I. Contract Compliance
When engaging in international trade with Chinese companies, foreign companies should
establish a comprehensive written contract framework, including a master agreement for
international sale of goods, supplemented by purchase orders or sales orders. During contract
execution and performance, the following compliance issues should be carefully addressed:
(1) Contract Form and Content Requirements
Where a foreign company procures goods from a Chinese company, the export transaction
may involve export tax rebates for the Chinese exporter. Therefore, the contract must comply
with applicable Chinese laws and regulations.
Under the Administrative Measures for VAT and Consumption Tax Refund (Exemption) for
Export Goods issued by the State Taxation Administration, Chinese foreign trade enterprises 5 / 6
must submit documents such as export customs declarations, VAT invoices, and export
contracts when applying for export tax rebates. Accordingly, foreign companies are advised
to cooperate in maintaining a complete and compliant documentation chain.
(2) Import/Export Qualifications and Regulatory Compliance
Chinese exporters must possess basic qualifications, including customs registration as a
consignee/consignor of import and export goods, export tax rebate registration, and foreign
exchange registration. Foreign companies should conduct reasonable due diligence on the
compliance status of their Chinese counterparts.
Both parties should also assess whether the goods are subject to import/export restrictions
or prohibitions. If the goods fall within restricted or prohibited categories, compliance with
catalogues and licensing requirements issued by competent authorities (such as the Ministry
of Commerce and the General Administration of Customs) is mandatory. Violations may result
in administrative penalties or even criminal liability.
(3) Supply Chain Compliance
Foreign companies should conduct screening of upstream and downstream supply chain
participants for export control restrictions and sanctions exposure. Relevant compliance
obligations should be incorporated into the contract, and proper records of notifications
should be maintained during performance.
(4) Tax Considerations
International trade contracts may involve taxation both within China and in the foreign party’
s jurisdiction. It is advisable to clearly allocate tax responsibilities in the contract, depending
on whether the transaction involves trade in goods or services.
II. Trademark Protection
Foreign enterprises planning to carry out business activities, sell products, or engage in OEM
(Original Equipment Manufacturing) or ODM (Original Design Manufacturing) operations in
China are advised to register their trademarks in a timely manner to effectively protect brand
rights and reduce the risk of infringement. The complete trademark registration process
typically takes 8 to 12 months. If no opposition is filed during this period and the application
passes examination, the competent authority will issue the trademark registration certificate.
III. Dispute Resolution Recommendations
In the event of a breach by a Chinese counterparty, it is advisable for foreign companies to
agree on arbitration seated in Mainland China as the dispute resolution mechanism, for the
following reasons:
(1) Finality and Confidentiality
Arbitral awards are final and binding once issued, avoiding the lengthy multi-instance court
proceedings typical of litigation. Arbitration is generally conducted on a non-public basis,
which helps protect business secrets and reputation.
(2) Flexibility of Arbitration Language
The arbitration clause may specify English, Chinese, or bilingual proceedings, accommodating
the foreign party’s language preferences and facilitating communication.
(3) Procedural Efficiency
For example, proceedings before the Shenzhen Court of International Arbitration are typically 6 / 6
concluded within six months, which is significantly shorter than court litigation timelines.
(4) Recommended Arbitration Clause
It is advisable to include a dedicated arbitration clause in the contract, selecting a reputable
arbitration institution in Mainland China.
(5) Interim Measures (Asset Preservation)
Before or during arbitration, parties may apply to competent Mainland Chinese courts for
interim measures, including asset preservation orders such as seizure, freezing, or attachment
of the counterparty’s assets in China. These measures help prevent asset dissipation and
ensure effective enforcement of the arbitral award.
(6) Enforcement of arbitral awards
For an arbitral award rendered by a Chinese arbitration institution, the parties may directly
apply to the competent Chinese court for enforcement. The process is efficient, convenient,
and relatively low in cost.
Contact Information:
Welcome foreign enterprises and investors interested in investing in China, establishing a
company in China, or setting up factories, technology enterprises, engaging in trade or cross
border e-commerce with Chinese companies. Please feel free to contact us.
Yanmei CHE (Michelle) P.R.C Lawyer
Partner of Beijing Dacheng Law Offices, LLP (Shenzhen)
Mobile: what’s app: +852 9511 7818 +86 185 6626 7282 (wechat)
Email：yanmeiche@126.com
Address: 12F, 20F, 21F, 26F, Block A, Shenzhen International Innovation Center,No.1006，
Shennan Boulevard, Futian District, Shenzhen, China.
