How to Acquire Resident Permit in China Without A Job?
Exploring legal residence options for foreigners in China can be challenging without conventional pathways such as employment or family ties. However, establishing a company and applying for a work permit and residence permit presents a viable alternative.
By leveraging entrepreneurial endeavors, individuals can not only secure legal residency but also engage in business activities within China’s dynamic market. Collaboration with legal experts and thorough preparation are essential for meeting regulatory requirements successfully. Through strategic planning and adherence to relevant statutes, foreign individuals can realize their aspirations for long-term residency in China while contributing to its flourishing business environment.
Step 1: Register A Company
There are several notable advantages to applying for a visa through the establishment of one’s own company. Firstly, pursuing a visa in conjunction with company ownership offers a more pragmatic and rational approach, aligning one’s residency status directly with their entrepreneurial endeavors.
Secondly, the process of visa renewal is often streamlined and expedited for individuals who are registered business owners, facilitating smoother transitions and continuity of residency. Moreover, fulfilling certain predetermined criteria within the framework of business ownership can lead to eligibility for permanent residency status, providing a pathway to long-term settlement in the host country. You may have the following inquiries regarding the specifics of launching a company, such as
- Q1: Do expatriates need to be present during the process of starting a company? Can it be handled online?
Expatriates who possess a real-name certified cell phone number and bank card have the option to complete the process online.
- Q2: How long does it take for a foreigner to start a company in China?
Usually only about 2 weeks to register a company.
- Q3: Is it possible for a company to be established by a single individual?
The establishment of a company requires of three distinct roles:
Firstly, at least one shareholder, who may concurrently serve as the legal representative, is indispensable.
Additionally, a supervisor and an individual who is responsible for the financial matters of the company are imperative.
It is pivotal to note that the roles of supervisor and financial person must be held by distinct individuals, precluding the possibility of a single person occupying both positions. Furthermore, it is stipulated that the accountant person must not be a foreigner who cannot speak Chinese.
- Q4: Can we forgo the appointment of the supervisor?
Under the impending new”Company Law,” scheduled for implementation on July 1, 2024, a notable change pertains to the governance structure of limited liability companies with fewer shareholders.
Specifically, according to the revised provisions, smaller limited liability companies, characterized by a reduced number of shareholders, will have the option to forgo the appointment of a supervisor. This exemption is contingent upon unanimous consent among all shareholders.
- Q5: Is the registered capital required to be fully paid in at once?
According to the amended Company Law, effective from July 1, 2024, shareholders are mandated to fully pay up their contributed capital within five years from the company’s incorporation date, as stipulated in the company’s articles of association. This requirement replaces the previous provision under the current company law, wherein the payment of registered capital was not obligatory at the time of incorporation.
- Q6: What are the liabilities of shareholders?
Shareholders typically assume limited liability concerning the company’s debts, restricted to the extent of their subscribed capital contributions.
However, in cases where the sole shareholder limited liability company fails to demonstrate the autonomy of the company’s assets from the shareholder’s personal assets, the sole shareholder may be subject to joint and several liabilities for the company’s debts.
Consequently, we strongly advise registering a company with two or more shareholders to mitigate such risks and uphold prudent corporate governance.
- Q7: Do foreigners’ passports and other materials need to be notarized and certified?
In the company registration process, there is no requirement for notarizing or certifying passports or any other documentation. However, for the application of a work permit, it is mandatory to provide a non-criminal record and education certificate that have been notarized with apostille certification.
- Q8: Following the company’s successful registration, what additional tasks must be completed?
To establish your company effectively, several essential steps must be taken, including applying for an official seal, opening a company bank account, registering tax certificate, and engaging the services of an accountant to provide assistance with financial matters. These steps collectively ensure the smooth operation and compliance of your company with regulatory requirements.
Step 2: Apply for Work Permit
Upon successful registration of the company, individuals can proceed to apply for a work permit. It’s important to note that various categories of work permits entail distinct application requirements. Therefore, applicants should meticulously review and adhere to the specific prerequisites outlined for their respective work permit classifications.
- Q1: What type of work permit am I eligible to apply for?
In China, foreign workers are categorized primarily into three classifications:
Class A for high-end talents, Class B for professionals, and Class C for other talents. While a strict quota management system is commonly enforced for Class C individuals across most regions, the application process typically prioritizes Class A and B categories.
For Class A high-end talents, the option exists to apply for a work permit valid for up to five years, offering an extended period of employment eligibility.
Conversely, Class B professionals may apply for a work permit with a maximum duration of two years, providing flexibility within the regulatory framework for their employment arrangements.
- Q2: What’s the duration for work permit during the initial application, and is it possible to extend or renew afterward?
Under ordinary conditions, an initial period of six months is typically granted for the issuance of a work permit. However, in cases where the applicant exhibits high qualifications, an initial period of one year may be approved. Furthermore, renewal of the work permit can be sought up to 30 days before its expiration date, facilitating a smooth continuation of employment arrangements.
- Q3: What does the process entail when applying for a work permit?
When applying for a work permit from outside of China, the company initiates the process by submitting the application and relevant documents through the online Service System for Foreigners Working in China.
Subsequently, upon approval, the company receives the Notification Letter of Foreigner’s Work Permit. Foreign nationals utilize this notification letter to apply for a work visa in their respective country. Following the acquisition of the work visa and entry into China, individuals proceed to apply for the formal work permit.
- Q4: What is the typical timeframe required for completion?
The application process for the Notification Letter of Foreigner’s Work Permit typically involves a timeframe of approximately 5-10 business days for completion.
Similarly, the application for the formal work permit also requires a timeline of approximately 5-10 business days.
- Q5: Is it possible to apply for a work permit without possessing a bachelor’s degree or higher education, or evidence of relevant professional qualifications?
Certainly. As a shareholder in the company being registered, individuals have the opportunity to apply for a visa as an investor. Notably, this process does not necessitate the submission of additional documents such as diplomas, certificates, or employment contracts.
- Q6: Which documents are necessary for an investor’s application of work permit?
You need a copy of the original business license and other documents proving that you are an investor, passport, certificate of no criminal record and medical certificate.
- Q7: What are the drawbacks of seeking a work permit as an investor?
During the renewal process of a work permit, the entry and exit bureau conducts a comprehensive review to ensure the continued normal operation of the company and the ongoing status of the applicant as the company’s investor. The assessment of the company’s normal operation primarily focuses on the regular payment of Value Added Tax (VAT).
- Q9: What should an applicant do if uncertain whether the company will settle VAT within six months of the initial application?
We advise you to pursue the application for a work permit as an employee of your company. However, it’s important to note that the eligibility criteria typically require candidates to possess a bachelor’s degree or higher educational qualification, along with relevant work experience.
- Q10: Which documents are required when applying for a work permit as an employee?
The application for a work permit entails the submission of the following documents:
(1) Completed Application Form for Work Permit;
(2) Valid passport;
(3) Non-criminal record certificate;
(4) Certificate of highest academic qualification (bachelor’s degree or above) or other professional qualifications;
(5) Certificate of work experience covering the last two years;
(6) Employment contract;
(7) Medical certificate;
(8) Electronic photo;
(9) Original photo.
Step 3: Apply for Resident Permit
- Q1: Where can I apply for a residence permit? Can I apply online?
Residence permits are exclusively obtainable through in-person applications at the Immigration Office located within each district.
Unlike other processes, online applications are not available for residence permits, it requires applicants to submit their requests offline, in accordance with the prescribed procedures.
- Q2: What documents are required to apply for a work-related residence permit?
The essential documents are:
(1) original passport;
(2) work visa;
(3) temporary accommodation registration form;
(4) medical report;
(5) work permit;
(6) company application letter;
(7) individual application letter;
(8) company business license.
- Q3: What’s the typical duration taken to complete the process?
It normally can take up to 10 working days but in some cases two weeks.
- Q4: How long will I be granted for residence permit?
Normally the period will be the same with work permit
If you have any inquiries regarding the specifics of launching a company, please feel free to contact us.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
What You Can, And Can’t Say in Advertisement in China?
KEY TAKEAWAYS
- Chinese Advertising Law strictly prohibits the use of absolute superlatives such as “the best” “world-leading” to promote ethical and honest advertising practices.
- It is prohibited to publicized false or misleading advertising and misrepresented product benefits, to protect consumers from deceptive marketing practices.
- It’s a gross violation of the law to harm the state’s dignity or interests, public interests, hinder social stability, impede public order, violate social morality, infringe personal rights in advertising.
- The law prohibits discriminatory content based on ethnicity, race, religion, or sexual orientation in advertisements and aims to promote inclusivity and respect for diversity within society.
INTRODUCTION
The Advertising Law lays down precise guidelines for advertising material in China’s ever-changing advertising practice across the industry, outlawing any statements that are deceptive, untrue, or detrimental to society. Companies operating in China should familiarize themselves with the requirements of the law as there are severe penalties for non-compliance. In order for businesses to successfully traverse this intricate regulatory prospect, we’ll examine the essential elements of the Advertising Law in this article.
1. Overview of Prohibited Contents in Ads
In China’s Advertising Law, the following content are strictly prohibited to ensure ethical and honest advertising practices:
（1）Using Absolute Superlatives
Ads cannot include phrases like “the most, best, highest, top level, top-tier, top1, only, first, sales champion, world-leading, industry leader, forever, national level, world level, world premiere“, etc. which suggest unrivaled
（2）False and Exaggerated Advertising
While advertising often involves exaggeration, this rule targets claims that are demonstrably false.
Case1: False Discount Claims
Recent cases have exposed businesses falsely claiming product price reductions, despite never offering the items at full price. Such misleading price tactics in advertisements are considered false under the Advertising Law and the Provisions on Administrative Penalties for Price Violations, leading to penalties.
Case 2: The company advertised its Anti-Pylori Probiotic Flash-Release Tablets with misleading claims about preventing periodontal disease and inhibiting Streptococcus pyogenes adhesion. However, the product had no such effects, leading to a fine of 100,000 RMB from the market supervision division.
（3）Unauthorized Use of State Authority
Ads must not falsely claim endorsement by, or covertly use the names or images of, state authorities or officials.
For example, “only for ABC national authority” or “endorsed by ABC national leader or ABC national authority,” or using an officer’s name in the advertisement.
（4）Content Restriction
Ads cannot contain obscenity, pornography, gambling, superstition, terror, or violence.
For instance, an advertising that features an erotic suggestion or a description of the body, or one that talks about God’s favors or better fortune.
For instance, a business that used images of zombies and dead bones in their ticket advertisement was fined RMB 8,000.
（5）Offenses Against State Dignity or Interests
Advertisements must not harm the state’s dignity or interests, such as by using an incorrect map of China that omits key areas like Taiwan, the South China Sea islands, or the Diaoyu Islands.Besides, the term of “Former French Concession” is also not allowed in the advertising, as it relates to an area in contemporary China that was leased to France under treaties considered unequal. It transcends mere geographical and cultural descriptors, carrying with it a specific political and historical connotation. The use of this term, along with the implications it bears, is seen as derogatory and harmful to the state’s dignity and interests, breaching the stipulations of the Advertising Law.ShackShack Case: on October 22, 2021, ShackShack was fined RMB 200,000 for releasing a poster that featured the term “Former French Concession.” The reason given was that the term was perceived as demeaning and oppressive by those who had firsthand knowledge of colonial history, undermining the nation’s dignity.
（6）Misuse of National Symbols
The use or covertly use of the national flag, nationalanthem, national emblem, military flag, military anthem, or military emblem of the People’s Republic of China is forbidden.Example: a company was fined RMB 450,000 for hanging Chinese national flag with its company logo on it on its business premises.
（7）Impede Public Order or Violate Social Morality
（8）Hinder Social Stability and Harm Public Interest
Example: A real estate company was fined RMB 20,000 for an ad urging home purchases during COVID-19 to avoid quarantine measures. The ad was deemed to create fear among the homeless and incite housing concerns, harming social stability and public welfare.
（9）Endanger Personal and Property Safety, and Infringe upon Personal Privacy
（10）Discriminatory Content
（11）Environment and Culture Harm
（12）Infringe Rights and Interests of Others
2. Justifying Claims
If an advertiser disagrees with the penalties levied by the Market Supervisory Bureau, they have the option to present supporting evidence (such as awards, certificates, and data) to substantiate their claims.
Should the Market Supervisory Bureau maintain its stance on the penalties, the advertiser can request an administrative reconsideration from a higher-level authority within the Bureau or pursue an administrative lawsuit.
3. Legal Protections Against False Advertising
Various legal protections are available to consumers in response to the problem of deceptive advertising. One such precaution is the option to file a complaint with the Market Supervision Bureau through the website https://www.12315.cn/ or by calling 12315. The advertiser will face the consequences detailed in the sentences that follow if it is discovered that the advertisement is false.
In addition, a consumer has the right to sue the advertiser to recover damages if they believe the advertisement caused them bodily harm or property damage. They can also register a complaint with the Market Supervision Bureau.
4. Penalties for False Advertising
In accordance with Chinese Advertising law and regulation, offenders of fraudulent marketing face specific punishments. Upon discovery of fraudulent advertisements, the Market Supervision Bureau mandates the cessation of dissemination and removal of the advertisement’s influence within the appropriate scope. Offenders are fined three to five times the advertising fee; in cases where the fee is indeterminable or notably low, fines range from RMB 200,000 to RMB 1 million.
For more serious or repeated offenses exceeding three instances within a two-year period, fines escalate to five to ten times the advertising fee. If the fee is minimal or unascertainable, fines range from RMB 1 million to RMB 2 million. Additionally, the Bureau retains the authority to revoke the offender’s business license and advertisement review and approval document, with no acceptance of further advert review applications.
Feel free to contact us if you have more questions about restrictions of advertisement in China.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
Can Foreigners Purchase Property in China？
KEY TAKEAWAYS:
- To purchase property in Shanghai, Guangzhou and Shenzhen, foreign buyers must have worked in the city for at least one year, while Beijing, Hangzhou, Wuhan only requires the foreign buyer to work in the city without a time limit.
- The Nanjing, Suzhou governments have lifted restrictions on foreigners buying property in their city.
- Additionally, most cities require that the foreign buyers and his/her families do not own any other property in China.
- The property must meet certain requirements before it can be sold to a foreign buyer.
1. Qualifications of Shanghai
- The foreign buyer shall have signed the labor contract with a Shanghai company for a period of more than one year;
- Shall have continuously paid individual income tax or social security in Shanghai for at least one year (the foreigners with permanent resident ID card are exempt from this requirement)
- Possess a work visa or resident permit for work;
- The foreign buyer and his/her family must not own any other houses in China.
- The purchased house must be only for self-occupation.
- The foreigner buyer is limited to purchasing one house at most.
- For further information, please contact 021-962269.
2.Qualifications of Beijing
- Possession of work visa, journalist visa, or permanent resident ID card (regardless of the duration);
- Temporary accommodation registration form issued by the police station;
- Only one house can be purchased.
- Check whether your eligibility to buy a house in Beijing on the website of Beijing House Qualification Verification Platform(http://gfzg.zjw.beijing.gov.cn/login.aspx)
3. Qualifications of Guangzhou
- Employment contract or certificate from Guangzhou company that confirms your employment for at least one year;
- Resident Permit that is valid for at least one year;
- Work visa or work permit；
- The buyer and his/her family do not own any other houses in China.
- The purchased property is only for self-occupation.
4. Qualifications of Shenzhen
- Work permit which has been valid for more than one year, unless the foreigner holds a permanent resident ID card.
- The buyer and his/her family do not own any other houses in China.
- The purchased property is only for self-occupation.
- Only one house can be purchased.
5. Qualifications of Suzhou
- Suzhou government has lifted restrictions on foreigners buying houses in Suzhou starting in 2023. There are no other qualification requirements, such as work visa or social security, for foreigners to buy a house in Suzhou.
- However, foreigners are limited to purchasing a maximum of three houses, each less than 120㎡. There are no restrictions of quantity on houses larger than 120㎡.
6. Qualifications of Hangzhou
- Work or study in Hangzhou (no requirements for the period)
- Hold a resident permit in Hangzhou
- The buyer and his/her family do not own any other houses in China.
- Only one house can be purchased.
(2) For other districts
- No restrictions
7. Qualifications of Nanjing
Nanjing government has lifted restrictions on foreigners purchasing houses in Nanjing starting in 2023. There are no additional qualifications, such as work visa, purpose, amount.
8. Qualifications of Chengdu
- If the house is less than 144㎡ and located in the district of Tian fu, High-tech Zone South Park, Jinjiang, Qingyang, Jinniu, Wuhou, Chenghua
The buyer must have continuously paid social security for at least six months
- If the house is more than 144㎡ or located in districts other than those mentioned above.
No restrictions
9. Qualifications of Wuhan
- Work or study in Wuhan (no requirements for the period)
- Individuals are limited to purchasing only one house for self-occupation.
10. Requirements of the Property
Foreigners purchasing a new property must confirm that it has a valid permit to be sold to foreigners. If purchasing a secondary property, they must check if the transaction can be approved by the local National Security Bureau.
If you need any legal advice or legal service of purchasing real estate in China, please feel free to contact us.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
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How Can A Company Deal With Counterfeit Products in China?
Consumers and manufacturers are facing a growing problem of counterfeits in China. Counterfeits not only deceives consumers but also threaten brand manufactures. It leads to sales decrease, reputation damage, market chaos for brand manufactures. This article will offer some legal strategies for manufacturers to combat counterfeits and protect their own products.
1. Registering Trademark and Patent is The First Step
- Trademark
A trademark is a distinctive word, graphics, logo, letters, three-dimensional sign, numbers, color combinations and sounds that is used to identify a particular product or service and which serves to distinguish it from its competitors.
In China, trademarks are generally protected through registration, following an application filed with the Trademark Office of China National Intellectual Property Administration (Online Application Website: https://sbj.cnipa.gov.cn/sbj/wssq/).
Registration entitles the registrant to legally and exclusively own all the trademark rights, and to prevent anyone from using the trademark on the same or similar products without the registrant’s consent. Otherwise, the infringer will be liable for unauthorized use (compensation, penalties, etc).
- Patent
A patent is an exclusive right granted for an invention, utility model or appearance design. It refers to a new technical solution or a practical design for a product, process, or improvement thereof.
Same as trademark, registering a patent in the Patent Office of China National Intellectual Property Administration (Online Application Website: https://cponline.cnipa.gov.cn/), confers exclusive rights on the Patentee. In other words, once the patent granted, the Patentee can stop anyone from making, using, selling, offering for sell, or importing the product or technology in which the patents are held.
2. Preserving Evidence Will Give Your Company an Edge
When counterfeits are discovered on the market, the most urgent step is to preserve and notarize the evidence in order to avoid the infringer destroying the counterfeits before we take legal action.
In this case, you can buy the counterfeit products under the witness of a notary and with a video recording of the whole process, and keep the counterfeit product, contract or purchase order, invoice, payment slip. The final notarial certificate can be used as evidence.
3. Complaints to the Market Supervisory Administration are the Most Time-saving and Cost-effective Way
Market Supervisory Administration is the official authority that regulates protection and infringement of intellectual property. When counterfeits are found, anyone can report them to the local Market Supervisory Administration through the hotline number 12315 or the official website: https://www.12315.cn/ for complaints.
Once the infringement is recognized by the Market Supervisory Administration, the infringer will be required to immediately stop the infringements, destroy all counterfeits and pay a fine. In the case of a serious infringement, a criminal penalty (a fixed-term imprisonment) might also be imposed on the infringer.
4. Filing a Lawsuit is Also the Most effective Way
Irrespective of the penalty imposed on the infringer, it is vital for the brand manufacturer to make up for the loss of revenue and reputation resulting from the infringement. If the infringer refuses to pay any compensation, the brand manufacturer will have to file a lawsuit in Intellectual Property Court.
- How much compensation can the infringed party claim for?
(1) Either the actual losses suffered by the infringed party or the actual interests obtained by the infringer as a result of the infringement.
(2) If neither the actual losses nor interests can be determined, the compensation shall be the reasonable multiplier of the royalty of the trademark or patent.
(3) If the infringement is intentional and serious, the compensation may be determined at not less than double and not more than five times the amount determined in accordance with the above method.
(4) The compensation may also include reasonable expenses incurred in preventing infringements, such as notarization fee, certification fee, lawyer’s fee, investigation fee, translation fee, etc.
5. Other Simple Strategies for Counterfeits
- Complain to the e-commerce platform where the counterfeits are sold:
Many well-known e-commerce platforms have set up an intellectual property protection and complaint channel. The Intellectual Property Protection Platform of Alibaba is one of such channel, which aims to provide a channel for complaints and resolution of IP disputes.
- Adopt anti-counterfeiting measures:
In a nutshell, anti-counterfeiting is the application of covert or overt protection measures on packaging, authentication certificates, or directly on the products themselves. These measures often include technology to track, trace, and verify the authenticity of an item. With anti-counterfeiting measures in place, the consumers can distinguish the counterfeits and counterfeiters won’t be able to trick consumers into believing that items are authentic.
If you need more information about how to deal with the counterfeit products in China, please feel free to contact us.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
Find Out How Much a Lawsuit Will Cost in China ?
In most expats’ minds, going to court in China is a daunting prospect that costs a fortune. The actual fees, however, are far more transparent than you thought. Read on to understand how much it will exactly cost for filing a lawsuit in China.
1. Chinese Lawyer Fees Vs.Lawyer Fees in Europe and American
In most European and American countries, lawyer’s fees are charged on an hourly basis. As a result, this type of billing can lead to a lack of clarity in the total price, as the working hours always vary based on the workload, and extra work may be required when unforeseeable circumstances arise during the litigation. Moreover, the hourly rate is so high that the final lawyer’s fee will likely be higher than budgeted.
This is unlikely to happen in China where most local Chinese law firms charge fees mainly based on the claim amount rather than an hourly rate. As a matter of fact, most local governments will issue guiding prices for lawyer’s fees. In the case of Shanghai, the guiding standards of lawyer’s fees are as follows:
For cases involving property relations, the lawyer’s fees for one instance may be charged at a cumulative rate in segments according to the claim amount:
| Claim Amount | Rates for One Instance |
| For the portion of the claim amount up to and including CNY 100,000 | 8% to 12% of the total claim amount. However, if the claim amount is less than CNY 3,000, the lawyer’s fee will be at least CNY 3,000. |
| For the portion of the claim amount over CNY 100,000 up to and including CNY 1 million. | 5% to 7% for the portion of the claim amount |
| For the portion of the claim amount over CNY 1 million up to and including CNY 10 million. | 3% to 5% for the portion of the claim amount |
| For the portion of the claim amount over CNY 10 million up to and including CNY 100 million. | 1% to 3% for the portion of the claim amount |
| For the portion of the claim amount over CNY 100 million | 0.5% to 1% for the portion of the claim amount |
Here’s an example: Let’s say your landlord didn’t return your deposit on your really, really nice apartment, and the claim amount is 400,000 rmb. The lawyer’s fee for one instance would be calculated like this:
The first 100.000 Rmb are charged at 8%, that’s 8.000 Rmb.
The next 300.000 Rmb are charged at 5%, that’s 15.000 Rmb
Comes to a total of 23.000 Rmb.
However, those fees aren’t written in stone and a law firm might negotiate a different fee structure for cases with a high working load, for complex cases, or even based on the financial status of the client, the risks and liabilities that the lawyer and law firm might take, and the lawyer’s social reputation and working competence.
2. Lawyer’s Fees for Criminal Cases
Criminal cases usually don’t have a claim amount, so the calculation works differently. It goes by stages, and it’s a lot more up to the negotiation between you and the lawyer what fees you’ll settle on.
| For the criminal investigation stage: | 1,000-10,000 Rmb for each case |
| For the prosecution stage: | 2,000-10,000 Rmb for each case |
| The first instance stage: | 3,000-30,000 Rmb for each case |
Some lawyers may also choose to charge you by time. The range is huge and you might be quoted anything between 200 rmb and 3,000 rmb per hour. Better negotiate a fixed fee for each stage.
Lawyers may also have their own rates, which may be higher or lower than the above standards. But the above standard may also be used as a reference.
3. How Much are Court Fees?
In the same manner that lawyer fees are subject to the guiding rates, court fees vary depending on the specific cases, the standard of court fees in China is as follows:
For the cases where the claim concerns property relations, the court fee will be charged at a cumulative rate in segments according to the claim amount as follows:
| Claim Amount | Rates for One Instance |
| For the portion exceeding RMB 10,000 to CNY 100,000 | 2.5% of the portion |
| For the portion exceeding RMB 100,000 to CNY 200,000 | 2% of the portion |
| For the portion exceeding RMB 200,000 to CNY 500,000 | 1.5% of the portion |
| For the portion exceeding RMB 500,000 to CNY 1,000,000 | 1% of the portion |
| For the portion exceeding RMB 1,000,000 to CNY 2,000,000 | 0.9% of the portion |
| For the portion exceeding RMB 2,000,000 to CNY 5,000,000 | 0.8% of the portion |
| For the portion exceeding RMB 5,000,000 to CNY 10,000,000 | 0.7% of the portion |
| For the portion exceeding RMB 10,000,000 to CNY 20,000,000 | 0.6% of the portion |
| For the portion exceeding RMB 20,000,000 | 0.5% of the portion |
There are a few exceptions, divorce cases can be slightly more expensive – in the 50-300rmb range, with a 0.5% fee of the value of assets you are fighting over that exceed 200.000rmb.
Cases related to infringement of name, portrait, reputation, honor, or any other right related to personality, the court fee will be 100-500rmb, and 0.5 %- 1% of the compensation amount.
Luckily, there’s an online calculator that helps you calculate the court fees and execution fees. right here
4. The Fee for Preservation
Property preservation means if you sue someone, and you want to make sure that his property cannot transfer during the litigation, then you may apply for property preservation so that the judge will frozen the property. The fees there fore are in the xx to xx Rmb.
Evidence preservation is that when you sue someone, and the defendant has some evidence that is important for the case, but you are afraid that he will destroy the evidence. Then you can apply for evidence preservation, so that the judge will take some measures to avoid him destroying the evidence. The fees there fore are in the range.
| Claim Amount | Rates for One Instance |
| Not more than RMB 1,000 or no property amount is involved | RMB 30 for each case |
| For the portion of more than RMB 1,000 but less than RMB 100,000 | 1% of the portion |
| For the portion of more than RMB 100,000 | 0.5% of the portion (however, the total preservation fee will be capped at RMB 5,000) |
Certainly, you can also use the online calculator (http://www.zjcourt.gov.cn/zjzy/web/fee) as mentioned above to calculate the preservation fee.
5. The Fee for a Guarantee Letter
If you are applying for property preservation, the court will require you to provide a guarantee. The guarantee can be in the form of cash equal to 30% of the value of the preserved property, other property of the same value as the preserved property, or a guarantee letter issued by an insurance company.
Generally, the fee for a guarantee letter is around 0.2% of the value of the preserved property. However, the standard of guarantee letter fees may vary for different insurance companies.
6. Notarization Fee
Pursuant to Chinese law, any documents created abroad need to be notarized and certified. For instance, if you engage a Chinese lawyer while you are not in China, you have to sign the power of attorney outside of China. Then this power of attorney needs to be notarized in the notary office and certificated in the Consulate of China in the country where you sign it. As another example, if you need to provide the payment voucher as evidence in the litigation which is issued by an overseas bank, you have to make the payment voucher notarized and certificated, otherwise, the court may not recognize the validity of this evidence.
In this condition, you will have to pay for notarization fee. The notarization fee will depend on the standard of the country where you notarize the documents.
7. Translation Fee
When the evidence is in a foreign language, it will have to be translated when provided to the court. There are two translation agencies recognized by the Shanghai court for the translation of foreign litigation documents, namely Shanghai SISU Translation Service Co., Ltd and Shanghai Interpreters’ Association. You may visit their official websites for more information and quotations.
8. Do I Need to Pay an Execution Fee When Applying for Execution?
No. You don’t.
Although, if the plaintiff applies for execution after the judgment takes effect, the execution fee has to be paid to the court. However, in practice, the plaintiff does not have to pay for the execution fee in advance. The court will charge the execution fee from the executed properties of the defendant.
As a whole, it doesn’t take much to engage in a lawsuit in China — or, at least, not as much as you thought. Going to court might be a good choice for you to solve disputes and receive proper recompense.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
All You Need to Review When Signing A Contract
Contracts are a ubiquitous part of daily life, providing the framework for parties to fulfil their obligations and settle disputes. However, failing to review a contract thoroughly can lead to trouble. Pay careful attention to the terms and conditions, including any limitations, warranties, or obligations stated. Seek legal advice if necessary to ensure clarity and protect your interests. This article presents key considerations for reviewing a contract. It also shares some useful Chinese websites to help you learn more about your counterparty.
1. Verify the eligibility of the counter party
(1) Identity information
- For a natural person, it is necessary to review his/her original ID card or passport and confirm the information matches that on the contract.
- For a Chinese company, we’d better confirm whether the company has been legally and validly registered through the official website of National Enterprise Credit Information Publicity System: https://www.gsxt.gov.cn/index.html.
(2) Litigation or enforcement status
If the counter party is involved in litigation or enforcement, its capacity to fulfil the contract will be significantly affected. Here we share the following websites to confirm the counter party’s litigation or enforcement status:
- Enforcement Status:
China Enforcement Information Public Website (http://zxgk.court.gov.cn/), an official website operated by the Supreme People’s Court of The People’s Republic of China, in which you can check whether the counter party is executed by the court for failing to perform the judgment.
- Litigation Status:
Qichacha (https://www.qcc.com/) or Tianyancha (https://www.tianyancha.com/), a website operated by the private entities, in which you may check whether the counter party (only for company) has any relevant litigation cases.
2. Ensure the validity of the contract
(1) Confirm the counter party’s qualification
Qualification determines whether the contract is valid, invalid or pending effectiveness. For example, if the contract is signed by the counter party who is under 18 years old, then the contract will take effect when his/her statutory guardian recognizes the contract retroactively. Another example, if the contract involves the sale of medicine and neither party to the contract has a license to sell medicines, thus the contract will be void.
(2) Confirm the deputy’s authorization
Make sure that the deputy of the company who signs the contract on behalf of the company has the authorization to do so. Otherwise, the contract will only take effect upon the company’s retroactive recognition of the contract. However, if there is reason to believe that the deputy had authorization, the contract will remain valid.
(3) Confirm the transaction’s legality
The contract will be deemed invalid if its object is illegal or prohibited for trading. For instance:
- In China, Land ownership, drugs, obscene goods are prohibited for transaction, and cigarettes, tobacco, salt, guns are restricted for transaction (only can be exchanged by the specific entity who has the qualification).
- If the service content involves assisting in the theft of personal information, the service contract is considered invalid as it violates mandatory laws.
3. Confirm the ownership
Before entering into an agreement for the purchase of an asset, it is crucial to review whether the asset is legally and validly owned or registered in the name of the seller. This ensures that the transaction is conducted in a legally sound manner. Here we’ll share several ways to confirm the ownership:
（1）Real estate
Review the title deed of the real estate, and also request the owner to obtain the updated real estate information page of the real estate from the local Real Estate Exchange Center or on its official website (in Shanghai, the official real estate information can be obtained from the website of “一网通办”) .
（2）Cars
Review the ownership certificate of the car, and also ask the owner to obtain the updated property information page of the car at the local Vehicle Management Office.
（3）Shares
Verify the relevant information on the official website of National Enterprise Credit Information Publicity System: https://www.gsxt.gov.cn/index.html
（4）Trademark
Verify the relevant information on the official website of Trademark Office of China National Intellectual Property Administration: https://sbj.cnipa.gov.cn/sbj/sbcx/
（5）Patent
Verify the relevant information on the official website of Patent Office of China National Intellectual Property Administration: https://pss-system.cponline.cnipa.gov.cn/conventionalSearch
（6）Copyright
Verify the relevant information on the official website of Copyright Protection Center of China: https://register.ccopyright.com.cn/query.html
4. Quality Standards
(1) Clarify quality standards
Specify the quality standards as explicitly as possible:
- For a purchase agreement, include the brand, origin, type, texture, color, size, ingredient, package, function, quantity and weight.
- For a service agreement, include the quality standards can be the detailed service results, effect and characteristics of the deliverables, etc.
(2) Set quality guarantee deposit
Quality guarantee deposit is the retention payment set for ensuring the quality standards to be satisfied. Generally, it’s 5-10% of the total price, and is paid after a certain duration, allowing the buyer to refuse payment if the product has any quality issues during this time.
E.g. The buyer shall paid 10% of the total price as quality guarantee deposit within 10 working days after 2 years of delivery.
(3) Acceptance
Typically, both parties will need to inspect the deliverables and confirm whether they satisfy the quality standards after delivery, this process is called “acceptance”. However, there is another scenario where the quality standards have been met but the receiving party fails to confirm the acceptance. In such case, a “deemed acceptance clause” can be helpful.
E.g. Party A shall inspect the Products within 3 working days of delivery. If the Products meet the quality standard, Party A shall sign the acceptance confirmation. If Party A believes that the Products have quality problems after acceptance, it shall notify Party B in due time. If Party A neither signs the acceptance confirmation nor raises any objection to the Product, it shall be deemed that Party A has accepted the Product.
(4) Quality Remedy
Quality remedy is the resolution for quality problems. For instance, when the product has any quality problems, the buyer may require the seller to repair, return or exchange the product according to the contract.
5. Payment Term
(1) Amount
Firstly, the total price and unit price shall be clearly prescribed in the contract, including whether the tax is included or not. Additionally, it is important to specify the currency (e.g. CNY, USD) and corresponding exchange rate. For international trade, it may be necessary to include terms such as CIF or FOB.
(2) Payment Time
As to the payer, we suggest implementing an installment plan with specific payment conditions to reduce the risk of non-performance by the payee.
E.g. Party A shall make a down payment of 20% of total price, followed by a payment of 50% of the total price upon completion of the service by Party B, and finally a payment of 30% of the total price upon Party A’s acceptance.
As to the payee, we suggest setting the liquidated damages for the payer’s delayed payment.
E.g. The payer shall pay the payee 0.05% per day of the outstanding payment to the payer for delayed payment.
6. Ensure Deliverables On Time
Similarly, to ensure timely delivery of the deliverables, we can employ liquidated damages for late delivery in the contract. If delivery is in instalments, we must specify the detailed delivery time for each instalment.
7. Circumstances of Termination
Based on the Civil Code of PRC, both parties may terminate the contract under the following circumstances:
- Both parties agree on termination;
- Force majeure;
- One party expressly states or indicates that it will not perform its principal obligation prior to the expiration of the performance period;
- One party fails to perform its obligation;
- One party violates the contract rendering it impossible to achieve the purpose of the contract. Except that, both parties may also agree on other circumstances of termination in the contract.
In addition to the aforesaid circumstances, both parties may also define further circumstances of termination in the contract.
E.g. In the event that Party B is declared bankrupt, its business license is revoked, liquidated, dissolved, or enters these procedures; or Party B’s major property is seized, or other preservation measures are taken, Party A may terminate the contract.
8. Liquidated Liabilities
Although the Civil Code of the PRC provides that the defaulting party shall continue to perform the contract, remedy the breach or compensate for losses when it breaches the contract, this provision is not explicit enough. Including a specific amount or percentage for liquidated damages (e.g. 20% of the total price) or a specific compensation for losses caused by the breach (e.g. lawyer’s fee, notarization fee, guarantee fee, translation fee, etc) in the contract will help the aggrieved party to obtain greater compensation.
9. Applicable Law and Court
The applicable law and court can only be the one which has the closed connection with the case. This connection can be established by the location of one party or the place where the contract is signed or performed. For instance, if the contract is signed and performed in China, then both parties may choose Chinese law and Chinese court as the applicable law and court.
Additionally, arbitration may be a suitable alternative for dispute resolution due to its confidentiality and flexibility. Shanghai International Economic and Trade Arbitration Commission (SHIAC) and China International Economic And Trade Arbitration Commission (CIETAC) are both commonly selected by the parties.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
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