Law and regulations
Obey all Chinese laws and regulations, or else run the risk of sanctions or fines. Also be aware of any relevant regulations belonging to other countries. For example, if you are exporting technology from the US to China, check the US Bureau of industry and security regulations as American law prohibits transfer of some sensitive technologies without a license.
Partners
Make sure that if your partner is a subsidiary and defaults on payments, you will be able to collect from the parent company. Verify your partner's background with independent sources, such as corporate due diligence consultants. Ensure that your negotiating partners have the authority to make key decisions. You could lose a lot of money if you make a deal with the wrong partner.
Contracts
Do not enter into an agreement without sound advice from your legal counsel. Make sure that all signing parties have a common understanding of the terms. In your contract, specify exact terms of payment, performance standards and time lines and what should happen in case one party defaults. Do not agree to previsions in a contract that are not under your control. For example, you may be asked to specify in the contract that your partner must visit your overseas production facilities but you can not guarantee that he/she will receive a visa.
Payment terms
Check with legal counsel to determine the specific payment terms that are customary for a certain type of transaction. Protect yourself from loss by using financial instruments with an international bank, such as letters of credit. If you do not want to use a letter of credit, get your partner to agree to make advance payments. Avoid unsecured payments after delivery. For large projects, a combination of advance payment and payment after delivery with a letter of credit are common with Chinese companies.
International property rights
Register copyrights in China, even though theoretically copyrights for creative works are automatically in force under the Berne Convention, the international agreement on copyright. File trademarks with the State Administration of Industry and Commerce and notify Customs; file patent with the State Intellectual Property Organization to receive protection and notify Customs. China has numerous laws that encourage, restrict or prohibit investments in specific industry sectors. Learn in advance if any of these laws apply to your business when investing in China.
(Note: the aforesaid article with minor adjustments is cited from South China Morning Post of 26 January 2008 by Nixon Chan as senior executive commercial banking, HSBC, for reference only)
Obey all Chinese laws and regulations, or else run the risk of sanctions or fines. Also be aware of any relevant regulations belonging to other countries. For example, if you are exporting technology from the US to China, check the US Bureau of industry and security regulations as American law prohibits transfer of some sensitive technologies without a license.
Partners
Make sure that if your partner is a subsidiary and defaults on payments, you will be able to collect from the parent company. Verify your partner's background with independent sources, such as corporate due diligence consultants. Ensure that your negotiating partners have the authority to make key decisions. You could lose a lot of money if you make a deal with the wrong partner.
Contracts
Do not enter into an agreement without sound advice from your legal counsel. Make sure that all signing parties have a common understanding of the terms. In your contract, specify exact terms of payment, performance standards and time lines and what should happen in case one party defaults. Do not agree to previsions in a contract that are not under your control. For example, you may be asked to specify in the contract that your partner must visit your overseas production facilities but you can not guarantee that he/she will receive a visa.
Payment terms
Check with legal counsel to determine the specific payment terms that are customary for a certain type of transaction. Protect yourself from loss by using financial instruments with an international bank, such as letters of credit. If you do not want to use a letter of credit, get your partner to agree to make advance payments. Avoid unsecured payments after delivery. For large projects, a combination of advance payment and payment after delivery with a letter of credit are common with Chinese companies.
International property rights
Register copyrights in China, even though theoretically copyrights for creative works are automatically in force under the Berne Convention, the international agreement on copyright. File trademarks with the State Administration of Industry and Commerce and notify Customs; file patent with the State Intellectual Property Organization to receive protection and notify Customs. China has numerous laws that encourage, restrict or prohibit investments in specific industry sectors. Learn in advance if any of these laws apply to your business when investing in China.
(Note: the aforesaid article with minor adjustments is cited from South China Morning Post of 26 January 2008 by Nixon Chan as senior executive commercial banking, HSBC, for reference only)
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