Practice
Business Law for Foreigners in China
In the early 1990’s, the state owned enterprises in China played a major role in building the economy of the country. The business scenarios were totally different and the customers had no other choice than to adjust with things that were happening. The market was not competitive and monopoly existed in all sectors. But as years went on, with the demand for anti-monopoly laws, the government made changes in the law which allowed private players to participate in business. China allowed foreign enterprises to enter its market with a vision to develop the economy and in the meanwhile safe guard the interests of the foreign enterprises. The law does not refer to the branches of the foreign organizations that exist in the country and encourages the establishment of firms which have advanced and developed technology which increases the export business in the country. When starting the enterprise, the foreign entity must make sure that the books of accounts are set up in China, the reports of financial activities need to be submitted in accordance with the rules and regulations. The taxation and the financial authorities have the power to inspect and supervise the financial reports and the transactions that take place in and out of the foreign enterprise. All the raw materials can be purchased from both national and international markets by following fair practices of conducting business. The employment of Chinese personnel should take place with the signing of contacts which show the conditions of employment, termination, protection, insurance and other issues while following the regulations laid by the law. The enterprise will have a certain period of operation in the country which can be extended by submitting the required forms which will later be examined by the regulated body of the government. And when the foreign enterprise is terminated, the business license should be submitted.
Doing business in China
China being a communist country, the laws are made very strict, to protect the rights of the citizens of the country. When starting up a business in China, it should be clear and understandable that there will be a lot of contact that will take place with the investors and the officials in China. One should learn everything which involves in investing in a business that includes the culture, etiquette, techniques of negotiation and meeting protocol. It is very important to establish contacts with people who can act as an intermediary, so that there is no chance of unintentional problems to emerge. With this, one should remember to maintain formal business relationships with the Chinese counterparts when representing the foreign enterprise and there should be a mutual relationship for the success of the business. Apart from this, relationships should also be maintained with the government, partners, investors and the staff, this practice in China is known as Guangxi (relationship). The business market in China is open where there is no monopoly existing i.e., it allows competition between businesses. Some foreign investors fear that the imitation industry in China may reduce the sales of their products, but one should understand that services and products delivered in high quality will prevail in the market. In order to invest in China, there are three options available – wholly foreign owned enterprise, Sino-foreign joint venture and Chinese-cooperative enterprise. Among these three types, the Sino-foreign joint venture is ideal because it entails less governmental procedures and the time for authorization is also minimal compared to the other two types of investments.
Copyright Law
The Copyright Law falls under Property Law. These are a set of rights vested on the initiator of the work that is original which can be transferred and licensed. In general context, the Copyright Law gives Copyright to the original creator and the rights last for certain period, which when expired becomes the property of the public. This law is very strict in China, to protect the ideas or products that were designed in China by its citizens. Anyone who is found not following this law will be dealt severely. China is the leader in technology and reverse engineering and to protect these ideas or products from being robbed or re-made, this law is vital in China. According to this law, any citizen who is from a country which has an international treaty with China enjoys the protection of the right of the original ideas or products in the country.