The legal environment in China offers a strict yet advantageous platform to many international companies.

Despite so many restrictions, stringent rules & regulations, China has always lured international companies to invest in various projects.

This has continuously given a head start to China’s economy and its stability in the international market.China has never failed to appear in the news when it comes to Foreign Direct Investment.

It becomes important for us to understand why despite all these restrictions, companies are still interested to invest in China instead of heading for other business-friendly industries.

For instance, every international must transfer its intellectual rights with China and set up a joint venture with a local firm.China became a member of the World Trade Organization in 2001 and since then it has promised to open up its telecommunication and banking sectors for the rest of the countries.

However, companies like Facebook and Google are still banned in China’s market.

If you are a business house that is looking to invest in China by forming a new company or establishing your presence in China you need to be aware of the local legal processes and compliance.You need to know the following things that form the pillars of any legal norms while investing in China.Negotiating a contract in ChinaFor understanding contract negotiations in China you need to choose a perfect partner that can act as the negotiator.

Now the Chinese government has imposed various restrictions on this pertaining to the industry you are in.

you also need to ensure that it is a China-specific contract and that the norms are clearly mentioned within the contract.

Such things include the norms of starting a new business, or establishing a new branch or investing in China through joint ventures.There are basically two types of business contracts for investing in China that includes-NNN agreements-Their main aim is to prevent the confidentiality of the product or services of the foreign company so that the Chinese companies cannot compete on an undue advantage against you.OEM agreementsThis agreement is one of the must-haves for choosing the Chinese company that you are investing in or forming a joint venture with.Getting Chinese trademarks and licensesYou need to get your brand logo and/or brand name registered with the Chinese authorities even though you are not going to sell your product in China.

This might come as a bit of a too much stringent rule especially if you are a foreign company looking to invest in China.Noting down the recent changes in Chinese foreign investment lawsThe Chinese government has recently come up with some new laws for the foreign inflow of funds that make it easier for foreign companies to invest in China.

But along with the new process is very stringent and process-oriented and has lots of scrutiny measures in it.Some of the vital changes are-Prior reporting of investment for the approval You need to gain approval from the Chinese authorities before investing in China and the same has to be documented in a report for getting approval from the Chinese foreign ministry board.Check if you are blacklistedThere are certain groups of industries that are barred from making foreign investments in China.

Most startup companies don't have enough capital, to begin with, and struggle to remain open.

They search for outside investor support until they can achieve profitability.

If you are the owner of a small business, then you should know that getting your company funding is one of the most difficult phases a business can face.Seeking this venture capital is an increasingly growing trend fueled by a combination of various factors, such as improvement in the IPO market, abundant entrepreneurial talent, promising new technologies, and government policies favoring venture capital formation.Venture capital investments give you and your company the resources it needs to grow to its full potential since it is used for a variety of things.

For example, you can invest in top-notch talent, new machinery; manual laborers or you may need to invest in research or new technology.China is a developing and transitioning country, its venture capital market consists of some special characteristics.China's venture capital practices, relying on various sources of capital, have undergone a difficult process of development.a) Serious information asymmetryb) Serious exclusionismc) High cost of investmentIn China company demand a majority holding in cooperation with venture capital firms on the belief that one will lose control over the company without majority holding or a leadership role in the company.China lacks an infrastructure of service professionals that offer proper services to the venture capital community to support venture capital firmsThe legal framework for venture capital investments is unequalThe Chinese capital markets provides poor exit channels for venture capital investmentsIPO Pang is one of the leading and most reputable companies in China that have more than 30 years of experience and our firm has been the “go-to firm” when the entrepreneurs and multinational companies need their business legal matters in China.

Our team of highly trained and experienced lawyers handles each and every case properly, efficiently, and with practical wisdom that comes from their many years of experience and expertise.At IPO Pang, we treat each and every Endeavour with utmost dignity and integrity and greets all the problems with imagination and innovation.

Our team of experienced and professional lawyers does not sell time, we sell solutions with our innovative legal solutions, zealous representation, aggressive courtroom tactics, and creative business structures that made us as one of the top International boutique firms with exceptional capabilities and operations in ChinaFor more information and to know more about IPO Pang or more please call us at (+86) 21 3382 1918 or visit our website HERE; https://ipopang.com/To know more, you can visit here: Corporate Governance In China 

China enjoys its world’s second-largest economy and is continuously developing at a rapid rate.

Domestic consumption in China is expanding at a tremendous rate as the population in China has crossed the mark of 1.4 billion.

With such a huge consumer market, it lures investors from other countries and offers them a market that comes with never-ending demand.However, there are various legal aspects when it comes to doing business in China.

International companies planning to set their business in China have to deal with various legal factors that affect their business and operating activities.

Here are some of the legal factors in China that affect international companies.Form of RepresentationIf you are a U.S citizen and want to establish a business in China, you must fill up a Form of Representation before setting up a distribution channel.

However, taking help from local bodies, in that case, might help you.

There are a few things you got to know about worker’s rights in China in case you are going to work as a foreign national in the largest Asian country.What are these facts we will get to know them but all of these revolve around the basic labor laws enacted by the Chinese government?

If you are going to China or willing to work as an employee with a Chinese firm staying in China you should be aware of these basic worker’s rights.Here are the 5 most important facts that you need to know about worker’s rights in China-What about the annual leave?If there is anything that comes to your mind it is probably the working holidays or the annual leave that you get.

See, in China, the amount of annual leave that you get varies from one employee to the other depending on the employee’s service period.The more senior or the more years he/she has worked the more the number of annual leave days the employee is entitled to.How many public holidays do you get?The Chinese New Year is one of the largely celebrated festivals in China.

Apart from this, there are other public holidays too.

Any organization whether public or private has to abide by these public holidays.

If the organization is willing to keep its staff force working even on public holidays it has to give a premium wage to its employees for that day.Per week how many hours of work is mandatory?The Chinese labor laws clearly state that the maximum number of hours an employee is allowed to work is 40 hours per week that averages to eight hours a day working for five days a week.Even if there is overtime it cannot exceed more than one hour a day unless there is a high emergency work that has to be completed.

It has a lot of opportunities opened up from time and again for foreign companies to invest and start their businesses in the Chinese uptown cities.However, the same isn’t easy enough for foreign companies, knowing nothing about the country's legal laws and current issues.

Thus, follow the tips we mention below for a smooth transition and set off your businesses with Chinese investors.Set up your company’s goals and vision for Chinese franchise with the IPO Pang’s consultantsYour firm might have a variation vision and mission when it’s operating in the host country.

However, it would have to change when you open its franchisee or a whole new business in China.That being said, the IPO Pang consultants are experts in giving you an accurate assessment of your company’s goals and vision in China.

They keep the laws and regulations in line so that you are never too overwhelmed or out of space.Know the practices you want to open up and follow in ChinaMost of the methods that IPO Pang lawyers help you with include the licensing, permissions, intellectual property right businesses, advertisement and marketing, joint ventures, direct foreign investment, and much more.So, you must know what your calibre is in these fields.

Know your resources and funding as well before setting up a legal or corporate firm in China.

The IPO Pang’s lawyers will help you in every step of the legal and regulatory compliance.Get familiar with the local regulatory compliance and audit workOpen companies to go here for years.

Chinese ODI (outbound foreign direct investments) have grown very swiftly in the last few decades, and China is now the 0.33-largest overseas direct investor in the world as the OECD (2014), behind the Japan and United States.

But, Chinese Outbound Foreign Direct Investments is an incredibly new phenomenon, thus its inventory of ODI globally turned into small in comparison to different important economies i.e.

China 2.3%, Japan 4.5%, US 22%.

Fast Outbound Foreign Direct Investments growth quotes – which might be set to continue – must growth this proportion pretty quickly.This fashion has already started to drawn massive attention from Chinese and foreign policymakers alike.

As per the MOFCOM (Ministry of Commerce of the People’s Republic of China), China’s ODI may have surpassed inbound FDI (foreign direct investment) for the first time.China has not been a net creditor pretty but; however, this is certain to change very swiftly.

Despite data limitations which may additionally overstate the general quantity of Chinese ODI, it is undoubtedly that Chinese Outbound Foreign Direct Investment has been growing in no time, specifically for the reason that China’s ODI shares in the globe continue to be underrepresented relative to the nation's size.

Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses having the potential of long-term growth.

Venture capital generally comes from well-off investors, investment banks and any other financial institutions.Venture capital in China is an important part of financing.

Chinese start-ups account for a large percent of the world’s venture capital funding.

More recently the thriving of venture capital (VC) inflow to developing nations to finance the start-ups and growth companies in those emerging economies.Venture capital does not always take a monetary form; it can also be provided in the form of technical or managerial expertise.

You will agree that venture capital is typically allocated to small companies with exceptional growth potential, or to companies that have grown quickly and appear poised to continue to expand.Venture capital can be risky for investors who put up funds however the potential for above-average returns is an attractive payoff.

For new companies or ventures that have a limited operating past venture capital investment is increasingly becoming a popular.

Taking a franchise in China is somehow challenging since you are unaware of its marketing conditions and obligations to start it.

Let’s highlight the prominent names of franchises in China and have been doing fruitful business before discussing the challenges.Business service franchisesSir Speedy, Inc. and Alpha Graphics, Inc. started getting into China in the 1990s because the demand from foreign businesses in China hiked.

Besides, Howard Johnson International, Inc., Super 8 Motels, Inc., China include Hilton Worldwide, Inc., Sheraton Hotels & Resorts, etc.

Some prominent hotel brands in the US have franchises in China and do business with these franchises.Customer service franchisesHomeownership swiftly raised in China, especially in two and three-tier cities, thus real property firms like Century 21 Real Estate LLC, etc., have launched franchises.

Besides, The Crestcom International, LLC management education franchise, opened to educate teens about managerial skills, entered a few years in the past.

McDonald’s had also started its business in China in 1990 and, just like the aforementioned, executed outside of the franchise model.

Are you planning to start a business in China and be successful?

If yes is your answer then you need to know that starting a business in China is a big feat in itself and also a daunting task.

There are a lot of factors that you need to consider and there will be a different set of business laws in China that everyone must follow to have smooth business sailing operations in one of the world’s most leading business country.

Aside from business operations, you will be required quite a time and financial investment to be able to get to a level where your company or business can operate.

There are a lot of things that you need to you know before you go out and set up a business in China without being stressed with all the technical details.If you are someone who wants to start a business in China but still on fence deciding how to start?

In this article, we are going to discuss mainly on the list about the things that one need to know when starting a business in China.