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Reform offers chances and challenges

Updated: 2014-06-11 11:24
By Bonnie Wong in San Francisco ( China Daily USA)

Reform offers chances and challenges

Representatives of law firms and business-consulting firms takes part in the seminar Ring on Fire: Business and Legal Challenges of Dynamic Pacific Rim at the Nixon Peabody LLP law office in San Francisco on Monday. From left: K.H. Kim, partner at Yoon & Yang LLC; Linda Ji of Nixon Peabody LLP; Jordi Casas Thi of Roca Junyent; Patricia Ginsberg of Pamir Law; Jiang Jiang of Hylands Law firm; and Andrew Willder of Lander & Rogers. Bonnie Wong / China Daily

Recent economic reforms in China are attracting more foreign direct investment (FDI), which presents both legal and business challenges, according to law firm representatives and business consultants, who explained some of the new regulations and rules at a symposium.

"Ring on Fire: Business and Legal Challenges of Dynamic Pacific Rim" was held at the law offices of Nixon Peabody LLP in San Francisco on June 9.

Jiang Jiang, a lawyer with Hylands Law firm, which specializes in international business and investments, said that it is essential to understand the differences between China's domestic and foreign policies that may be different from previous ones. "Chinese leaders are committed to boost China's economy, but there may still be aggressive restrictions," Jiang said.

He said current reforms are relaxing restrictions on foreign investment in China's market. Shanghai's Pilot Free Trade Zone (FTZ) has been attracting attention due to its relaxed laws since being established in September 2013, he said. Though the FTZ rules are new, they represent a trend, he added.

Linda Ji, a partner in Nixon Peabody's mergers and acquisitions and corporate transactions practice group and China and Asia Pacific practice group, discussed new regulation that went into effect in March. They removed minimum capital-contribution requirements and the time frame in which foreign investors must contribute to capital investment.

"Before, after approval from the Chinese government for a business license, within 90 days from the date of issue of the business license, foreign investors had to inject typically about 15 percent to 20 percent of committed capital and within two years, all the capital," Ji explained.

The removal of the time frame will now allow more freedom for businesses and foreign companies to invest within their own desired time frame, she said.

"The biggest risk is not being prepared and not having good counseling to reduce risk and companies discovering big surprises along the road," Ji said. "The Chinese government is trying their best to create a better investing environment."

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