Highlighting Few Key Aspects of Doing Business in China

Foreign Investment Law

Cultivating a robust compliance culture and a strong compliance tone from the top is paramount. Your most important first step to preventing China’s corruption compliance problems is to establish a strong anti-corruption policy that addresses both China’s anti-corruption laws and those of your home country. Under Chinese President Xi Jing Ping’s anti-corruption campaign, the enforcement has expanded to focus not only on governmental officials but also on the business communities. Now Chinese prosecutors and judges now put more weight on penalizing the crime of bribery.

 

Compliance Plan: A documented process that is company-specific and outlines how the business will operate within the required governmental rules and regulations. Plans usually contain standard operating procedures (SOPs), training materials and frequency schedules, key contacts, current commodity lists, and more.

 

Protecting Proprietary Technology

A maximum number of foreign companies have highly sophisticated their production line. The manufacturer owns the design, and the specifications are set by the manufacturer, not the buyer. The buyer often chooses from a menu of specifications. Proprietary product lines give a distributor complete control and ownership. From image to branding, quality to price, it is the distributor who controls the entire product. It gives a unique opportunity to the distributors to come up with an exclusive marketing strategy for their product and build a steady brand-building game plan. Proprietary product lines and brands give excellent gross margins and enhance the profitability margin for the distributor.

 

Laws on Real Property in Urban Areas

In addition to the Property Rights Law, China regulates real property through a series of other laws and regulations, including the PRC Law on Land Management, the Land Registration Measures, the Interim Regulations Concerning the Assignment and Transfer of the Right to Use State-Owned Land in Urban Areas (Assignment Regulations), and the PRC Law on the Administration of Urban Real Estate (Urban Real Estate Law). Among these laws and regulations, the Assignment Regulations and the Urban Real Estate Law primarily regulate land-use rights and ownership of residential property in urban areas.

 

China has become one of the world’s major IP jurisdictions. Innovation and IP protection have been encouraged by the Chinese government. Foreign companies can register IP in China for trademarks, patents, designs, and copyright. However, each of these is administered by a different government body. The primary law in China pertains to copyright. This protects copyrighted works of foreigners that are either first published in China or in countries that are signatories to the World Intellectual Property Organization (WIPO) copyright protection treaty.

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