Business Regulations in China: What You Need to Know

If you do business in China, staying current with its regulations and business environment is paramount. For your reference, here’s a reading list of commentary and analysis by lawyers and law firms on JD Supra on recent events.

China Clarifies and Expands Reporting Obligations of Foreign Enterprises on Indirect Equity Transfers (Sheppard Mullin Richter & Hampton LLP)

“The Announcement clarified the tax reporting obligations of non-resident enterprises to make payments related to interest, leasing fees, guarantee expenses, property rentals, equity investments and transfers originating from China. More importantly, the Announcement contains interpretations of Guo Shui Han [2009] No. 698 relating to Regulations on Enhancement of Income Tax of Non-resident Enterprises (“Circular 698”) which requires, among other things, all foreign enterprises to report their gains from any indirect transfers of Chinese-resident enterprises to the applicable Chinese tax authorities.” Read more »

The FCPA in BRIC Countries: 2011 Enforcement Trends in Emerging Markets (McDermott Will & Emery)

“In the coming decade, developing BRIC (Brazil, Russia, India and China) economies will continue to expand while becoming further intertwined in the global economy. Attractive as potential investment opportunities in BRIC may be, U.S. and multinational companies need to remain vigilant to the potential corruption risks of doing business in these emerging markets. It is apparent that BRIC-based entities will become increasingly subject to U.S. FCPA enforcement in coming years, while emerging market governments are increasingly willing to piggyback off U.S. enforcement actions, and cross-border cooperation will increase in enforcing anti-bribery laws.” Read more »

China’s NDRC Adopts New Measures to Further Regulate Equity Investment Enterprises in Pilot Regions (Morgan Lewis)

“On January 31, 2011, China’s National Development and Reform Commission (NDRC) issued a “Notice on Further Regulating the Development and Record-Filing Administration of Equity Investment Enterprises in Pilot Regions” (the Notice). The Notice provides a more specific operating and compliance guidance for equity investment enterprises (EIEs) established in four pilot regions (specified below). Generally speaking, a private equity (PE) firm, whether domestic or foreign-invested, is an EIE as defined in the Notice.” Read more »

China Releases New Rules on Merger Control Review (Steven Su)

“Recently, China’s Ministry of Commerce(MOFOCM) has published a new draft regulation, the Provisional Measures on Assessment of Competitive Effects of Concentration of Business Operators (the “Provisional Measures”). The Provisional Measures outline the basic principles and methodologies for assessing competitive effect of a merger.” Read more »

Transfer Pricing Developments in China – a CRA Insight publication (Peter Chen)

“Where do things stand today? What should multinational corporations that are doing business in China expect in the area of transfer pricing? In this issue of CRA Insights: Transfer Pricing, Vice President and Practice Leader in the Asia Pacific region, Peter Guang Chen, seeks to answer these questions and more with a discussion of the latest transfer pricing developments in China.” Read more »

U.S. Department of Commerce Proposes Drastic Policy Change in Handling Antidumping Administrative Reviews of Non-Market Economy Countries, Including China (Katten Muchin Rosenman LLP)

“A June 10, 2011, Federal Register Notice proposes to change how Commerce instructs U.S. Customs and Border Protection (CBP) to liquidate antidumping entries after concluding an administrative review. Under Commerce’s existing practice, it instructs CBP to liquidate entries that were not reviewed or examined in the administrative review at the cash deposit rate at the time of entry. With this policy change, Commerce will begin instructing CBP to liquidate these non-reviewed entries at “country-wide” rates rather than at the cash deposit rate.” Read more »

China’s Growing Constellation in the Global IP Sky (Finnegan)

“The dizzying growth in patent filings in China shows little signs of slowing down. According to SIPO Commissioner Tian Lipu, ‘By the end of the 12th Five Year Plan (2011-2015), invention applications received by SIPO every year are expected to double over the current number. More companies will have their own patents and [intellectual property rights].’” Read more »

China Issues New Guidelines on Data Privacy Protection (Morrison & Foerster LLP)

“The PRC General Administration for Quality Supervision, Inspection, and Quarantine (“GAQSIQ”) and the Commission for the Administration of Standardization (the “Commission”) have circulated a draft Information Security Technology Guidelines for Personal Information Protection (the “Guidelines”). The Guidelines, if issued, would represent another in a series of recent efforts by Chinese authorities to address their citizens’ personal data protection concerns in the absence of a comprehensive regulation on this issue.” Read more »

China Beefs Up Its Anti-Bribery Law With Its Very Own Version Of The FCPA (Sheppard Mullin Richter & Hampton LLC)

“On February 25, 2011, the [People’s Republic of China] legislature passed 49 amendments to the PRC Criminal Law. One such amendment – Amendment No. 8 of the PRC Criminal Law – criminalizes the payment of bribes to non-PRC government officials and to international public organizations (the “Amendment”). While the Amendment is brand new and no interpretive guidance has been issued, it appears to be the PRC’s version of the United States Foreign Corrupt Practices Act (“FCPA”).” Read more »

For further research, you may find these articles useful as well:

Alert on M&A National Security Review in China (Richard C. Lee)

China – Hong Kong Legal Update – Offshore Deposit of Foreign Exchange Income (Quynh Pham)

Shanghai Municipality Issues Measures for the Launching of a Pilot Foreign-Invested Equity Investment Enterprise Project in Shanghai (Jaime Ubilla)

China Provides Further Guidance for Chinese Outbound Investment (McDermott Will & Emery)

Welcome to the FCPA: Chinese Companies and Reverse Mergers (Thomas Fox)