Top Legal Considerations for Doing
Business in China
1. Doing business in China for US companies
involves considerations not only of Chinese
law, but also of US law. Companies need to
understand the impact of both countries’
laws on their business dealings with China.
(All China Sourcing, LTD. has the experience
of YEARS of doing business in China and
collaborating between U.S. and Chinese
businesses.)
2. China’s commercial laws are changing
rapidly to correspond to Western commercial
laws, but the process is not yet complete,
and there remain many uncertainties.
3.
What the law says in China and how it is
implemented are not always the same, just as
it is in the U.S. Although the laws have
improved, implementation of the laws is
sometimes spotty.
4.
China has numerous laws that encourage,
restrict and prohibit investments in
specific industry sectors. If you are
thinking of investing in China, learn
whether any of these laws apply to your
project. (Again, this is why it is important
to work with All China Sourcing, LTD. Our
experience and knowledge in doing business
in China is an invaluable asset!)
5.
China has made many improvements in its laws
for the protection of intellectual property.
U.S. companies doing business in
China need to structure their transactions
and draft agreements with their Chinese
counterparts with an eye toward minimizing
the risk of intellectual property rights
violations.
6.
Remember that differences between Chinese
and US cultural norms can lead to parties
attributing different meanings to the same
set of facts. It is important that in any
agreement, you and your Chinese counterpart
have a common understanding of what is
expected of each of you and what you are
agreeing to. (This is yet another reason to
use All China Sourcing, LTD.
See Cultural Rules.)
7. Although gift giving is an important part
of Chinese culture, the US Foreign Corrupt
Practices Act prohibits American companies
from making “corrupt payments” of money or
anything of value to foreign officials for
the purpose of obtaining or keeping
business. This includes both direct payments
and indirect payments through
intermediaries. The law provides an explicit
exception for "facilitating payments" for
"routine governmental action" such as
obtaining permits, processing governmental
papers, and securing services such as police
protection, mail pick-up and delivery, phone
service, power and water supply. However,
the lines between “corrupt payments” and
“facilitating payments” can sometimes be
hazy, so when in doubt, seek advice of
counsel.
All China Sourcing, LTD. is prepared to
handle all aspects of outsourcing your
manufacturing project to China.
CLICK HERE TO CONTACT US TODAY!
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