CAPITAL VERIFICATION

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According to Chinese law, all Foreign Invested Enterprises (“FIEs”) should provide capital verificationreports to the Administration of Industry and Commerce (“AIC”), State Administration of Foreign Exchange (“SAFE”), Tax Authority, etc., after their registered capital are injected. The injected capital can be in form of cash, tangible assets, or intangible assets.Especially when doing business in Shanghai, this is a must.

Our practicing certified public accountants can interview your finance personnel, coach them in providing necessary documents and issuing high quality capital verification reports.

1. WHATS THE COMPENSATION SHOULD I PAY IF I HAVE TO DISMISS AN INCAPABLE EMPLOYEE?

Where you have to dismiss an employee due to their inability to take their relevant responsibilities, you need to pay a compensation amount to him/her one month salary for each year he/she worked with you, with a maximum compensation of not more than 12 months.

2. HOW LABOR DISPUTES ARE PROCESSED IN CHINA?

All labor disputes are required to be handled according to law and in a timely manner. Chinese government encourages both parties in a dispute to solve their problems through negotiation and consultation.

Chinese laws and regulations clearly define the procedures and government bodies in charge of the settlement of labor disputes. According to the regulations, whenever a labor dispute arises between a worker and an enterprise, either party may apply to the labor dispute mediation committee for mediation. If the mediation fails or if neither party wants mediation, then they may apply to the local labor dispute arbitration committee for arbitration. If either party is not satisfied with the decision of the arbitration committee, he or she may file a lawsuit with a people’s court.

3. HOW TO PROTECT MY TRADE SECRETS BEFORE THEY REVEALED?

You may incorporate detailed clauses, such as confidentiality and non-competition clauses, into the employment contract. You may also have your potential employees sign a legal document stipulating that they will not divulge their former employers’ trade secrets in order to show that they have no intention to disclose another company’s trade secrets. In addition, you may also establish an internal system to protect my trade secrets, from document filing to key employees’ dismissal procedures

4. SHOULD I HAVE TO PAY SPECIAL ATTENTION TO WOMEN EMPLOYEES?
6. WHAT IS THE REQUIREMENT FOR PROBATION PERIOD?

Employers can require a probation period in the employment contract. However, the probation period should not exceed statutory period and it should be in correspondence with the length of the contract term. Generally speaking, the probation period should not exceed 6 months at most. During this period, either contracted party may terminate the contract without upfront notice. After probation period, the notice period of termination by either party should be one month.

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