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A lawyer's Reading: Law of the People's Republic of China on Application of Law in Foreign-related Civil Relations

 

This law adopted recently is a useful source for those who are to enter into business, commercial or personal relationship with China entities or natural person, such as trading, contract, family law, divorce, adoption, conflicts of laws, and dispute resolution.

Law of the People's Republic of China on Application of Law in Foreign-related Civil Relations

Order of the President of the People's Republic of China No. 36

October 28, 2010

The Law of the People's Republic of China on Application of Law in Foreign-related Civil Relations, which was adopted at the 17th Session of the Standing Committee of the Eleventh National People's Congress on October 28, 2010, is hereby promulgated and shall come into effect as of April 1, 2011.

President of the People's Republic of China: Hu Jintao

Law of the People's Republic of China on Application of Law in Foreign-related Civil Relations

(Adopted at the 17th Session of the Standing Committee of the Eleventh National People's Congress on October 28, 2010)

Table of Contents

Chapter I General Provisions

Chapter II Civil Subjects

Chapter III Marriage and Family

Chapter IV Succession

Chapter V Property Rights

Chapter VI Obligatory Rights

Chapter VII Intellectual Property Rights

Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1 This law is formulated for the purpose of resolving problems in relation to the application of law in foreign-related civil relations, reasonably settling foreign-related civil disputes and maintaining the legitimate rights and interests of parties concerned.

Article 2 The application of law in foreign-related civil relations shall be determined in accordance with this law. Where there are special provisions in respect of the application of law in foreign-related civil relations in other laws, such provisions shall prevail.

Where this law and other laws do not contain any provision with respect to the application of law in foreign-related civil relations, laws having the most significant contact with the foreign-related civil relations shall apply.

Article 3 Parties concerned may explicitly select laws applicable to a foreign-related civil relation in accordance with the provisions of law.

Article 4 Where the laws of the People's Republic of China contain mandatory provisions in relation to foreign-related civil relations, such provisions shall apply.

Article 5 Where the application of foreign laws will impair the social and public interests of the People's Republic of China, relevant laws of the People's Republic of China shall prevail.

Article 6 Where a foreign-related civil relation is governed by the laws of a foreign country, if different areas of this country are governed by differing laws, the law of the area that has the most significant contact with such foreign-related relation shall apply.

Article 7 Limitation of action shall be governed by a law that is applicable to a specific foreign-related civil relation.

Article 8 The nature of foreign-related civil relations shall be determined in accordance with the law of the forum.

Article 9 Foreign laws applicable to a foreign-related civil relation shall not include the law of a foreign country on the application of laws.

Article 10 Foreign laws applicable to a foreign-related civil relation shall be ascertained by the people's courts, the arbitration institutions or the administrative organs. Where parties concerned select applicable laws of a foreign county, they shall provide relevant laws of such country.

Where the foreign laws are unable to be ascertained or where laws of the foreign country have no relevant provisions, the laws of the People's Republic of China shall apply.

 

A Sales Agreement or Contract For Sale to Be Used In China

 

A contract of sale is a legal contract an exchange of goods, services or property to be exchanged from seller (or vendor) to buyer (or purchaser) for an agreed upon value in money (or money equivalent) paid or the promise to pay same. It is a specific type of legal contract.

An obvious ancient practice of exchange in many common-law jurisdictions it is now governed by statutory law that is designed to make transactions among merchants and consumers straightforward and easy to understand. See commercial law.

Contracts for sale involving goods are governed by Article 2 of the Uniform Commercial Code in most United States and Canadian jurisdictions, however in Quebec such contracts are governed by the Civil Code of Quebec as a nominate contract in the book on the law of obligations. Here is a sample contract for sale:

 

The impact of United States' possible new visa policy to China investors

Two United States Senators are preparing to introduce a bipartisan bill Thursday that would give residence visas to foreigners who spend at least $500,000 to buy houses in the U.S. This will give a great opportunity for Chinese investors. The idea has some high-profile supporters, including Warren Buffett, who this summer floated the idea of encouraging more "rich immigrants" to buy homes.

Foreigners immigrating to the U.S. with the new visa wouldn't be able to work here unless they obtained a regular work visa through the normal process. They'd be allowed to bring a spouse and any children under the age of 18 but they wouldn't be able to stay in the country legally on the new visa once they sold their properties.

Over the past year, Canadians accounted for one quarter of foreign home buyers, and buyers from China, Mexico, Great Britain, and India accounted for another quarter, according to the National Association of Realtors. For buyers from China, restrictive immigration rules are a deterrent to purchase.

The measure may have a more targeted effect in exclusive markets like San Marino, Calif., that have become popular with foreigners. Easier immigration rules could be "tremendous" because of the difficulty many Chinese buyers have in obtaining visas, says Maggie Navarro, a local real-estate agent.

Ms. Navarro recently sold a home for $1.67 million, around 8% above the asking price, to a Chinese national who works in the mining industry. She says nearly every listing she's put on the market in San Marino "has had at least one full price cash offer from a buyer from mainland China."

It is well known that now China nationals become rich. Those who have strong political background or energy mine owners are so rich that can afford to buy a house and get a visa. It's a good channel for those investment from unclear source. However, it may be subject to Chinese foreign currency control and foreign investment control. If the new visa policy comes into law, I am sure China government will enact new policy to face the United States' new law.

 

How to enter into an international sales agreement with Chinese supplier

The start-up of export or import operation requires the consent of the two parties (buyer and seller). This agreement takes shape generally by means of a sale contract, which aims at dividing the expenses and risks between the seller and the buyer. The drafting of this contract is of prime importance, for, it facilitates the trade and exchange and especially avoids disputes. The international sale contract is governed by different rules having the objective of harmonizing and facilitating international trade and exchange.

Drafting an international contract can be a risky business, especially the one to be signed with Chinese supplier, yet with the increasing globalization of markets, these cross-border contracts are becoming a common practice for most companies. At the same time, international contracts remain a difficult and mysterious subject for companies.

 

When should a foreign business owner hire a Chinese lawyer?

Today I had a discussion with a small business owner who has some serious legal issues facing her.  She wanted to back away from them, saying, "I can do this myself.  I don't need an attorney."  I won't go into the issues, but I can tell you what I told her: You can hire an attorney NOW to help you deal with these issues, or you can hire an attorney later to help you deal with the mess you created because you didn't get an attorney.

When Should I Call an Attorney When I Am Doing Business In China?

In my experience, there are times in the life of a business person when you should call an attorney.  You call an attorney not to sue someone but to protect yourself and your business before you get into trouble.  You want to be sure you don't say or do anything that can make things worse.

 
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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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