The importance of local rules and policies when investing in China

The importance of local rules and policies when investing in China.

Now that a new comprehensive Foreign Investment Law is about to come into force in China in January 2020, one may not forget to continue to look into the local rules and policies.

The legal assessment of the location of your joint venture in China remains vital as local rules and policies may have a direct effect on the structuring of your Joint Venture and IP issues and need to be made prior to the signing of the Joint venture agreement.

These rules may indeed prescribe certain conditions with regard to the lease of the premises, the participation share of the foreigner, use of the technology and IP licensing which may give rise to unforeseen legal consequences such as non-application of certain tax incentives, technology transfer etc.  Also principles of ‘consolidation’ with regard to tax incentives may give rise to extra benefits for the Chinese partner of which the Joint Venture may not benefit directly from or be aware off.

The Chinese English version of the new foreign investment law :

http://www.21join.com/index.php?m=content&c=index&a=show&catid=20&id=870

For more information please consult Managing partner Patricia Leers, Head of the international department at p.leers@a-law.eu or fill in our online contact form.

Or our in-house Chinese Lawyer Mo Chen and legal representative of A-Law Shanghai Office m.chen@a-law.eu 

Reminder : 13^th of June 2019  Seminar on doing business with Senegal and Gambia https://www.a-law.eu/en/legal-advice/seminar-doing-business-gambia-senegal-faire-des-affaires