China lawyers

Got a great email the other day from a veteran China lawyer. This is someone who has spent about half his life living and working in China. He certainly does raise some interesting issues, so here goes:

I read your posts on not getting arrested in China and I wanted to give you a few of my thoughts on that.

1. It is pretty strange to have to write a post that says: you as a foreigner are required to comply with Chinese law. But I understand that as there are still a few “old China hands” who will tell you to just ignore Chinese law. So your statement is required. You and I both know though that even most of these people no longer believe it. I had someone tell me the other day that he always encourages his clients to avoid lawyers “because the more they spend on lawyers the less they have to spend on me.”

2. Here is an important point that I find I often have to drill into people’s heads here. In the U.S or the EU or pretty much any country with a well developed legal system, if you are hired by a properly registered company, you can assume that company will follow the various laws. You can assume that because the penalties for not doing so are so extreme it is only the shiftiest of companies that do not. In China, it is truly the opposite, at least when it comes to hiring foreigners as employees. Here you should assume the company will not follow Chinese law. Paradoxically, it is the foreigner (not their Chinese employer) who usually gets in trouble over this. Any foreigner who comes to China to work without making double-sure that what they are doing is 100% kosher is asking for trouble.

3. In the U.S. or the EU if you hire an accountant or a bookkeeper, you can assume that professional will instruct you on how to pay all of your taxes and how to follow all applicable laws. In China, if you hire a local professional (including many local lawyers as well), you cannot assume that person will advise you to follow Chinese law. Often they will instead advise you on how to violate Chinese law by telling you that “no one actually follows this law or pays those taxes.”

It is no wonder so many foreigners get into criminal trouble in China. The problem is that until around ten years ago, the “don’t worry about the laws” statements were pretty much true and those statements are still in many cases true for Chinese companies and for Chinese nationals, But foreigners are in a different category and they have to take a different attitude.

Despite the recent number of high profile arrests, you and I both know that when it comes right down to it, 99+ percent of the time when a foreigner gets arrested in China it is for actually violating the law. I mention this because the last thing I want people to believe is that they following the law does not matter in China either because doing so is not necessary or because they will get arrested anyway because China has gotten so out of control of late. As I believe you wrote somewhere, the important thing is not to act in such a way as to make it easy for the Chinese authorities to arrest and convict you. It is still the case that if you do that, you will almost certainly be fine.

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.