By Dezan Shira & Associates
Editor: Jake Liddle
Apple has recently been involved in a few IP infringement cases in China that it has lost. Earlier this month, there was a case where sales of all models in Apple’s iPhone 6 series were to be suspended by the Beijing Municipal Bureau of Intellectual Properties due to alleged infringement of appearance design patent of Shenzhen Baili’s 100C model mobile phone. Earlier this year, Apple lost a trademark case with a Beijing company, Xintong Tiandi, a leather goods firm which used the word ‘IPHONE’ on leather wallets. Some foreign companies are still under the assumption that because they have registered their trademark in the country of origin, it will be protected in China. This is not the case. China’s State Administration for Industry and Commerce (AIC) does not recognize trademark registrations overseas.
Asia Briefing has just made three popular, out of print books by Chris Devonshire-Ellis available for complimentary download. Chris, who has written numerous technical guides on matters of China law and tax, and whose latest book on China’s One Belt One Road has received positive reviews, is one of the longest commentators on matters of China business and culture today.
The latest issue of China Briefing Magazine, titled “Understanding Mergers and Acquisitions in China“, is out now and available to subscribers as a complimentary download in the Asia Briefing Bookstore through the months of June and July.
- An Introduction to China’s M&A Market
- Anatomy of a Takeover: Conducting a Company Acquisition in China
- The Importance of Due Diligence in the M&A Process
By Maria Kotova and Allan Xu, Dezan Shira & Associates
Editor: Jake Liddle
When an entity starts to expand and it is no longer advantageous to operate a Representative Office (RO), a company may look to establish a Wholly Foreign-Owned Enterprise (WFOE) in China. Timing is key to a smooth employee transfer from an RO to a WFOE (target company), as explored here. However, equally important are the provisions and considerations an entity must take before making an official announcement to employees in order to avoid unnecessary legal disputes with current employees during the process. Here, we provide suggestions and tips for handling employee transfer during the RO-WFOE conversion, and guide the investors through the preparation steps prior to terminating the employees.
Foreign Invested Enterprises Not Permitted to Engage in Tobacco Wholesale and Retail Business
The Ministry of Industry and Information Technology (MIIT) has recently issued regulations regarding retail of tobacco products in China. The new regulations stipulate that foreign invested commercial enterprises or individual business households are not permitted to engage in tobacco wholesale or retail business, nor engage in trading of tobacco monopoly products in alternative forms such as franchise, absorption of franchise stores or other re-investment, etc. The Measures for Administration of the Tobacco Monopoly License and Measures for Administration of Shipment Permit of Tobacco Monopoly Products will both become effective as of July 20, 2016.
With China experiencing something of a slowdown, and many previously active China business bloggers now having moved onto other things, the current pool of available, complimentary China updates by people with their feet on the ground has become smaller. However, here are what are probably the best independent blogs for businesses interested, or operating a business, in China.
I have only included blogs that have updated intelligence at a minimum on a weekly basis, as these candidates demonstrate the most commitment to their craft and by proxy have the most relevant content. Aggregators and mainstream media blogs have also been excluded, as we wish to reflect professional expertise, not journalism, in terms of content creation. Please add comments at the end if you feel we missed anyone out.
By Dezan Shira & Associates
Editor: Mia Yiqiao Jing
The finalization of value-added tax (VAT) reform on May 1, 2016 was China’s biggest tax overhaul within the last 20 years. Changes include the tax rate on business activities conducted by representative offices (ROs) in China, which has been reduced from five percent to three percent. The reduced tax liability on ROs may cause foreign investors to completely restructure their business practices to capitalize on the benefits of the reform. Currently, there is no written regulation on the applicable tax rates or tax payment methods for ROs. Taxpayers must contact the tax bureau in charge prior to filing taxes. In this article, we provide a brief introduction to China’s taxation rules on ROs, and look at the potential impact of the VAT reform on ROs’ tax structure.
By Alexander Chipman Koty
In March this year, China and Israel officially launched discussions for a long-rumored free trade agreement (FTA), reflecting the budding rapport between the two nations. As China and Israel become progressively more politically isolated due to their assertive geopolitical policies, the two controversial states are growing their economic and political ties closer together. Israel’s traditional economic and political partners in the U.S. and Western Europe are becoming increasingly critical of their longtime Middle Eastern ally, while China’s aggressions in the South China Sea are unnerving Pacific countries wary of the Middle Kingdom’s rise.
In light of these political realities, China and Israel are finding each other to be convenient collaborators as they seek to diversify their economic dependence and profit from each other’s comparative advantages. Israel, with its small population of about eight and a half million and world class high-tech capabilities, and China, with its immense population, manufacturing prowess, and huge capital waiting to be spent, are naturally complementary economies. Despite presenting rapidly expanding bilateral trade and investment opportunities, however, sometimes divergent political interests and persistent concerns over IP protection prevent the countries from fully embracing their burgeoning friendship.