Lawyers in Steptoe’s China practice are committed to helping clients invest and conduct business in China in the most efficient way possible, while managing the unique risks that arise in connection with trade and investment in China. We advise clients on market entry and exit strategies, investments, structuring of commercial agreements, compliance, and resolution of business disputes. We also help clients address regulatory barriers to market entry, and with labor and employment matters and intellectual property protection.
Our Beijing office serves as the center of our Asia practice, which has been recognized as among the world’s best by leading legal publications, including Chambers Asia-Pacific, which has ranked Steptoe in its top tier each of the last four years. Lawyers in our Beijing office have extensive experience in the following areas:
- China Business Transactions
- International Trade
- US Foreign Corrupt Practices Act, UK Bribery Act, Anti-Corruption Compliance, and Internal Investigations
- Regulatory Compliance and Market Access
- Labor and Employment
- Intellectual Property
- International Arbitration
Steptoe has an active corporate and finance practice, focused in large part on emerging economies throughout Asia and Europe. Our lawyers are noted for providing efficient and practical advice in cross-border transactions that often present challenging legal and regulatory issues relating to strategic or financial investments, joint ventures, and technology transfers.
In China, we have extensive experience of advising clients on foreign direct investment, private equity and venture capital financing, joint ventures, mergers and acquisitions, as well as transfer and protection of intellectual property rights. We advise clients on private investment fund formation both in China and offshore. Our clients also regularly look to us to assist in resolving issues that arise in connection with the establishment, management, financing, and operation of their business activities in China. We are also active in insurance and reinsurance, energy, logistics and global supply chains, chemicals, software development, semiconductor, telecommunications, and general manufacturing.
China Market Entry and Foreign Direct Investments
We represent multinational companies of all sizes in all stages of direct investment in China, including greenfield investments, Sino-foreign joint ventures, and mergers and acquisitions. We understand the unique complexities involved in foreign direct investment in China, and have a solid understanding of PRC foreign exchange controls rules, labor and employment law, intellectual property regulations, anti-trust law, taxation laws and other issues that impact foreign businesses. We help clients to negotiate and document deals, and to navigate China’s constantly evolving legal and regulatory environment.
Our team assists clients with structuring, negotiating and drafting bilingual licensing agreements in connection with investment deals. We draw on the strengths of our international intellectual property practice for support in connection with licensing of intellectual property in China. Additionally, we advise on related PRC registrations, employee covenants and the implications of the PRC tax and customs regime.
Private Equity and Venture Capital
We represent private equity investors, venture capitalists, private equity fund sponsors, and limited partners in a wide variety of transactions. We regularly advise PE/VC funds in connection with all stages of investment in and divestment of portfolio companies. Equipped with our strong knowledge of unique legal due diligence issues often presented in investments in Chinese emerging growth companies, we advise on legal and regulatory risks faced by PE/VC investors, assist them with rigorous due diligence that enables them to estimate the true valuation of their targets and ensure maximum protection in the transactional documentation. We also assist sponsors/general partners, as well as limited partners with fund formation and capital raising, including setting up RMB funds.
We represent Chinese portfolio companies in connection with equity financing transactions and counsel them on a variety of issues including restructuring, drafting and negotiating licensing agreements, complying with FDI and foreign exchange control regulations, and addressing employment law issues.
Mergers and Acquisitions
Our M&A practice combined with our deep Chinese regulatory experience underscores our deal execution capability. We assist foreign investors with acquiring China-based assets or equities, rationalizing their investment portfolio in China, and dealing with ongoing operational issues that arise from a merger or acquisition. We work proactively with clients to develop investment structures tailored for their business needs, and assist them with meeting challenging PRC regulatory requirements, in particular those applicable to sectors that are restricted to foreign investment, such as Internet, media, and real estate. We also help clients navigate the complex process of obtaining regulatory approvals required in transactions involving Chinese companies and assets, including acquisitions of state-owned assets.
Foreign Access to Chinese Capital Markets
Currently, China’s capital markets are not open to direct foreign investment except by means of government approved investment quotas. We assist international financial institutional investors with their applications for licenses under China’s Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) programs. We are regularly consulted by international financial investors with respect to their day-to-day compliance with Chinese financial laws and regulations, including banking, insurance and securities regulations.
Cross-border RMB Activities
In recent years, the Chinese government has been working on deregulation of capital account activities and full convertibility of the RMB. Steptoe lawyers understand the evolving Chinese financial regulatory regime, and we are well-positioned to help clients take advantage of the on-going deregulation of the RMB in order to realize commercial benefits. We advise clients on global liquidity management strategies, in-bound FDI using offshore RMB, and issuance of or investment in RMB-denominated offshore bonds and equities.
- Advised foreign receivers of a $250 million real estate development project in China regarding litigation in both China and the Caribbean, and related administrative and arbitration proceedings
- Represented a foreign party in the sale of Chinese breweries to a Chinese state-owned company
- Led the purchase of a Sino-Australian agribusiness JV in the Shanghai region by a US company
- Represented a US company in licensing certain coal mine safety technology to a Chinese state-owned company backed a provincial government
- Represented a US company in connection with establishing a food logistics joint venture with a Chinese state-owned enterprise
- Represented a US company in connection with establishing a poultry supply chain joint venture with a Chinese privately owned enterprise
- Represented a US company in connection with a buy-out of its Chinese JV partner’s equity interest in an industrial battery manufacturing company based in Shanghai
- Represented a Hong Kong-based private equity fund in its investment in and divestment from a Chinese LED light R&D and manufacturer
- Represented a Shanghai-based e-commerce company in a convertible loan transaction seeking financing from three international VC funds
- Represented a Hong Kong based PE fund in an equity investment in a US solar photovoltaic project and a related construction loan to finance the project
- Represented a Hong Kong-based company in a sale of a majority interest in a Chinese fashion design, manufacturing and retail business with presences in Hong Kong, mainland China and New York to a Mainland Chinese group based in Hong Kong, as well as the establishment of a new joint venture between the seller and the buyer to operate the same business
Steptoe has one of the largest and most experienced international trade practices in the world and is at the center of the most high-profile and challenging trade disputes between the United States and China. Many of our lawyers have gained their experience and insight through senior US government service with the Department of Commerce and the Office of the US Trade Representative, as well as the Departments of State, Defense, Justice, and Treasury. Chambers Asia-Pacific has consistently named Steptoe's International Trade group the market leader among international firms practicing in Asia; in both 2012 and 2013 Steptoe received the Chambers China Award for Excellence in International Trade. In addition to representing numerous companies throughout Asia in US and EU trade proceedings, we have substantial experience advising non-Chinese companies facing trade remedy investigations administered by China's Ministry of Commerce (MOFCOM). We also have a strong record of success in advising companies how to overcome trade and regulatory barriers in China.
- Represented a major US producer/exporter in the clean energy sector on the policy aspects of a trade remedy case in China
- Represented a Canadian pulp manufacturer in the Chinese antidumping duty case against imports of cellulose pulp from the United States, Canada and Brazil
- Obtained a complete victory for a leading US paper producer/exporter in an antidumping duty investigation of imported paperboard from the United States
- Represented a prominent US auto manufacturer in one of the largest antidumping and countervailing duty investigations ever initiated in China
- Defended the US poultry industry in an antidumping and countervailing duty investigation in China
- Advised the Government of China in successful dispute settlement proceedings against the United States concerning imposition of antidumping and countervailing duty orders on imports of Chinese products
- Represented the Government of China in the first ever WTO dispute concerning financial services
- Counseled an aircraft manufacturer on China's WTO obligations as they affected the industry sector
US Foreign Corrupt Practices Act, UK Bribery Act, Anti-Corruption Compliance and Internal Investigations
Steptoe counsels companies doing business in China on the scope, meaning and application of the US Foreign Corrupt Practices Act (FCPA), related US statutes, and the UK Bribery Act as they relate to their Chinese operations. Our practice includes compliance advice and counseling, investigations and enforcement work. Our lawyers have extensive experience conducting investigations in China, and have conducted more than 20 full-scale internal investigations for US and multinational companies in China. All investigations are conducted by a fully bilingual team, and the Beijing-based team leader for this practice has been ranked by Chambers Asia-Pacific 2012 - 2014.
We perform internal investigations for companies, boards of directors, audit committees, and special board committees, as well as design compliance policies and procedures for company personnel and affiliates working in China. We work across multiple industry areas, including pharmaceuticals, medical devices, oil and gas, alternative energy, software, media and entertainment, manufacturing, mining, clothing and textiles, cosmetics and livestock. Clients who are subject to US or UK jurisdiction seek our services in the context of implementing or upgrading compliance programs, conducting compliance reviews of existing operations, or performing M&A or pre-IPO due diligence and related remediation.
Lawyers in our China Practice have many years of experience working with US based securities litigators to defend Chinese companies in US securities litigation and equally extensive experience in conducting financial and other internal investigations for US publicly-listed companies and their audit and other board committees in connection with alleged violations of US securities laws.
We are one of the few foreign law firms with fully bilingual compliance and investigations practitioners, including a partner, based in Mainland China. Our Beijing-based team works seamlessly with the firm’s lawyers in the US, including partners who have served with the US Securities and Exchange Commission (SEC) and its Division of Enforcement. Members of the team have successfully advised and represented public companies, boards and their officers and directors in connection with China-focused and global investigations involving both the SEC and US Department of Justice.
- Represented a US-listed Chinese pharmaceutical company with respect to potential financial irregularities and violations of the FCPA
- Represented a US-listed medical devices company with respect to potential financial irregularities and violations of the FCPA
- Represented a financial services company regarding its operations in China, including review of company relationships with third parties in China, travel policies, and incentives practices for the client’s customers
- Providing compliance advice to multiple companies on gifts, travel, hosting and similar activities, as well as on joint bidding and procurement issues, and third-party relationship issues, including work with local counsel to various foreign financial institutions in China
- Represented the parent company of a major Hollywood film production company in relation to a voluntary document request from the SEC relating to the importation, exhibition, and distribution of theatrical feature films in mainland China
- Represented a US pharmaceutical company based in China in connection with a review of financial statements, US securities litigation and deregistration of the company from a US stock exchange
Steptoe has advised a number of multinationals on a wide range of compliance issues arising under China’s Anti-Monopoly Law. Our most significant experience has been in the area of pre-merger review, where we have worked with clients to develop effective strategies to facilitate the approval of complex and difficult transactions by China’s Ministry of Commerce (MOFCOM). In these matters, our Beijing-based team works closely with our colleagues in our offices in Washington and Brussels to deliver seamless service for these global representations.
- Assisted a major US Internet company in obtaining approval from the Chinese government for its acquisition of a US telecommunications company
- Advised an international airline on the antitrust consequences in China, Hong Kong, and South East Asia of its tie-up with another international carrier
- Advised a US-based multinational DRAM company in the pre-merger review of its merger with a Japanese memory manufacturer
Steptoe offers a full range of counseling, compliance, and advocacy services for companies whose activities implicate Chinese regulatory requirements. Our lawyers assist clients on matters involving banking and insurance regulations, foreign exchange controls, taxation, national security review, international competition, customs, cyber security, data privacy, food safety, and other regulatory issues. An important aspect of this practice is helping companies identify and resolve regulatory barriers to doing business in China. To meet these challenges, we combine our legal capabilities with our government relations experience, both inside and outside China.
- Assisted a major US retailer evaluate market access restrictions in China, including possible claims under the General Agreement on Trade in Services
- Assisted a well-known US motorcycle company with addressing motorcycle market access barriers
- Assisted a major US manufacturer with advice on the adoption of a modified testing protocol and related new emissions regulations
Our Beijing office represents foreign insurance companies in connection with market entry and access matters and with advice on structuring cross border insurance. The Chinese insurance regulatory regime is evolving rapidly and we assist clients with compliance matters in connection with bank assurance, insurance agency and other sales-related matters.
- Advised an international insurer on global sales of travel and health insurance to Chinese nationals
- Advised an international insurer on policy matters in relation to development of Chinese health insurance system
- Commenting on proposed amendments to Chinese insurance legislation for US clients
- Advised several US and UK insurance companies on market access regulations and strategies
Steptoe advises clients on the challenging and increasingly high profile Chinese regulatory systems for chemicals (China REACH), biocides, food safety, and cosmetics. As Chinese regulatory reforms continue, Steptoe offers unique and consolidated services that combine technical expertise, strong government affairs capabilities, and deep legal knowledge of the regulatory regimes. We assist our clients to overcome market access and regulatory challenges with focused and innovative strategies. Among other things, we have advised on compliance with Chinese hazardous and non-hazardous chemical regulations for both industrial and consumer products. We have also assisted with determining whether a product requires registration or approval and if it contains restricted or banned substances and reviewing labeling to ensure compliance with Chinese GHS requirements. Recently, we have worked on projects relating to the emerging regulation of antimicrobials and biocides. Our Beijing office is at the center of these China-based services, and draws upon our extensive regulatory experience in Brussels and Washington.
- Assisted a client in establishing a joint study program as a platform for development of an appropriate government evaluation methodology for advanced medical equipment in an industry where previously there was no appropriate standard and assisted with the timely approval of client’s equipment for use in China
- Assisted a client facing a lengthy interruption in production due to conflicts between old regulations and a newly implemented standard for food products by working with multiple regulators to achieve a successful outcome
- Assisted a client in obtaining a waiver for a consumer disinfectant product that fell outside existing testing protocols, which resulted in the product being cleared for importation into China
- Assisted a client with product labeling matters to comply with stringent disinfectant product testing requirements, helping the client access the Chinese market in a reasonable timeframe
The Chinese labor and employment environment is evolving rapidly and often poses significant challenges for foreign employers. A thorough understanding of the Chinese labor regulatory environment has become an essential aspect of doing business successfully in China for many multinational companies. From structuring cross-border employment arrangements to social security benefits, human resource management, and unionization challenges, our lawyers have significant experience advising clients on a diverse range of labor and employment law issues.
- Advised on impact of changes regarding secondment of employees by dispatch agencies in response to amendments to Labor Contact Law, including benchmarking of alternative structures
- Advised on termination of senior expatriate employee in the context of whistleblower allegations
- Investigated employee allegations of harassment by a senior executive
- Advised on transfers of employees from various companies to an acquirer operating company and related harmonization of benefits, including drafting of termination documentation and employment contracts
- Advised various US companies on unionization strategies and procedures
- Advised a leading international architectural firm on strategies for seconding foreign professionals and hiring local employees, including drafting secondment documents and employment contracts
- Advised on termination of two senior employees in context of an internal investigation involving potential violations of US laws, including drafting settlement agreements and related waivers
- Advised on termination of an employee for cause and related employment tribunal proceedings, working together with local Chinese counsel
- Advised a US technology company on enforcement of China IP protection provisions, including trade secrets protection, non-competition, non-solicitation and confidentiality obligations against an employee
For most clients doing business in China, a key element in their investment strategy is protection of their intellectual property from infringement and misappropriation. Steptoe lawyers are experienced in all phases of intellectual property representations, including the evaluation, acquisition, licensing, transfer, and enforcement of intellectual property rights, including patent, copyright, trademark, and trade secret rights. Lawyers in Steptoe’s Beijing office have particular experience in intellectual property protection measures tailor-made for China.
- Drafted licensing agreement for a major US apparel company with a Chinese manufacturer and retailer on the manufacture, development, and distribution through retail and online stores for a product tailored to the local market
- Assisting clients, including educational institutions and major biotechnology companies, in drafting and prosecution of Chinese patent applications with regard to a variety of technologies
- Advised client on Trademark Opposition Review proceedings, including preparation of draft submission and identification of supporting evidence
- Drafted and negotiated license of technology used in coal mining industry on behalf of a US client
Lawyers in Steptoe’s Beijing office have provided legal support for construction projects throughout China. We have represented numerous multinational corporations in connection with a variety of construction projects, including the tendering of engineering and design work, drafting EPC contracts and negotiating and drafting financing documentation in relation to the construction of factory premises, office buildings and purpose-built facilities.
Our lawyers are particularly experienced in construction projects in the energy, chemicals, bio-tech, semiconductor and software industries. We support foreign investors with all matters relating to construction projects, including project finance, entity formation, technology license or transfer, tax and regulatory issues, including practical advice on government permitting and registration formalities.
- Assisted a US technology company with tendering, drafting construction contracts, and negotiating in connection with construction of a manufacturing facility in Shanghai
- Assisted a US chemicals company with drafting and negotiating turnkey documentation and related environmental compliance in connection with a greenfield investment in a chemicals plant in Eastern China
- Assisted an international architectural practice with negotiating and drafting service agreements with clients and local Chinese design institutes
Our lawyers have significant and deep experience assisting clients in mediating and resolving disputes in China. We have worked on disputes involving treaty-based rights and obligations, waiver of sovereign immunity, measurement of damages, discovery, enforcement of awards, and choice of law, among others. Our experience includes representing foreign and Chinese parties in the key fora for China-related dispute resolution, including the China International Economic and Trade Arbitration Commission (CIETAC), the Hong Kong International Arbitration Centre (HKIAC), and the Singapore International Arbitration Centre (SIAC). One of our team members in China is on the panel of arbitrators of the Shanghai Arbitration Commission, which includes the Shanghai Court of Financial Arbitration and several members regularly sit as arbitrators in China-related disputes administered by international arbitral institutions.
- Represented a US importer in three arbitrations brought against Chinese suppliers under CIETAC Rules in Beijing and Shanghai
- Represented a Japanese investor in HKIAC arbitration concerning investment in China
- Represented a Japanese client in connection with a sale and purchase dispute with a Chinese listed company under ICC Rules
- Represented a Chinese state-owned enterprise in LCIA and SIAC arbitrations and related SDNY litigation concerning governance of the enterprise
- Advised foreign receivers of a US$250 million real estate development project in China regarding litigation in China, the UK, and the Caribbean, and in related arbitration proceedings (ICC) in Paris
Steptoe & Johnson LLP is a foreign law firm registered with the Ministry of Justice of the People's Republic of China. Under current Chinese regulations, we are allowed to provide information concerning the effects of the Chinese legal environment, but we are not authorized to practice Chinese law or to render legal opinions in respect of Chinese law.
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