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Understanding your rights as a creditor while navigating under China’s bankruptcy laws is becoming a must these days, especially for foreign creditors. As many foreign companies engage in business with Chinese companies, chances are likely that you will encounter a failing Chinese company that will file for bankruptcy in China. A China bankruptcy filing can have a tremendous impact upon foreign creditors.  If you are doing business with Chinese companies or have investments in Chinese companies, you should be aware of your rights as a creditor under Chinese bankruptcy laws. Knowledge about your rights as a creditor – whether it be filing a claim, recovering your property, compelling a bankruptcy administrator to continue performance of a contract or seeking its rescission, having the bankruptcy administrator examine and revoke fraudulent transfers and preferences or exercising set off rights – are all important legal rights which can help you to minimize your business risks.
Continue Reading Creditors’ Rights Clarified By Interpretation II of the Supreme People’s Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People’s Republic of China

On October 25, 2013, Premier Li Keqiang chaired an executive meeting of the State Council, and announced during the meeting that China is going to push forward the reform of the company registration regime, which will support a faster pace of economic reform in China and “arouse social investment vitality”.
Continue Reading “Unprecedented” Reform of Company Registration Regime in China

The current press is buzzing with news about the recent increase in antitrust investigations involving foreign companies with operations in China, and reports of foreign companies being told to expect higher fines if they “put up a fight” during investigations. At the same time, the Chinese enforcement agencies have started to make their decisions public. Putting these developments in perspective, the take-away is that antitrust in China should be taken seriously, the enforcement agencies are still in the development stage, and some progress is being made in transparency of decision-making.
Continue Reading Antitrust Investigations in China: Putting Things in Perspective

While the PRC Trademark Law and Implementing Regulations provide no real guidance on how or whether consent letters can be used to overcome trademark application rejections on relative grounds, in recent years, the TRAB has accepted such letters to support arguments that a rejected trademark should be registered on appeal. There has, however, been very little guidance as to the standards that should be applied by the TRAB, and by the Beijing courts when considering the relevance of consent letters, and because of this, TRAB decisions involving consent letters or co-existence agreements have been inconsistent. This Higher People’s Court decision provides important clarifications as to trademark appeals practice in China as it relates to consent letters and co-existence agreements, and as to how such appeals cases are likely to be handled by the TRAB and the Beijing courts going forward.
Continue Reading Beijing Higher People’s Court Clarifies Usage of Consent Letters to Overcome Trademark Rejections in the PRC

The long fight between China’s regulatory agencies for the private equity (PE) and venture capital (VC) industry has finally been concluded. By a notice on Division of Duties in Private Equity Fund Administration promulgated by the State Commission Office for Public Sector Reform (“SCOPSR”) on June 27, 2013 (“Notice”), the China Securities Regulatory Commission (“CSRC”) is designated as the sole regulator of China’s PE and VC industry.
Continue Reading CSRC Became Sole Regulator of PE Industry

On April 28, 2013, the State Administration of Foreign Exchange (the “SAFE”) promulgated the Administrative Measures of Registration of Foreign Debts (the “Foreign Debt Measures”) together with the detailed Operational Guidelines of Administration of Foreign Debt Registration (the “Guidelines”). Both regulations will be implemented from May 13, 2013. The Foreign Debt Measures and the Guidelines have simplified some of the foreign debt approval requirements and clarified previous uncertainties in the practice of foreign debt registration and administration. The key changes in the Foreign Debt Measures and Guidelines are as follows:
Continue Reading China Releases Administrative Measures on Foreign Debt Registration

Companies doing business in China should take careful notice that China is now paying more attention to personal data privacy collection. This would be an opportune time for private companies to internally review existing data collection and management practices, as well as determine whether these fall within the new guidelines, and where necessary, develop and incorporate new internal data privacy practices.
Continue Reading China’s First-Ever National Standard on Data Privacy – Best Practices for Companies in China on Managing Data Privacy

By Carol Xu

China’s State Administration of Taxation (“SAT”) released Bulletin [2013] No. 19, “Announcement on Issues Concerning Levying Corporate Income Tax on Services Provided by Non-residents through Seconding Personnel to China”《关于非居民企业派遣人员在中国境内提供劳务征收企业所得税有关问题的公告》 (“Bulletin 19”) to provide guidance on the treatment of non-resident enterprises’ individual secondment arrangement from the PRC corporate income tax (“CIT”) perspective.Continue Reading China SAT Releases Bulletin on CIT Treatment of Non-resident Enterprises’ Secondment Arrangement

By Brian Arbetter and Terese Connolly 

China has a new employment law. This new law significantly impacts an employer who does not directly employ its own workers, but instead uses agencies such as FESCO or third party staffing companies, also known as labor dispatching agencies. At the end of 2012, the Standing Committee of the National People’s Congress adopted the Decision on the Revision of the Labor Contract Law of the People’s Republic of China (“Amendment”). The Amendment will take effect July 1st of this year. The intent of the Amendment is to offer better protection to workers employed by labor dispatching agencies.

Labor dispatching is a common method of employment where a worker enters into an employment contract with a labor dispatch agency and is then dispatched to work in another company – commonly referred to as the “host company”. This type of employment arrangement has proved problematic because many of the dispatched workers are not paid wages commensurate with their work as compared to their direct hire, permanent employee counterparts. Additionally, the dispatched workers’ health and safety rights are not well protected. The Amendment tackles this problem by requiring employers to hire the majority of their workforce directly and by strictly controlling the number of dispatched laborers. Moreover, the Amendment clearly states that all employers shall stick to the principle of “equal pay for equal work”. Continue Reading China Enacts New Employment Law Affecting Employers Who Do Not Directly Employ Their Workers