitri of the seat. As a clarification, (i) “domestic arbitration” means an arbitration seated in China and administered by Chinese arbitration commissions; (ii) “arbitration with foreign elements” means that the arbitration agreement has foreign element,1 such as either one of or all of the parties is/are a foreign individual(s) or legal person(s); the habitual residence of either one of or all of the parties is located outside of China; the subject matter is outside of China; the legal facts causing the creation, change or extinction of the legal relationship in connection with the dispute occurred outside of China, etc.2 In essence, arbitrations with foreign elements are still Chinese domestic arbitrations, because they are seated in China, administered by branches of the Chinese arbitration commissions formed by the China International Chamber of Commerce 3 (among others, China Tim Yimin Liu is a partner at Global Law Office, Shanghai.
    [Show full text]
  • Propagation of a Case Culture in China and Potentially Beyond* Dr
    CHINA LAW CONNECT • Issue 2 (September 2018) Propagation of a Case Culture in China and Potentially Beyond* Dr. Mei Gechlik Founder and Director, China Guiding Cases Project Li Huang Assistant Managing Editor, China Guiding Cases Project Jennifer Ingram Managing Editor, China Guiding Cases Project n late 1978, China adopted its open door policy to Iwelcome foreign investment, setting in motion a series “To alleviate growing concerns over the escalating of economic and legal reforms. Four decades passed. The [U.S.-China] trade war […], China’s ability to show country has become the world’s second largest economy. concrete judicial practices demonstrating a history of More than 2,500 national laws and thousands of other relative success in abiding by [the principles of fairness types of legislation are on the books. But what is the law in and equality] will help them keep their counterpart at action? Judicial cases offer a glimpse of the Chinese legal the negotiation table.” system which is otherwise rather opaque. What the law in action is in the Far East matters to the Initiative (the “BRI”) in 2013, essentially urging the rest United States. The Vitamin C case recently decided by the of the world to open their doors to Chinese investment. U.S. Supreme Court is illustrative. The unanimous decision The BRI has placed China in the same position as that of highlights that a foreign government’s (in this case, China’s the country’s own foreign investors who have, for decades, Ministry of Commerce’s) statement on the law of its country called for a Chinese legal system that is governed by the should only be accorded “respectful consideration”, instead of rule of law.
    [Show full text]
  • Developments in Financial Services Arbitrations in Shanghai
    Developments in Financial Services Arbitrations in Shanghai Kluwer Arbitration Blog July 21, 2019 Li Tingwei, Xu Zhihe (Shanghai International Arbitration Center) Please refer to this post as:Li Tingwei, Xu Zhihe, ‘Developments in Financial Services Arbitrations in Shanghai’, Kluwer Arbitration Blog, July 21 2019, http://arbitrationblog.kluwerarbitration.com/2019/07/21/developments-in-financial- services-arbitrations-in-shanghai/ Arbitration is often used to resolve financial disputes in China. For example, China’s financial regulation organs,i.e. , People’s Bank of China, China Securities Regulatory Commission, China Insurance Regulatory Commission and China Banking Regulatory Commission, each have made efforts in promoting the use of arbitration in their regulated areas of business. Data released by the Ministry of Justice of China shows that 544,535 arbitration cases were accepted by the 255 Chinese arbitration institutions in 2018. Among these, 120,358 (roughly 22.1% and the highest) were financial disputes. The total amount of these financial disputes reached some 233.4 billion RMB (roughly 33.6% and the highest). Several Chinese arbitration institutions, like Shanghai Arbitration Commission (“SAC”), Guangzhou Arbitration Commission and Jinan Arbitration Commission, have also set out arbitration rules specially tailored for resolving financial disputes. In major financial centers like London and Hong Kong, data shows that London Court of International Arbitration (“LCIA”) accepted 317 cases in 2018, where 29 percent of them are banking and financial disputes;while Hong Kong International Arbitration Center (“HKIAC”) accepted 460 cases (262 arbitrations), where 29.3% of them are financial disputes. An earlier post discussed, amongst others, LCIA’s traditional role in derivatives arbitrations.
    [Show full text]
  • Results Announcement for the Year Ended 31 December 2020
    Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 6837) RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2020 The Board of Directors (the “Board”) of Haitong Securities Co., Ltd. (the “Company”) hereby announces the audited results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2020. This announcement, containing the full text of the 2020 annual report of the Company, complies with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to information to accompany preliminary announcement of annual results. The Group’s final results for the year ended 31 December 2020 have been reviewed by the audit committee of the Company. PUBLICATION OF ANNUAL RESULTS ANNOUNCEMENT AND ANNUAL REPORT This results announcement will be published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company’s website (www.htsec.com). The Company’s 2020 annual report will be dispatched to holders of H shares and published on the websites of the Company and The Stock Exchange of Hong Kong Limited in due course. By order of the Board Haitong Securities Co., Ltd.
    [Show full text]