China’s Company Chop System and Risks to Foreign Investors

Since June 2020, a fight over the control of the China subsidiary of ARM, a leading semiconductor company, has centered around the possession of the company chop. ARM was reported to have fired its head of China, Allen Wu, who is still registered as the legal representative of ARM China. With control over the company chop and business licenses, Wu would seem to have a powerful weapon to use as a bargaining chip with ARM’s shareholders outside of China, even though there is no doubt he will eventually be removed from his position. How can physical possession of the company chop cause so much trouble for ARM’s shareholders?
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New Policies Impacting how Non-resident Companies Employ Beijing Staff

19 August 2020
Many international companies in China are based in one city, but may need to have employees based in another city. These employees will generally want social security in the place where they live and work, as this gives them crucial benefits in regard to medical care, schooling and housing. However, only locally-registered companies can make payments of social security premiums.
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The New Social Credit System - Corporate Compliance in China

24 June 2020
While some may continue to see China as a country where “anything is possible”, there is no denying that the Chinese government has been trying to create a more compliant business environment. The initiative with the biggest impact long-term may well be the introduction of a social credit system (SCS): every entity in China will be assigned a social credit score to reflect its legal compliance.
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SPC Issues Guiding Opinions on Handling Civil Disputes Involving COVID-19

On 20 April 2020, the Supreme People’s Court (SPC, China’s highest court) released the Guiding Opinions on the Proper Handling of Civil Cases Involving the Novel Coronavirus Outbreak in Accordance with the Law. Published soon after a batch of rulings issues on 24 March and 2 April, the Guiding Opinions emphasize a preference to have disputes resolved through mediation, but also reviews the conditions of the application of force majeure when handling civil cases involving the novel corona virus and the disease it causes, COVID-19.
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Fiscal Support Policies in Shanghai

With the current Covid-19 crisis, governments all over the world are implementing policies to support local businesses. In China too, companies can enjoy some relief relating to taxation (incl. tax deferments and increase of export tax rebates) and social insurance contributions, while state-owned landlords are offering rent-relief. However, it is less well-known that many district […]
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Environmental Assessment Risks for Manufacturers in China

24 March 2020
When our firm performs due diligence on Chinese manufacturing companies, one of the most important focal points is whether the company has passed all relevant environmental impact assessments. Many foreign investors are unaware that after a company has been formally established in China with “manufacturing” in its business scope, an environmental assessment process will usually […]
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Strategies for Dealing with Legal Compliance in China

In a webinar for the Danish-Chinese Business Forum, Maarten Roos (Director of R&P China Lawyers, a China-registered law firm) shared examples and case studies on compliance issues that foreign businesses face when doing business in China, and introduced approaches on how to deal with these challenges. Maarten touched on a number of non-compliance issues and […]
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Shanghai Takes New Measures to Stabilize and Attract Foreign Investment in 2020

During the Teleconference on Shanghai Commercial Work of 1 March 2020, the Shanghai Municipal Government introduced measures on controlling the COVID-19 corona virus but concurrently supporting companies and developing the economy. By making foreign investment one of the focal points, Shanghai continues to be a fervent supporter of foreign business in China. Measures to Support […]
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China Supreme Court Validates Electronic Evidence

Digital technologies have become widespread in China, and are a huge part of the economy’s success. For example, more than 750 million smartphones are currently in use in China, and tools such as WeChat and Alipay have become indispensable in daily life. In law however, the use of electronic data is still under development. In […]
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PRC Asset Preservation in Hong Kong Arbitration – New Opportunities

26 December 2019
As a PRC-licensed law firm, R&P China Lawyer advises on and represents international and domestic companies in Chinese litigation and enforcement, and in Chinese and international arbitration administered under PRC laws. For more information on our expertise, experience and how we can help you resolve your disputes, please write to [email protected] or your usual R&P […]
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