Daily Operations & Compliance

The 2024 Company Law (effective 1 July 2024) significantly expanded the duties and liabilities of directors, supervisors, and — critically — the legal representative. It tightened rules on capital contribution timelines, added new requirements around related-party transactions and board procedures, and made it easier to pierce the corporate veil. A governance structure that was adequate under the old law may no longer protect your directors and officers.

We advise on board and shareholder meeting procedures, legal-representative authority and liability, and the uniquely Chinese issue of company chops (公章 / 法人章 / 财务章). Chops are not just stamps; in China they are the functional equivalent of the company's signature. We design dual-custody protocols and manage disputes when a departing legal representative refuses to surrender the chops — one of the most common internal-crisis scenarios we handle.

PRC labor law is famously employee-protective. Unilateral termination is permitted only on exhaustive statutory grounds, and employers lose roughly 70% of contested termination cases in arbitration. Wrongful dismissal results in reinstatement or double statutory severance. Non-compete obligations are enforceable only if the employer pays monthly compensation during the restricted period — a requirement many foreign employers miss.

We draft employment contracts, employee handbooks, and confidentiality / IP-assignment agreements compliant with the Labor Contract Law, and advise on expatriate work permits and residence visas, social-insurance obligations, overtime and working-hours rules, performance management, and lawful reductions in force (经济性裁员).

China's tax regime combines a 25% corporate income tax (15% for qualifying high-tech enterprises) with a VAT system, withholding tax on cross-border payments (dividends, interest, royalties, service fees), and an active transfer-pricing enforcement environment. Cross-border intercompany transactions face scrutiny from both the tax authorities and, on the FX side, SAFE.

We advise on the application of Double Taxation Agreements, transfer-pricing documentation and advance pricing arrangements (APAs), and the interface between your global tax structure and Chinese rules on related-party transactions — so your China operation does not quietly accumulate exposure to adjustment, interest, and penalties.

China's capital account remains controlled, and SAFE's rules govern how money moves in and out. Profit repatriation is permitted but procedural: it requires audited financials and a tax-clearance certificate, and in practice you should budget three to six months. Capital injections, capital-account settlements, foreign-debt registration and quota, and cross-border guarantees all carry their own registration and compliance steps.

For multinational groups we also structure cross-border cash pooling and intercompany financing within SAFE's frameworks, so treasury efficiency does not come at the cost of regulatory exposure.

China's Personal Information Protection Law (PIPL), together with the Data Security Law (DSL) and Cybersecurity Law (CSL), imposes obligations that parallel and in some respects exceed GDPR. The regime reaches any organization processing the personal information of individuals in China — regardless of where the processor is located.

We handle data mapping and classification, privacy notices and consent mechanisms for customers and employees, data-processor agreements, and the three cross-border transfer routes — security assessment, the China Standard Contract, or certification — plus incident response. One of the most common violations we see is foreign companies silently uploading Chinese employee or customer data into a global system without a lawful transfer mechanism.

For companies moving goods across China's borders, we handle AEO (Authorized Economic Operator) certification for customs facilitation, tariff classification and customs-valuation disputes, and rules of origin — increasingly consequential as supply chains shift. For regulated products, we manage import licensing.

On the export side, China's Export Control Law and its dual-use-item control lists impose obligations that can surprise foreign subsidiaries: re-export controls, end-use and end-user requirements, and technology-transfer restrictions. We classify your products and technology and build compliance into your trade operations.

China's Advertising Law is strict on superlatives ("best," "No. 1," "national"), comparative claims, and sector-specific promotion rules — and penalties are substantial. The fastest-growing exposure, however, is in KOL/KOC (influencer) marketing and livestream e-commerce, where regulators have tightened rules on endorsements, disclosure, and advertising content.

We review marketing materials before launch, structure influencer and livestream agreements, and — because customer data collected through marketing platforms crosses borders — fold a PIPL dimension into your marketing compliance.

Manufacturing and industrial operations face environmental impact assessment (EIA) and discharge-permitting requirements, plus strict workplace safety obligations. Meanwhile, ESG reporting requirements increasingly flow from global headquarters down to Chinese subsidiaries — including supply-chain due diligence on forced labor and environmental practices, and participation in carbon emission trading.

We help you map your China operations against these obligations, respond to enforcement, and prepare the subsidiary-level reporting your global team needs without creating new liability in the process.