Compliance in China

Foreign investors interested in setting up a company in China should respect the compliance rules and regulations, as stated by the Chinese legislation. As the Chinese government introduced new laws and practices in terms of compliance, the management of the company should pay attention to all the legislative changes applied here. Compliance may refer to any aspect of the business, from taxation, to social security and hiring employees in the company or to anti-fraud measures; our law firm in China can provide you with assistance on this subject. 

 

 

China represents an attractive business location for Foreign Direct Investment (FDI), as now is one of the leading economies of the world. Foreign companies should respect the regulations stipulated by the Foreign Corrupt Practices Act (FCPA) and the Chinese legislation. 

 

As a general rule, compliance refers to the procedures a company must enforce in order to respect the local and international legislation available in a certain field of activity. The compliance procedures in China refer mostly to anti-corruption and anti-fraud legislation; they also refers to respecting the local legislation in terms of taxation and other duties a foreign company must fulfill.

 

In the last years, China implemented new regulations in this field, and companies which do not comply with the deadlines imposed for presenting certain documents or paying taxes, are now penalized for not meeting these demands; our Chinese lawyers can offer you further details on this matter. 

 

 

China has enforced the compliance legislation, which is stipulated by the Anti-Unfair Competition Law and the Chinese Criminal Law. The Anti-Unfair Competition Law provisions are prohibiting the unfair commercial relationship. 

 

Compliance in China should address to the following issues, in order to avoid the infringement of the local legislation:

 

• trainings offered to the management employees and executive employees, by following the rules and regulations stipulated by the FCPA law and Bribery Act;

• communicating the internal rules and policies followed by the company, as well as prescribing a certain code of conduct which should be respected by all employees;

• perform due diligence procedures on company’s partners and suppliers, in order to avoid possible liabilities of any kind.

 

Foreign investors should know that in China is customarily to offer gifts to local partners, which, in some cases, it may be misconstrued as a bribery method. 

 

If you need further information on the compliance in China, please contact our Chinese law firm.