China Business Blog
What Requirements Do I Need to Transfer Trademark Rights in China?
Target Audience: Would you like to transfer your China trademark rights to a new owner? This article will introduce the required documents and the timeline when transferring your registered trademark rights. The trademark original owner is known as the assignor, while the assignee refers to the one who accepts the trademark. Transferring of trademarks shall…
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China Lawsuits: How to freeze assets of a Chinese Company
If you have unresolved issues with your business partner in China and are planning to file a lawsuit, you should seriously think about using the court system to freeze the assets of the target company (before they have a chance to disappear)! Dispute Resolution: What are the options? Jump right to litigation? Unless you are…
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PPE Parts 5 & 6: Can you make money importing PPE? How to ensure the products make it from the nearest port to the final destination?
PPE Parts 5 & 6: Can you make money importing PPE? How to ensure the products make it from the port to your inland destination point? Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. A growing number of people are looking into buying PPE from China for supply as the world scrambles…
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PPE Part 4: Can you import Chinese made PPE into your county?
PPE Part 4: Can you import Chinese made PPE into your country? Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. A growing number of people are looking into buying PPE from China for supply as the world scrambles to source equipment during the Covid-19 pandemic. Can you import Chinese made PPE into…
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PPE Part 3: Does the Chinese seller actually have the ability to export the PPE out of China?
PPE Part 3: Does the Chinese seller actually have the ability to export the PPE out of China? Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. A growing number of people are looking into buying PPE from China for supply as the world scrambles to source equipment during the Covid-19 pandemic. Confirm…
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Question: Will China suppliers exploit the Force Majeure clause during the Covid-19 pandemic?
Note: This article was written in the middle of the Covid-19 pandemic of 2020, however the topics covered are relevant for any readers wishing to understand how a Force Majeure clause works in China. Why I am worried about a Force Majeure clause in Chinese contracts Besides the obvious concern for the human costs if…
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PPE Part 2: How to confirm supplier can actually make the PPE you want to buy.
PPE Part 2: How to confirm if the supplier can actually make the PPE you want to buy. Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. Looking into buying PPE equipment from China during the Covid-19 pandemic. Confirm that your supplier can actually make the PPE. Perform your due diligence to ensure…
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PPE Part 1: The dangers of buying PPE from “your guy’s” “China guy”
Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. A growing number of people are looking into buying PPE from China for supply as the world scrambles to source equipment during the Covid-19 pandemic. Introduction to our series on buying PPE from China during the Covid-19 pandemic. A growing number of buyers are…
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Dangers of not being formal with your China supplier contracts
Dangers of not being formal with your China supplier contracts when sourcing during the Covid-19 pandemic I received an interesting question from a reader of my blog. I hope my answer will encourage you to be careful with your China supplier contracts. Question: Mike, My friend put me in touch with a supplier than can…
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VAT Leak in China Manufacturing: Planning for Value Added Tax Rebate
“VAT leak” is an informal term used by different people to mean different things. China’s Value Added Tax (VAT) and Rebate system is complex and can be very confusing. In an earlier post on the Chinese Value Added Tax (VAT) system we raised the subject of a “VAT Leak” and talked about the need to…
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Coronavirus & VAT in 2020: “In times like these…” Mark Twain answers
“In times like these, it is important to remember there have always been times like these”. – Mark Twain China Sourcing, Coronavirus & Value Added Tax (VAT) in 2020 In this blog post, we will answer the following questions: Why is it important to understand the VAT system in China if you source made-in-China products?…
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VAT Rebates: Negotiating power tool of China’s Value Added Tax System
VAT Rebates: Negotiating power tool of China’s Value Added Tax System If you are buying from China, understanding the basics of how the VAT system works is a strategic imperative. What are the dangers of buying direct from the factory (ExW). Buying in China? Complexities of the Value Added Tax System China’s Value Added Tax…
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Coronavirus: Alarms & Opportunity for China Sourcing; Wuhan aftermath!
The Coronavirus appears to have slowed down significantly with factories and the manufacturing infrastructure coming back online. Cautious optimism post Coronavirus. In today’s blog post, I’d like to look at the Coronavirus in terms of its impact specifically on the China sourcing industry. For example, if you are importing products that are made in China,…
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China Trends (Part 2): How to spot the red flags of good relationships going bad before it is too late.
China Trends (Part 2): Increase chance your “good supplier” will turn bad in the next 12 months. Learn how to spot the red flags before it is too late. Red Flag Assessment: Want to make sure you are safe? China Trends (Part 2): Increase chance your “good supplier” will turn bad in the next 12…
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China Trends (Part 1): How to verify the supplier is stable? Prudent planning; good relationships at risk of going bad.
How to verify the supplier is stable? Good relationships at risk of going bad. Corporate Assessment: When to conduct due diligence on a Chinese company? China Trends (Part 1): Increased chance your “good supplier” will turn bad in the next 12 months. How to verify if the supplier is stable or not? Why now? Why…
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Learn how to monitor your intellectual property rights in China
Learn how to monitor your intellectual property rights in China! Build a mechanism to monitor your intellectual property in China. In an earlier blog post “Trade War Strategies: Preventing your suppliers from violating your patents” we covered how to set up multiple layers of patent protection with the focus on the first layer- registering your Intellectual…
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Trade War Strategies: Are you at risk of your suppliers violating your patents? Raising the alarm to protect your patents!
With the China-US trade war lingering. Your supplier may be about to jump into bed with your competitors. Strategies to protect your patents! With the China-US trade war lingering. Your supplier may be about to jump into bed with your competitors. Strategies to protect your patents! As the China-US trade war drags on with no…
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Using bilingual contracts to protect your interests in China
Using China bilingual contracts to protect your interests-even during a trade war! An effective & affordable tool to enforce quality, price & lead time. Top 10 lessons for Supplier Contracts- learned the hard way during 20 years in China Introduction: In an earlier blog post “Trade War Strategies: Preventing your suppliers from violating your patents” we…
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Due Diligence in China: Essential questions to ask
In general terms, “Due Diligence” is an investigation of a business, individual or deal to establish facts, evaluate potential and identify risk. In general terms, “Due Diligence” is an investigation of a business, individual or deal to establish facts, evaluate potential and identify risk. Introduction/ Target Audience Early in my China business career I was…
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How a Business Advisor can complement Legal Counsel
Having both a local Chinese Lawyer and an International Business Advisor can complement your Legal team to not only save you money, but also offer deeper insight than hiring just one or the other. Force Majeure – a clause found in a contract to remove liability for natural and unavoidable catastrophes. Having both a local…
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5 Essential Questions on Trademarks Protecting your Intellectual Property IP
Concise answers to 5 strategic questions about Trademarks Protecting your Intellectual Property. Additional links provided with info on Trademarks in China.
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Copyrights in China: Protecting your Intellectual Property (IP)
Copyright Strategy: China IS different Lawyers and businesspeople lacking China experience will tell you that since copyright is automatically granted when you create something original you need not worry about it in China. Those with deep China business experience paint a very different picture.
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Can Patents be Cancelled for Non-use in China and When is a “Compulsory License” Granted?
If you are researching can Patents be cancelled for non-use in China and when is a “compulsory license” granted? If yes, click here to learn more … If you are researching can Patents be cancelled for non-use in China and when is a “compulsory license” granted? If yes, click here to learn more … The…
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Trademarks in China: How to Avoid “Non-Use Cancellation”
If your trademark has just been approved by the CTMO recently or planning to file in China. Learn more on how to avoid non use cancellation. If your trademark has just been approved by the CTMO (Chinese Trademark Office) recently or you are thinking to file for trademark registration yet. Then this blog is for…
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China Supplier Contracts & Negotiations: PO vs Contract vs NDA – Part 1
Are you researching how to set up a China Supplier Contracts? If so, read more to learn useful tips in your dealings with Chinese entities. Are you researching how to set up a China Supplier Contracts? Looking for strategies for the negotiations? In this article, I’d like to share some of the best practices and…
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How To Deal With Suppliers About Defective Goods and Partial Shipment?
Are you looking for tips on how to deal with suppliers? If you are asking the same question, then this blog is for you! There are 3 types of verification services that we need to consider if you doubt the reliability of the company. These type of due diligence are very affordable and effective when doing business…
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HK and PRC Business Formation: Holding Companies, WOFE’s, Offshoring and Other Key Issues
Common Question: I am setting up a HK LLC because I hear I can operate tax free, do I need to file my taxes each year in HK? I’m also thinking of setting up a company in China to help w sourcing. At what volume does it make sense to set up my own company…
Read MoreHow to select a lawyer when doing business in China: Part 1
Introduction to how to select a lawyer when doing business in China Are you planning to invest in China? Are you buying from China? Wanna sell to China? Regardless which group you fall into, you probably already realize that there are major differences between the legal system in China and back home. To emphasize this…
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Important Business Decisions: Using a Lawyer from China vs Hometown Lawyer
Are you considering whether or not to use a Lawyer From China or one from home? A good Chinese lawyer with experience negotiating contracts with suppliers would know what terms to put into the contract to protect the buyer and not give the supplier a chance to send defects. But most lawyers outside of China would…
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Dispute Resolution in China: Tips for working with the BBB, Police & Embassy
If you are doing business with China, at some point you will have a dispute. Regardless of who is at fault, how it started or if it is large or small, it’s good to know your options. We wrote this blog post to help you explore the options. And if you happen to be asking…
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Do I Have Coverage in China if I Register My IP Via WIPO/ Madrid System?
Do I Have Coverage in China if I Register My IP Via WIPO/ Madrid System? Have you found yourself wondering if you have coverage in China if you register your IP via WIPO/ Madrid System? If so, read below what each is and how they work. Background on WIPO and Madrid System: (Coverage in China) The…
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Penalty Clauses: Do they work when sourcing from China?
Need more info on Penalty Clauses while sourcing from China? Click here to do your due diligence on using penalty clauses while sourcing from China. Need more info on Penalty Clauses while sourcing from China? Read more to do your due diligence on using penalty clauses while sourcing from China. In today’s blog: we’ll answer…
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Managing Quality When Sourcing From China: Tips & Best Practices
Are you looking at the best ways in managing quality when sourcing from China? Read some of our tips and best practices… Are you looking at the best ways in managing quality when sourcing from China? Read some of our tips and best practices… Can high-quality affordable goods be “Made in China”? We have all…
Read More China Sourcing: What Are Reasonable Payment Terms?
Negotiating Payment Terms: Medium Sized Orders The following blog post is to give some tips if you find yourself negotiating reasonable payment terms for the first time with a supplier. The target audience are buyers who are purchasing between 10K USD and 100K per given order. If you are larger, you may wish to explore…
Read More Q&A on China Sourcing and IP at the Australia International Sourcing Fair
For the past few years, I have had the pleasure of being invited to Australia to speak at the International Sourcing Expo in Melbourne and Sydney. You can find information on the Australia International Sourcing Fair and seminars (past, present and future at http://www.internationalsourcingexpo.com/seminars/. Sourcing in Asia Today at the Australia International Sourcing Fair My…
Read More How to Do Due Diligence on Chinese Suppliers?
Often I’m asked about how to do due diligence on Chinese Suppliers and how to be sure it’s safe to do business in China. Some of the short questions I’m asked are things like: How do I know if it is it safe to do business with this supplier? Are there ways to tell if…
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How To NOT Get Knocked Off When Sourcing From China
Do you want to learn How To NOT Get Knocked Off When Sourcing From China? If you are asking these kinds of questions, this article is for you! I got a great idea, but I worry that it will get knocked off by the factory? I’m not sure if I should file the patent first…
Read More Foreigner Registering Intellectual Property in China (IP)?
Here is a short Q&A for a very common question about foreigners registering Intellectual Property (IP) in China With regards to the certificate of incorporation, can the company holding the IP rights in question be registered in the UK? Otherwise, what options do we have? The applicant for the IP in China could be…
Read More If the black and white logo is registered. Is my IP protected in color?
Here is a short Q&A for a question that gets asked sometimes regarding IP registration for logos. At this stage we are interested in registering the attached logo, as we are already pushing through a PCT application that will buy us a couple of years extra time. As the black and white logo is registered,…
Read More How to structure office hours in your Chinese company
Client writes in to ask about labor laws and how to set up the office hours for his Chinese staff. As this question gets asked a lot, here are some basic points for your reference: Just wondering if I could borrow your brains and experience and get some advice on a decision that’s been on…
Read More How to motivate a non-responsive supplier?
When is the best time to initiate a legal course of action? (motivate a non-responsive supplier) Below is a typical case for reference if you are considering legal action against a Chinese entity to motivate a non-responsive supplier. I am in the middle of collaborating with a Chinese company which is located in Dalian China. …
Read MoreIs it Legal & Safe to Hire a Freelancer in China?
Questions & Answers (Hire a Freelancer in China) Q: More and more websites (like oDesk.com, Elance.com Freelancer.com) in English and Chinese are connecting international business people w Chinese freelancers to project work on a part time and sometimes full time basis. What do the Chinese HR laws say about this? A: Technically, this transaction is not…
Read MoreWork With Your Chinese Attorney to Sue Your Supplier
Sometimes miring through a lawsuit, whether against a supplier or an ex-business partner, can be more painful than the events that gave rise to the dispute. Although favorable results can never be guaranteed, foreign clients can take comfort in the fact that retaining a Chinese-based firm is less taxing than one might imagine. A client’s…
Read More Starting a Business in China: How and Where to Start
Right now, small and medium sized entrepreneurs can operate in the P.R.C. more confidently than ever. The Chinese government has committed itself to the protection of foreign partners’ investments, profits and legal rights. These guarantees protect against nationalization and uncompensated takings. If you want to start a business (aside from merely setting up a representative…
Read More Why Should I Retain a Chinese Law Firm?
There are many benefits to hiring a Chinese law firm. Often times having boots on the ground is indispensable. Whether you are operating within Asia or abroad, it is always reassuring having someone on-site and ready to respond at first notice. Additionally, there are many procedures and functions that a foreign attorney, even with an…
Read More Hong Kong’s Legal System and the P.R.C.
“One China, two systems” In the United States, we tend to take for granted the Constitution’s Full Faith and Credit Clause. The concept is simple: any valid judgment issued by one state is fully enforceable in another state. Unfortunately, international civil litigation is not that simple and as a result the designated jurisdiction in your…
Read More What Information Do I Need To File My Trademark Application In China?
The notion that being there first somehow justifies ownership rights is a venerable and persistent one.” –Lawrence C. Becker, Property Rights: Philosophical Foundations (1977). Generally there are six requirements that the client must provide to the firm: Logo English text of the trademark Chinese text (characters) of the trademark Copy of the passport, if applicant…
Read More Trademark Longevity in the PRC
After a year and half, our client’s trademark was finally granted by the Trademark Office in Beijing. The client asked me: “Do you have any guidance on requirements for usage and requirements for ongoing maintenance?” Good question. It occurred to me that this is something important for people to know about, after they tried so…
Read More 4 Simple Ways to Protect yourself in the New Year
2014 is fresh and so the scams will be too. Make sure you’re prepared. Here’s four ways you can best protect yourself. Be sure to register your IP. China recognizes IP if it’s registered in China and not if it’s on the market or already registered in your home country. Find the right contract that…
Read More Purchase Agreements vs. Purchase Orders
More than once, when I review Purchase Agreements (PA) that buyers have already signed with his or her supplier, I’ve found that actually what he signed is a Purchase Order (PO). What are the differences between a PO and a PA? A Purchase Agreement is an agreement signed by both buyer and supplier focused mainly…
Read More 3 Protections Registering Your Trademark in China Will Grant You.
We all know we must register our trademark in China to get any legal protection. But what specific protection can be expected? According to the revised Trademark Law, there are three kinds in total: 1. Trademark. It’s not allowed to use the same or similar sign with a registered trademark in the same or similar…
Read More Is dealing with a Hong Kong company safer?
While discussing how to protect yourself against trade fraud, one of our clients said: “I prefer dealing with an HK company, it’s safer, at least.” However, among all frauds I’ve heard about, half of the victims sent money to an HK account. Safe or not depends on what kind of HK company it is. Typically…
Read More PRC Releases New Trademark Amendment, Violators Face Fines: ~500K USD
China’s top legislature– Standing Committee of the National People’s Congress (NPC) adopted an amendment to the Trademark Law which went into effect on 30th of August, 2013. The amendment, raises the compensation ceiling for trademark infringement to 3 million RMB (about 500,000 US dollars), six times the previous limit, it also includes clauses that will…
Read More Be Smart, not Sorry, when Drawing up Contracts
This morning, I spoke with a client. He said he needs a simple supply contract to use for his sourcing business in China. I sent him a checklist, so that he can let me know what he expects the contract to specify. He replied that he needed quick advice, he can’t sit and write all…
Read More Too good to be true, rings true, whether buying or selling in China
When I wrote blogs about protecting yourself while sourcing in China, I got a call from an overseas client who was trying to sell his wine to China. He told me he would fly to China to sign a contract with his buyer. The Chinese buyer approached the company and asked to buy seven containers…
Read More Choosing Your Business Vehicle: Wholly Foreign Owned Enterprises
Wholly Foreign Owned Enterprises (WFOE) usually take the form of limited liability companies and the liability of the foreign investor in respect of the WFOE is limited to the amount of capital it agrees to contribute. The risk of proceeding with a WFOE structure is that a foreign investor will not have the assistance of…
Read More Don’t Be Fooled By a Local Partner
Doing business in China is not easy. However, a local partner may help you navigate the Chinese business landscape easier. With a good partner you won’t have to worry about most of the headaches that come with the climate. A local partner can help you understand the law of the land, Chinese culture, especially with potential clients…
Read More Are Bilingual Contracts Necessary?
After our presentation regarding the importance of bilingual contracts at the Hong Kong sourcing fair hosted by Global Sources, some clients wrote me asking more about bilingual contracts. A few clients wanted to know, “Do you really think Bilingual contracts are necessary?” I understand clients’ concerns. We’re dealing with China; if something goes wrong, many clients…
Read More Buyers Beware –Double Diligence
Fraud can always accompany business; only sometimes does it actually reveal itself. We say, double your diligence before you pay. A couple days ago, a buyer voiced a complaint to me. The buyer told me that their supplier received payment for goods. However, the supplier denied receiving the deposit and refused to deliver the goods…
Read More How to protect your IPR while doing business in China
One of my clients asked me a question, which I believe is a common concern: “How can we protect our IPR effectively in China?” The following was my answer: 1. First of all, register your IPR in China, ASAP. All IP laws & regulations in China are based on the protection for legitimate registered IPR. …
Read More How Much Tax Do You Have to Pay?
After a long long discussion, Law of the PRC on Individual Income Tax (“IIT Law”) has finally been promulgated at June 30, 2011 and can answer your question of “How Much Tax Do You Have to Pay?”. According to the law, two types of expats should pay IIT: For expats who stayed within the territory…
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