CHINALAWREPORTER中国法律报道

December2009Volume5,[e-mail][e-mail][e-mail]@[e-mail][e-mail]@[e-mail]@[e-mail]@[e-mail]@[e-mail]@[e-mail]@daypitney.comCHINALAWREPORTER中国法律报道REPORTINGONDEVELOPMENTSINTHEFOURLEGALSYSTEMSOFGREATERCHINAOnbehalfoftheleadershipoftheChinaCommittee,welcometothefinaleditionoftheChinaLawReporterfor2009.As2009drawstoanend,Chinahasbeguntoemergefromtheglobaleconomiccrisisandthesignsarepromisingforcontinuedgrowthin2010.Onthelegalfront,2009sawlawsandregulationsinreactiontothecrisisandtheongoingimplementationofmajorlaws,includingtheAnti-MonopolyLaw,theLaborContractLawandtheEnterpriseIncomeTaxLaw.OutboundinvestmentfromChinacontinuestoincreaseandinthelasthalfof2009privateequityinvestmentalsobegantorebound.ThisissueoftheChinaLawReportercontainsinterestingarticlesonboththeseareas.Thereisalsoaninformativearticleonde-registrationofarepresentativeoffice.TheChinaCommitteewasactiveduringthefallwiththeShanghaichapterofthecommitteeholdingitssecondmixeroftheyearinNovember.Withagoalofhavingadiverseblendofattorneys,discussionsaboutChinalaw-relatedissuesandoperatingafirminChinaweresharedbyattorneysfromtheU.S.A.,China,HongKong,Australia,England,Spain,IsraelandItaly.IdeasforABAfunctionswereshared,suchasreachingouttoChineselawyersmoreandCLEandgoodwillprograms.WearealsohavingdiscussionsaboutlaunchingthesameprograminBeijingandwelcomeanyvolunteerstoassistwithcoordinating.OursurveytoCommitteemembersreceivedover100responsesandprovidedvaluablefeedbackfortheleadershipoftheCommitteeonareaswherewearestrongandwherewecancontinuetoimprove.ThankstoalltheCommitteememberswhotookpart.ForthosewhodidnotgetachancetoparticipatebutwouldstillliketoprovidefeedbackonCommitteeactivitiesorsimplygetmoreinvolved,pleasedon’thesitatetosendeitherorbothoftheCo-Chairsanemail.ChinaLawReporter中国法律报道中国法律报道中国法律报道中国法律报道Volume5,Issue2December2009TheSectionofInternationalLaw:YourGatewaytoInternationalPractice国际法分部：你的跨国执业之门Page2of28Co-ChairsMessage,continuedFinally,therehavebeensomechangestotheeditorialboardoftheChinaLawReporter.CameronSmithhassteppeddownafterseveralyearsasaco-editor.OnbehalfoftheCommittee,wewouldliketothankCameronfortheexcellentjobthathehasdoneinproducingaconsistentqualitypublication,Wewouldalsoliketowelcomeourtwonewco-editors:JingWuofKingandWood(BeijingOffice)andJamiliaWangofDayPitneyLLP(Hartford,CToffice).TheyjoinourcontinuingeditorsRussellLeuofTaft,Stettinius&HollisterLLPandPaulEdelbergofMurthaCullinaLLP,whohavedonesuchoutstandingworkontheChinaLawReporterforseveralyears.WearesurethattogethertheywillcontinuethegreattraditionofourChinaLawReporter.WarmRegards,ElizabethCole,Co-ChairAdamBobrow,Co-ChairElizabethColeisaPartnerintheShanghaiofficeofOrrick,Herrington&SutcliffeLLP.AdamBobrowisalawyerpracticinginWashingtonDC.ChinaLawReporter中国法律报道中国法律报道中国法律报道中国法律报道Volume5,Issue2December2009Page3of28RECENTDEVELOPMENTSProcessConsiderationsintheDeregistrationofaForeignCompany’sRepresentativeOfficeinChina:APractitioner’sNoteByHongjuanBaiArepresentativeoffice(“RO”)isoneofthemostwidelyusedorganizationalformatsforforeigndirectinvestmentinChina.Sincethe1970s,foreigncompanieshaveusedROsasawaytoentertheChinesemarket.AlthoughROshavenolegalpersonstatusunderChineselawandaregenerallyrestrictedfromengagingindirectsalestransactions,foreigncompanieshaverelativelymorecontrolovertheROsandtheROregistrationprocessissimple,comparedtootherformsofforeigndirectinvestment.Infact,ROsareoftenviewedbytheforeigncompaniesasanavenuetohavenamerecognitionandincreaselocalbusinessnetworking,withouthavingtosetupacomplexcorporatestructureinChina.Duringthedownturnintheglobaleconomy,manyforeigncompaniesinChinahavechoseneithertoclosetheirROsortoconsolidateROswithotherChinesesubsidiariestoreduceoperationalcosts.DuetotheRO’suniquenon-legalpersonstatusandspecialregulatoryrequirementsintermsofhiring,tax,etc.,itisveryimportantforforeigncompaniestounderstandthemandatoryderegistrationprocedurestocomplywithChineseregulatoryrequirements.GeneralRuleAsageneralrule,unlesstheROisofacertainregulatedindustry(suchasforeignlawoffices,foreignairlines,etc.),theapprovalofthederegistrationofaROfallsintothejurisdictionofthelocalAdministrationofIndustryandCommerce(AIC).InreviewingthederegistrationfilingssubmittedbytheRO,theAICwillexaminethreemajorcriteria:(1)taxclearance,(2)liquidationplan,and(3)compensationtolocalstaff.Amongthethreemajorcriteria,thetaxclearanceisthemostsignificantone,whilethecompensationtolocalstaffisthemostproblematicone.TaxClearanceAICitselfdoesnothavesubjectmatterjurisdictionovertaxationmatters.Toreviewandacceptanydere