We discuss how to avoid potential risks and disputes when signing a property lease agreement in China and key points that companies can manage better.
A lease agreement, to some extent, is a “must-have” agreement for all companies, unless they own real estate properties that are qualified for commercial use by themselves.
A company should at least rent a space, even if it is very small or shared with others, basically for the purpose of having it registered as its official address, and subsequently use it as a valid address to receive mails and notices from commercial partners as well as governmental authorities.
The lease agreement will “live” with the company until the company relocates to another place or till it is deregistered.
Therefore, whether the lease agreement is concluded properly or not will have significant impact on a company’s operation for its whole life.
WEBINAR – How to Achieve Favorable Terms When Signing A Lease Agreement for Your China Business (March 24, 2022, 2022)
4:00 PM China Time | 3:00 PM Vietnam | 9:00 AM CET
In this webinar, our Senior Business Advisory Associate Mr. Richie He from Dezan Shira & Associates’ Guangzhou Office will explain the major aspects companies should pay attention to when signing a lease agreement in China, and how they can mitigate against and avoid the traps and risks.
This webinar is FREE of charge.
To avoid potential risks and disputes, this article summarizes the major aspects companies should pay attention when signing a lease agreement in China, as illustrated in the table below.
In this article, the terms have the meaning as defined below:
In addition to the above attention points, it is more important that you have a bargaining ground to start up the negotiation with the Lessor. In most cases, Lessors are hard and may refuse negotiating. The scenarios in our experience where a Lessor is willing to negotiate include:
Negotiating with the Lessor in China can be difficult. We hope this article informs you of some of the traps and risks associated with signing a lease agreement, and how to mitigate against those risks or avoid them.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at email@example.com.
We also maintain offices assisting foreign investors in Vietnam, Indonesia, Singapore, The Philippines, Malaysia, Thailand, United States, and Italy, in addition to our practices in India and Russia and our trade research facilities along the Belt & Road Initiative.
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