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Doing Business In China? Just Get A Seal.

By Dan Harris on Posted in Basics of China Business Law, Legal News

Just got a call from a United States client who is being told it needs a seal on a relatively unimportant document to be filed in China. Their question to me was whether the seal is “really” required. I told them they had the following two choices:

1. Pay my law firm a lot of money to figure out both whether Chinese law really mandates the company seal for the particular document at issue and whether the government entity with whom the document will be filed really will require our client’s seal; or

2. Rush order a company seal online for maybe USD $50. “Is it really that easy? She asked. “Yes,” I answered.

Bottom Line: If you are going to be doing business in an emerging market country, make it easy on yourself and get your company seal now. 

  • http://www.asiatoolsource.com Ji Mu

    This is absolutely true. If you want to do business with China, you better have your company seal ready. Company chop/seal is commonly required on numerous documents in China. Signatures are much less important and less used than company seals there.

  • Business Management

    Why didn’t you write this a year ago? You would have saved my company a lot of pain and trouble. What you say is the case. Now that we went out and had our seal made (in China for about $5), we use it all the time.

  • http://clmhomes.com Cris R

    You just saved my company a few hundred bucks. Thanks.

  • Philippe

    Just take care never to lose your seal. Better keep it safe.

  • Eric

    True, but just make sure you lock it up when it’s not in use.

  • William

    Seals vs. signatures is a great example of “diff’rent strokes for “diff’rent folks.” Both methods have their own weaknesses. Ultimately, it’s only good morals or fear of punishment that prevents normal people from forging signatures or misappropriating the company seal.

  • Robert Zierman

    Remember too that the person to whom you grant control of that seal now has the keys to your kingdom. Make sure it is someone that you can trust with your [economic] life!

  • Flipper

    Given China’s GDP growth, that’ll be a Performing Seal then eh?

  • Cheung Lee

    As far as I know, its only China, plus Hong Kong that regualrly use company seals in the way described. It doesn’t apply to India, Vietnam, Thailand, Malaysia, Brasil, African countries or any other “emerging markets” as you suggest as far as I am aware. Its just a Chinese thing, when they sometimes assume all foreign investors have the same regulatory processes as China does, which is far from being the case. There’s no real need to purchase a USD50 company seal in the US for “doing business in emerging markets” or China for that matter. They are needed – and issued – and part of the adminsitration kit for actually having a company in China, but generally no need for US corporations to rush out and buy one thats a bit silly.

  • John

    Clarification please! If you are a foreign company doing business in China, do you need these seals? Or do you need them only if you are a running a WOFE?
    Thanks.

  • Twofish

    You will need a chop if you run any sort of business in China. For any sort of corporate action, people in Mainland China/Hong Kong/Taiwan just don’t use hand written signatures.
    Part of the reason that chops are useful is that it makes it easier to decide “who has the power.” Rather than having to figure out whether a signature is valid or not, the person with the power is the person who has physical control over the chop.

  • http://www.chinalawblog.com Dan

    Cheung Lee,
    Russia and most of the Eastern Bloc also require seals/chops on all sorts of documents..

  • Mark H

    yes get two a normal one … colour of your choosing … and the the extra special extra big and extra red one for those documents that really matter – that and a warehouse full of bai jiu and you are set… China watch out!!

  • Ijeoma Ononogbu

    The Company seal is a prerequiste for conducting business in China. Since that is what’s required simply comply and that would save you both time and money.