Establishing a Business Presence in China

    August 2009

    Establishing a Business Presence in China

    On October 31, 2007, China issued the Industry Catalogues for Guiding Foreign Investment, which has become effective on December 1, 2007 ("2007 Catalogue") and supersede the 2004 catalogue ("2004 Catalogue"). Both the 2004 and 2007 Catalogues divide the industries into 3 categories: (1) encouraged, (2) restricted, (3) prohibited. Industries which are not listed in the Guiding Catalogue are deemed permitted. In order to determine if the intended foreign investment is Encouraged, Permitted, Restricted or Prohibited under PRC laws, the 2007 Catalogue should be the first material consulted.

    According to the new guidelines, foreign investors will be banned from some resource-intensive or high-pollution sectors while they will be encouraged in high-tech and environment-friendly areas. Foreign businesses are encouraged in high-tech equipment and new material developing while in services, outsourcing and logistics. For those traditional sectors, where the domestic enterprises have developed advanced technologies and high production capacity, foreign investment is no longer encouraged by the government.

    In May 2008, international law firm Hammonds became a limited liability partnership. Hammonds LLP and its affiliated undertakings has offices in Birmingham, Leeds, London and Manchester in the UK, and in Berlin, Brussels, Beijing, Hong Kong, Madrid, Munich and Paris.