Contracting in China is a daunting task. An uncertain legal environment and perceived difficulties over enforcement all play their part. However, by applying certain common sense principles from the outset, and understanding key Chinese legal requirements, risks can be reduced. Labour contracts shall become legally binding once they are concluded in accordance with law. Here are few aspects that global employers should take care of while employing people in China.
A well-documented employment contract
The parties involved shall fulfill obligations stipulated in labor contracts. In the employment system of China, it is the well-documented employment contracts that are the most important part. Unlike the United States of America, where an employer can fire an employee at any time during his/her service, in China, the sudden termination of an employee could trigger a legal battle for the foreign companies. If you are an employer in China, all the full-time employees of your company must have a written employment contract with you, otherwise you could face penalties and administrative fines. Another downside of not having a written contract with your employees is that, Chinese authorities may treat it is an open-term employment agreement without any definitive end date. You certainly don’t want to face this situation.
A well-documented luxury products contract
Companies selling luxury products in China are faced with varied problems. There are various problems from a business perspective. Normally, the sellers are at risk much more than the buyers. The premium luxury market has slowed down and this trend still continues in 2017. this is particularly true for those companies which depend on gifting. However, it is not totally disappointing and bleak.
A well-documented copyright law contract
China copyright law is not that much different from USA copyright law. Most of the cases in China, copyrights arise as soon as an original work is created, even if the work executes outside of China. The executor needs not to register the copyright issue in China to be secured in that country. But it is always recommended to register because it is far easier and faster to get websites like Tmall and Taobao to take down infringing goods and to get China customs to stop infringing goods from leaving the nation. Also it makes sense to be clear – in writing – with your representatives in the matter of who claims the copyrightable works the representatives make as amongst you and them.
A well-documented cyber security law contract
China’s new cybersecurity law came into effect from 1st of June 2017. The law focuses on protecting personal information and individual privacy, and standardizes the collection and usage of personal information. As such, companies will now be required to introduce data protection measures, and sensitive data for instance, information on Chinese citizens or relating to national security must be stored on domestic servers.
The PRC Contract Law requires that the terms of the acceptance shall be identical to those of the offer. PRC law distinguishes between material and non-material alterations to the offer.