Provisions for the Implementation of the «Regulations for the Administration of the Resident Representative Offices of Foreign Law Firms in China»

1) legal service departments of foreign governments, commercial organizations and other entities;

(2) practising associations composed of two or more foreign practising lawyers or law firms that do not share profits and risks.

Article 3: For the purpose of these Regulations, foreign practising lawyers shall refer to the persons that have been qualified for legal practice outside China and have obtained statutory practising licences in the country where they obtained their practice qualifications.

PART TWO: ESTABLISHMENT AND REGISTRATION OF REPRESENTATIVE OFFICES

Article 4: "An actual need for setting up a representative office to provide legal services in China", as provided in Item (3) of Article 7 of the Regulations shall be determined according to:

(1) the social and economic circumstances of the place where the representative office is proposed to be established;

(2) the need for legal services in the place where the proposed representative office is to be established;

(3) the scale, time of establishment, major business areas and specialist strengths, analysis on the prospect and future business development plan of the proposed representative offices;

(4) the restrictions by the laws and regulations of China on specific legal services or affairs.

Article 5: The "application letter signed by the person in charge of the foreign law firm to set up the representative office and to dispatch representatives" as provided in Item (1) of Article 8 of the Regulations shall include:

(1) the name of the representative office in Chinese and foreign language and the city where the representative office is proposed to be set up;

(2) the particulars of the applicant, including time of commencement of business, number of lawyers and partners, practising areas, major achievements, circumstances of its branch(es) or representative office(s) in any other country(ies) or region(s), its business related to China, address and contacts of its headquarters;

(3) the organizational form and type of legal liability borne by the applicant;

(4) the amount and coverage of practising risk insurance policies purchased by the applicant;

(5) a business prospects feasibility study and development plan of the proposed representative office and the major business scope of the proposed representative office;

(6) an undertaking to assume full civil liability as a result of the legal services to be provide by the proposed representative office or any proposed representative in China;

(7) an undertaking to truthfulness, completeness and accuracy of the information and materials that it has provided and the consistency between the original versions and the Chinese translations;

(8) an undertaking to comply with the relevant laws, regulations and rules of China upon obtaining the approval; and

(9) an undertaking to maintain compliant insurance policies covering the practising risks upon obtaining the approval.

Article 6: Where an applicant has real difficulty in providing the "partnership agreement or Articles of Association of the foreign law firm", as provided in Item (3) of Paragraph One of Article 8 of the Regulations, it may provide a document signed by its principal person(s) in charge containing such details as the time of execution, promoters, form of organization and type of legal liability as provided in its partnership agreement, shareholders' agreement or articles of association as an alternative.

Article 7: The materials to be submitted as required by Paragraph Three of Article 8 of the Regulations shall be submitted together with the Chinese translations in triplicate of originals and duplicates.

Article 8: The Chinese name of a foreign law firm that proposes to establish a representative office in China shall neither contain any words prohibited or limited by the laws, regulations or rules of China, nor contain any words misleading to the public.

Article 9: To establish a representative office in China, a foreign law firm shall nominate a proposed chief representative and other proposed representatives.

Article 10: To apply to establish an additional representative office in China, the following requirements shall be satisfied:

(1) its representative office most recently established in China has commenced its business for at least three consecutive years; and

(2) its representative office(s) previously established and the representatives thereof comply with the relevant laws, regulations and rules of China and the professional ethics and practising disciplines, and no legal liability under the Regulations has been pursued.

For the purpose of the paragraph above, the consecutive practising time shall commence as of the date of beginning of the procedures with the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the proposed representative office is located.

Article 11: In addition to the materials required by Article 8 of the Regulations, the following materials shall be submitted when applying for the establishment of an additional representative office:

(1) particulars of the representative office(s) already established;

(2) photocopies of the duplicates of Practising Licence(s) for Representative Offices of Foreign Law Firms in China of representative offices already established;

(3) the certificates issued by the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the proposed representative office is located, which are in conformity with Item (1) and (2) of the Paragraph One of Article 10 of these Provisions.

The materials shall be submitted together with the Chinese translations in triplicate of originals and duplicates.

Article 12: After receipt of the application materials for establishment of a representative office, the relevant office (bureau) of justice of the province, autonomous region or municipality directly under the central government shall handle the application as below:

(1) if all the application materials required are submitted, the application shall be handled in accordance with Article 9 of the Regulations; or

(2) if any of the application materials required is not submitted, the office (bureau) of justice shall, within 15 days from its receipt of the application materials, notify the applicant to submit the other materials required. If the applicant submits the other materials required within three months from its initial submission, the application shall be handled in accordance with the item above. If the applicant fails to submit the materials required within three months from its initial submission, the application shall be rejected and a written notification shall be sent to the applicant within 15 days.

Article 13: The Ministry of Justice shall, within six months from its receipt of the application materials and examination opinions from an office (bureau) of justice of a province, autonomous region or municipality directly under the central government, decide whether to approve the application or not. Where an application is approved, the Ministry of Justice shall issue, together with the duplicate, the practising licence to the approved representative office and notify the relevant office (bureau) of justice of the province, autonomous region or municipality directly under the central government to issue a practising permit to the representative(s) of the proposed office; where an application is rejected, the reasons shall be specified in writing to the applicant.

Article 14: An applicant shall, within 30 days from issue of the practising licence, complete such procedures as registration and issue of representative work visas at the departments of technical supervision, security, labour, banking and taxation of the place where the representative is to be located and at Chinese embassies and consulates in foreign countries on the strength of the duplicate.

Article 15: An applicant shall, within 30 days from completion of the formalities as provided in Article 14 of these Provisions, go through the formalities of registration for commencement of business and pay the registration fee with the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the proposed office is to be located.

To go through the formalities for registration for commencement of business, photocopies of the following materials shall be submitted:

(1) (duplicates of) its Practising Licence for Representative Offices of Foreign Law Firms in China;

(2) practising certificates of the representatives of the proposed representative office; and

(3) certificates evidencing the premises of the representative office that are notarized, including certificate of ownership, and a premises lease agreement (for a term of at least one year).

If a representative office fails to go through the registration for commencement of its business within the time limit specified in this article, the practising licence of the representative office and the practising permit(s) of its representative(s) shall automatically become void.

Article 16: No legal service may be provided by a representative office prior to its completion of registration for commencement of business.

Article 17: To go through the annual inspection registration, in addition to the materials as provided in Article 22 of the Regulations, the following notarized or certified materials issued by the lawyer administrative institution of the countries where the representatives obtained their practising qualifications shall also be provided:

(1) documents evidencing that the representatives have not been subject to any criminal punishment or other punishment resulting from any breach of professional ethics or practising disciplines; and

(2) photocopies of the valid documents in relation to insurance against risks of practising liability of the representative offices and the representatives thereof.

Article 18: After a representative office and its representative(s) pass an annual inspection, the relevant office (bureau) of justice of the province, autonomous region or municipality directly under the central government shall carry out the annual registration of the representative office and the representative(s) thereof and collect the registration fee.

PART THREE: CHANGE AND CANCELLATION OF REPRESENTATIVE OFFICES

Article 19: If any of the following circumstances happens to a foreign law firm that has established a representative office in China, the representative office shall report the matter to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the representative office is located for the record:

(1) change of name, address of headquarters and principal person in charge of the law firm; or

(2) merger or division of the law firm.

Article 20: If a representative office wants to change its Chinese and/or English name, the foreign law firm shall submit an application and other related documents signed by the person in charge of the law firm to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the representative office is located. The office (bureau) of justice shall report its examination opinion to the Ministry of Justice within 15 days from its receipt of the submission. The Ministry of Justice shall complete the verification procedures within 15 days from its receipt of the examination opinion.

The representative office shall, on the strength of the verification notification issued by the Ministry of Justice, go through the relevant procedures for changes with the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the representative office is located.

Article 21: If a foreign law firm applies to cancel a representative office, its shall submit an application signed by the principal person in charge of the law firm to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the office is located.

The office (bureau) of justice shall report its examination opinion to the Ministry of Justice within 30 days from its receipt of the submission. The Ministry of Justice shall complete the verification procedures within 30 days from its receipt of the examination opinion.

Article 22: The representative office shall proceed with its liquidation in accordance with the law from its receipt of the verification of cancellation from the Ministry of Justice. None of its assets may be disposed prior to the close of repayment of debts.

The practising licence and the duplicates thereof of a cancelled representative office and the practising certificate(s) of the representative(s) thereof shall be taken back, and the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the office is located shall publish an announcement on the cancellation.

Article 23: After a representative office is closed, the creditor(s) of the representative office may pursue the foreign law firm for unpaid claims.

Article 24: If a representative office is found in any of the circumstances provided in Item (1) and (3) of Paragraph One of Article 14 of the Regulations, it shall, within three months from dissolution or cancellation of the law firm, report to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the office is located and the relevant office (bureau) of justice shall submit a report to the Ministry of Justice to cancel its practising licence and shall complete the cancellation procedures in accordance with these Provisions.

Article 25: If, under some special circumstances, a representative office wants to suspend its business temporarily, the law firm which established the office shall submit an application signed by the principal person in charge of the law firm to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where the office is located. If the application is approved, the representative office may announce its suspension of business.

The suspension period of the representative office shall not exceed one year. If the period exceeds one year, it is deemed to be cancellation of business.

Article 26: If a representative office of a foreign law firm applies to change its office to another city in China, it shall apply to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where it intends to move. After being examined, the application shall be forwarded to the Ministry of Justice for approval.

The representative office should, with the approval notice, complete the relevant procedures of cancellation and registration in accordance with relevant provisions.

PART FOUR: DESPATCH AND CHANGE OF REPRESENTATIVES

Article 27: If a representative office wants to despatch or change its chief representative, it shall comply with Item (2) of Article 7 of the Regulations.

For the purpose of these Provisions, "members of the bar associations in the countries where they are obtained their practising qualifications" shall refer to the members of statutory national or regional bar associations or where there is no bar association [in the country], the persons registered with the bar administrative authorities of the country where they obtained their practising qualifications.

For the purpose of these Provisions, "the time of practising outside China" shall refer to the time when they were registered as lawyers in the statutory registration authorities for lawyers after obtaining practice permits in the countries where they obtained their practising qualifications (including the time during which they work in a separate tariff zone of the PRC). The time of practising outside China may be calculated cumulatively.

For the purpose of these Provisions, "the persons who share the same position" shall refer to the lawyers admitted to practise who manage the office, share the profits or assume the risks and who share the same rights and obligations as partners.

Article 28: The following materials shall be submitted if a representative office of a foreign law firm wants to despatch or change its chief representative or other representatives:

(1) An application signed by the principal person in charge of the law firm. The following shall be included in the application letter:

1. particulars of the chief representative or representative to be despatched or changed;

2. the position(s) to be filled and the term(s) of office(s);

3. an undertaking of compliance with Item (2) of Article 7 of the Regulation;

4. an undertaking concerning the truthfulness, completeness, accuracy of all the information and materials provided and the consistency between the original version and the Chinese translation thereof;

5. an undertaking to comply with PRC laws, rules and regulations upon approval of the application; and

6. an undertaking to maintain insurance against practising risks for the representative(s) to be despatched upon approval of the application.

(2) all materials as required by Items 4 to 7 of Article 8 of the Regulations;

(3) photocopy(ies) of the document(s) evidencing the insurance against the practising risks of the representative(s) to be despatched; and

(4) identity certificate(s) of the representative(s) to be despatched.

The materials set out in Item (2) and (3) above shall be notarized and certified.

The above application materials shall be submitted together with the Chinese translations in triplicate of originals and duplicates,

Article 29: The office (bureau) of justice of the province, autonomous region or municipality directly under the central government shall deal with the application materials that any representative offices of a foreign law firm submits for the despatch of a representative pursuant to the following procedures:

(1) if all the application materials required are submitted, the application shall be in accordance with Article 9 of the Regulations;

(2) if any of the application materials required is not submitted, the office (bureau) of justice shall, within 15 days from its receipt of the application materials, notify the applicant to submit the other materials required. If the applicant submits the other materials required within three months from its initial submission, the application shall be handled in accordance with the item above. If the applicant fails to submit the materials required within three months from its initial submission, the application shall be rejected and a written notification shall be sent to the applicant within 15 days.

Article 30: The Ministry of Justice shall approve the application within six months from its receipt of the application materials and examination opinions from an office (bureau) of justice of the province, autonomous region or municipality directly under the central government. Where an application is rejected, the reasons shall be specified in writing to the applicant.

Representative offices of foreign law firms shall get the practising certificate for the representatives from the office (bureau) of justice of the province, autonomous region or municipality directly under the central government with the approval notice and handle relevant procedures in relevant authorities.

Article 31: If a representative is found in any of the circumstances set out in Article 13 of the Regulations, and the practising certificate of the representative shall be cancelled by the Ministry of Justice, the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where a representative office is located shall withdraw his/her practising certificate and cancel his/her practising registration and make a public announcement of such cancellation.

PART FIVE: RULES FOR PRACTISING

Article 32: Any of the following shall be deemed as "Chinese legal affairs" set out in Article 15 of the Regulations:

(1) to be engaged in any litigation in China as a lawyer;

(2) to give legal opinions or certifications for any specific issues in any contracts, agreements, articles of association, or other written documents with respect to application of Chinese law;

(3) to provide legal opinions or certifications for any acts or incidences with respect to application of Chinese law;

(4) to provide opinions or comments in the capacity of attorney in arbitration on the application of the Chinese law and on facts which involve the Chinese law;

(5) to go through, on behalf of its clients, any registration, change, application, filing or other procedures with any Chinese government authorities or any other organizations that are authorized by laws or regulations to carry out administrative functions.

Article 33: No representative office or its representative may provide any specific opinions or evaluation in respect of the application of Chinese laws in their provision of any information on the impact of the Chinese legal environment in accordance with Item (5) of Paragraph One of Article 15 of the Regulations.

Article 34: In accordance with Article 11 of the Regulations, a representative office shall open its renminbi bank account and foreign exchange account to receive payments transferred by its clients within China.

Before applying to buy and obtain invoice books with local taxation authorities, a representative office shall, in accordance with PRC tax laws and regulations, complete its taxation registration to fulfil its taxation obligations.

Article 35: If a representative office wants to employ Chinese support personnel, it shall go through the procedures of employment with a local foreign enterprises service organization and obtain employees' certificates from the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where it is located.

Article 36: If a representative office wants to employ expatriate support personnel, it shall, in accordance with relevant provisions on the employment of expatriates in the PRC, apply to the office (bureau) of justice of the province, autonomous region or municipality directly under the central government where it is located. After the application is approved, it shall complete the procedures for employment and residence with the relevant departments.

Article 37: A representative office shall comply with the following rules in its publicity:

(1) when stating to its clients the business that it may engage in China, it shall also specify that it does not have the qualification, licence or ability to provide Chinese legal services;

(2) when stating to its clients that certain personnel have Chinese lawyer qualifications or have been PRC admitted lawyers, it shall also specify that the personnel cannot practise Chinese law at present; and

(3) when its publicity is made through letters or business cards, the statements set out in Items (1) and (2) above shall also be included.

Article 38: None of the representative or support personnel of a representative office may provide services in relation to Chinese law as a "Chinese legal consultant".

Article 39: No representative office or any law firm that establishes representative offices may:

(1) invest in any Chinese law firm, whether directly or indirectly;

(2) operate on an associated basis with any Chinese law firm or Chinese lawyer with which they share profits or risks;

(3) establish joint office with any Chinese law firm or despatch personnel to be engaged in legal services in any Chinese law firm; or

(4) manage, operate, control or enjoy equity interests in any Chinese law firm.

Article 40: Any of the following activities shall be deemed as employing PRC admitted lawyers:

(1) to reach employment or labour agreement(s) with PRC admitted lawyers;

(2) to establish de facto employment or labour relationships with PRC admitted lawyers;

(3) to reach an agreement with a PRC admitted lawyer on sharing profits or risks or participating in management;

(4) to pay any remuneration, fees or business dividends to PRC admitted lawyers; or

(5) to employ PRC admitted lawyers to engage in external business activities on behalf of the representative office or the law firm to which the representative office is affiliated.

Article 41: A representative office shall make clarification and explanation in respect of any complaints.

PART SIX: SUPPLEMENTARY PROVISIONS

Article 42: A representative office shall hang its Practising Licence of representative offices of a Foreign Law Firms in a conspicuous place in the office.

A representative office shall set a board in its office, which contains its complete Chinese and English name.

Article 43: The Practising Licence of Representative Offices of Foreign Law Firms shall be printed and issued by the Ministry of Justice.

The Practising Certificates of the Representative of Representative Offices of Foreign Law Firms and the Certificates for Employees of Representative Offices of Foreign Law Firms shall be printed by the Ministry of Justice and issued by the offices (bureaux) of justice of the provinces, autonomous regions or municipalities directly under the central government.

Article 44: With the exceptions of seizure and revocation by the issuing authorities pursuant to statutory procedures, no person or work unit may withdraw, withhold or damage the Practising Licences of representative offices of Foreign Law Firms, Practising Certificates of Representatives of representative offices of Foreign Law Firms and the Certificate of Employees in representative offices of Foreign Law Firms.

Article 45: The originals and duplicates of the practising licences of representative offices, the practising certificates of the representatives and the certificates for employees shall not be counterfeited, tampered, let, lent, transferred or sold.

If any person or office is in violation of the above paragraph, relevant legal liability will be pursued in accordance with the law.

Article 46: If a representative office loses its Practising Licence of representative offices or practising certificate(s) of its representatives, it may apply for a new licence or certificate(s) after a public announcement of the matter.

Article 47: The Provisions shall come into effect as of September 1 2002.

Endnote

1. Translation provided by Simmons & Simmons.