Are you looking for a China business law guide? You have come to the right place. Clearway has relationships with lawyers in major cities in China. These lawyers practice primarily in tax and business law.

When you contact us, we will have one of the lawyers in China call or email you. Please tell us about your case so we can connect you with the right lawyer. Be as specific as possible.

Are you trying to protect your trademark when expanding into Asia? Or are you entering into a joint venture with a company in China? The more information, the better (as long as it’s relevant.)

If you want to speak to a legal consultant in China, contact him on Wechat: alistairvigier

Business Legislation in China

Expanding into China is a big decision. However, it can also be risky. When you have Chinese business lawyers on your team, it limits your risk. China does have laws, and you must follow them. These laws differ significantly from those in the United States, Australia, and Canada.

China is the third-largest country in terms of landmass. It has the largest population in the world. It has the 2nd largest economy in the world or the 76th largest per person.

Reading about the law for businesses in China is excellent. But if you are serious about growing, you need legal advice from a Chinese lawyer. You can speak to our lawyers to learn more about the law in China. Business is all about increasing your opportunities and reducing your risks.

Chinese Commercial Law

Many people have moved from small towns to large cities. Chinese people want to live in larger cities these days. China is trying to move from an export economy to a domestic consumption economy. The business will likely do well if the company can help China achieve its political goals.

Many businesses used to go to Hong Kong before going to mainland China. However, in 2020, China took back Hong Kong. As such, it makes more sense to go directly into the city you want to grow into.

There is no point in going to Hong Kong first as it now follows China’s laws. In the olden days, China invented gunpowder and tea. Recently, the country has been trying to regain its innovation and dominance.

Protect Your Intellectual Property

• Register a trademark in China
• Hire a law firm to sue anyone who copies your product
• Make sure the trademark was done correctly

You can speak to a chamber of commerce in China. They will help connect you with other people in their membership. They will give you on-the-ground business advice.

Many companies rush into China because they get so excited. That’s why knowing who you are doing business with is essential. You can never drop your guard. You also need to understand the Chinese tax structure. There is a value-added sales tax. We have tax lawyers in China that can provide you with legal advice.

PRO-TIP FOR CHINA:

“Get a Chinese partner from your home country. They can translate for you and help you with Chinese business culture. It can be very overwhelming.”

Challenges With Doing Business In China

The biggest challenge for companies from Canada, the United States, and Australia that come to China is being clear on why they want to expand into the country.

Many people get too excited about the population. There is a big difference between the population and the market.

You need to slow down and do things right. Hire an accountant and lawyer in China. We can help you connect with one. China is a long-term project. You are going to be there for a long time. It’s not something that you do for a bit and see what happens.

It’s also difficult to get information on the Internet in China. That’s why it’s lucky that you found our website. You should bookmark it, as we constantly write business blogs.

Legal Framework for Business in China

In China, you cannot rush into the terms of a deal and negotiation. You need to build a relationship with the person. That is one reason why hiring a Chinese lawyer (who can speak English) is helpful.

The lawyer can help with both the legal and cultural aspects.

The person you are meeting in China might ask you personal questions. You might wonder why they ask you if you are married. Are they hitting on you? Probably not. They also might ask:

• How old are you?
• Do you have children? How many?

They are just trying to build a long-term relationship.

Business Opportunities In China

If you can do something with the internet industry in China, you will likely do very well. You can also look for opportunities that tie into China’s plan to build the “Belt and Road.” There is a road plan and a shipping plan.

When making business connections in China, discuss the government’s plans and how you can help. The Belt and Road Plan aims to make it easier for people to trade with China.

For example, there are many businesses in Pakistan that are now doing business with China. China has built ports and roads in Pakistan. It has also offered a lot of loans to companies and countries. China lent the government and businesses 1.5 billion dollars in Sri Lanka to build a new shipping port. When Sri Lanka defaulted on the loan, China took over the port.

Corporate Law in China

There are business opportunities when there is a lot of money moving around. Many Chinese people love health products from other countries. They believe that people in Western countries know more about health than in China.

In the alternative, they believe that products are of higher quality outside of the country. Many Chinese are very concerned about their babies’ health.

People go to places like Canada or Hong Kong to buy many products. They will go to the place with empty suitcases and fill them up. Japan and Korea do well in the Chinese beauty industries. Many of the products are skin whiteners.

Are you looking to do business in China?

This page will kick off our English series on doing business in China and setting up or closing down a company. It’s essential to have all the information before you start.

While we are lawyers, we like to act more like a consulting company. Some people are scared to talk to law firms but are happy to talk to consultants. Therefore, instead of consultation, we will prepare a proposal.

Advantages Of Doing Business In China

The opportunities are massive in China. It has the second-largest economy in the world. Let’s say you start doing business in Australia and become very successful. However, if you own the Australian market, you are limited by the size of its economy.

If you do business with China and own the market, you could become one of the world’s largest companies. Take a look at the most significant market caps in the world. They are almost all American and Chinese companies.

The other advantage of doing business in China is that you will likely find it easier to raise money. People and investors will get excited that you are taking a big risk with a potentially big reward if it works out. In investment terms, this is called the total addressable market.

Doing Business In China Legal Issues

Since we are a legal consulting company with lawyers and paralegals in Canada and China, we will also discuss the risks of doing business in China.

Many of the legal issues are covered in the subsection blogs at the end of this article. However, we will give you a quick overview of many common legal problems in China.

The main two issues are intellectual property theft and criminal threats. Divorce can also be a real issue that can tie into criminal threats or exit bans. The main issue is a simple solution: get your trademark professionally registered. Also, have a business in China that can enforce your trademark.

If you have no plans to enforce your trademark, what’s the point in registering it? If someone steals your IP, make sure you have a Chinese lawyer who can start a lawsuit.

Your lawyer will show the registered trademark to the judge, along with proof that another company was using it illegally.

China Criminal Justice System

We will only cover the criminal justice system as it can be used against foreigners. Sometimes, when a joint venture is very successful, the Chinese partners might try to outperform the foreign partners.

This can be done by making allegations to the police, which can lead to exit bans or detention while the police investigate. Even if it was not true, you could still spend several nights in prison, which is scary.

The police can hold people for up to 37 days before formally arresting them. This can happen if you upset the wrong types of people. Spending 37 days in the prison of a foreign country is not a joke. Once arrested, they can hold you for over a year without criminal charges.

Business Legal Principles in China

You must be careful when doing business in China. The opportunities are massive, but so are the risks. Remember that things that are not criminal in Canada, the United Kingdom, and Australia could be illegal in China.

Speak to your business lawyer to prevent this sort of thing from happening. It is important to have strong agreements with the joint venture company. If you have already been arrested by the police, you should contact one of our criminal lawyers in China.

If the individual you are working with is wealthy, they can hire their lawyer to apply to the court for you to be arrested. This is called a “criminal lawsuit.” This is unique in China. Criminal law can become tied to business law in China. This will especially be true if you are seen to be breaking government rules.

Business Do’s And Do Not’s In China

• Do your research
• Hire a lawyer
• Register your trademark
• Have tight contracts with companies and employees
• Don’t upset the government
• Do not act like China is the same as your foreign country
• Don’t upset wealthy people or people in power
• Do make connections with influential people and treat them with respect
• Do not bribe people (criminal law)

Opportunities And Threats Of Doing Business In China

You will also have to consider other “boring” things, such as taxes and corporate structure. While everyone wants to read about marketing, search engine optimization, and sales, no one wants to read about taxes and legal compliance.

However, if you do a great job at sales and marketing, but you are not following China’s law, you will be worse than nothing. Everything you have built will be taken away, and you will likely end up in a worse position than if you hadn’t come to China.

You need to be correctly set up. Proper legal advice would help. Different legal and tax structures have pros and cons. You must also do due diligence on the Chinese company you partner with.

Our legal team can look to see if they have a history of criminal problems or other issues. Our team can see if there are any lawsuits against the company.

Legal Disputes In China

If you get into trouble with the law in China, it will be hard for you as a foreigner. You will have problems understanding unless you speak perfect Chinese. If you speak English, the courts or police will likely not understand you.

There are also cultural misunderstandings that you might not understand. You might be offending the judge or police, and you don’t know it. When dealing with small things, like taking pictures in the wrong place, usually foreigners won’t have any problems.

The police will assume you don’t know what you are doing. However, more significant things can be a problem. For example, if you are accused of owing money to a Chinese person, you might go to jail or get exit banned.

If you ever get in trouble, call us. Once you are in jail, it’s not the right time to start doing lots of research on the internet. Better yet, our lawyers can help you avoid getting into trouble in the first place.

Regulatory Environment for Businesses in China

Below is a story about a businessperson from Australia who moved to Tianjin. You might wonder what relationships do when running a business in China. Everything. If you are sued, arrested, or banned from China, it will impact your business.

There is a person that we will call Steve. Steve was dating a Chinese girl named “Sarah.” Sarah found out that Steve cheated on her. Sarah got into his house and destroyed it with a golf club. All of his furniture, the windows, and Steve’s clothes were destroyed. Sarah then hits Steve with the golf club, and Steve hits her back to grab the golf club. Sarah calls the police, and Steve is arrested.

The police say Sarah needs $10,000 to resolve the issue. Until Steve pays the money, the police will take away his Australian passport. This is essentially the same thing as exit-banning someone. You cannot board a flight to another country without showing your passport.

Steve paid the money. But Steve could also have hired a lawyer and spent $2000 on legal fees, which likely would have resolved the issue. He also did not get compensation for the damage to his destroyed house, which was around $7000. We hope you found this China business law guide helpful. Contact us if you need a lawyer in China.