As a key part of the firm’s international practice, the China Practice Group specializes in legal issues arising from business activities of U.S. and other international businesses in China as well as those issues arising from Chinese business affiliates in the U.S.

Through its Guangzhou office and the firm's network of relationships in China, McCandlish Holton has personnel who are uniquely situated to assist with the variety of legal and business issues which can arise for foreign businesses active anywhere in China. In addition, firm personnel in the China office, with their proximity to Chinese clients and their direct link to McCandlish Holton's U.S. office, can provide Chinese clients the representation they require on their activities in the U.S. and Europe.

McCandlish Holton is one of only three American law firms authorized by the Chinese Government to operate an office in Guangzhou (Canton). The firm was one of the first twelve U.S. law firms authorized to operate an office in all of China, and the only such firm from the Commonwealth of Virginia. Guangzhou is the thriving commercial center of southern China and is located near Hong Kong. As the capital of Guangdong Province, China's most prosperous province with a population exceeding 60 million, Guangzhou is the most important city in southern China.

For the firm's U.S. and international clients doing business in China, McCandlish Holton assists by devising practical business strategies for successful operation within China's ever-changing, transitional economy. Listed below are key services the firm offers which are of particular interest to foreign firms pursuing business opportunities in China.

Planning, Negotiating and Developing Foreign Investment in China
The firm has significant experience in the complex process of planning, structuring, negotiating and developing all forms of investment and cooperation between Chinese and foreign partners. Among the more common types of transactions in which the firm has been involved are:

• Sales/Purchase Agreements, from commodities to power plants.
• Representative office establishment of commercial enterprises of various kinds.
• Real estate leases and real property development; infrastructure projects; project finance.
• Technology and intellectual property license agreements including patent, trademark and software license agreements, trade secret agreements, and other foreign economic contract.
• Planning and establishing equity and contractual joint ventures, compensation trade, export processing with supplied materials, and wholly-owned foreign enterprises.
• Planning and supporting entry or expansion in China by way of acquisition of the assets or equity of an on-going or failing foreign joint venture or domestic enterprise.

The firm advises on the full range of legal and business matters which must be addressed the structure and timing of capital contributions to the establishment and implementation of operational benchmarks, the creation of internal methods of dispute resolution which strengthen the joint venture and help assure its successes, and international tax planning. In addition, in the course of providing advice and support on investment structure, the firm can assist in the identification and evaluation of business and financial partners through its network of relationships in China. The firm advises clients on the intricate Chinese and U.S. laws established to protect against corruption and bribery including the U.S. Foreign Corrupt Practices Act.

Ongoing Legal Support for China Operations
McCandlish Holton is able to provide on site resources for prompt responses to day-to-day legal issues faced in the operation of business in China and for strategic response to new developments and opportunities.

Intellectual Property Protection
McCandlish Holton actively assists its clients in evaluating and implementing the most effective, multi-level approach to intellectual property protection for its China activities. We evaluate, recommend, and implement the most appropriate copyright, patent, trademark, and/or trade secret protections through registrations, licenses and contracts so that they are both effective in China and integrated with the clients’ global intellectual property strategy.

Sales and Distributorship Agreements
McCandlish Holton can assist in planning a sales agent or distributorship relationship and in drafting effective agreements which fairly protect the foreign firm selling products into the Chinese market. The firm can advise on the continually evolving law and practice of the distribution of goods and services in China.

U.S. and Chinese Export and Import Controls
Although U.S. export controls are now significantly relaxed, certain commodities and technology being exported from the U.S. are subject to stringent and complex licensing requirements. In addition, the U.S. has complex import quota and tariff requirements, and U.S. law offers a variety of means to minimize customs tariffs. In China, exports and imports are subject to an even more elaborate system of administrative control. Our International team can provide important guidance and advice in areas such as:

• Determining the import value and tariff on items to be imported into the U.S.; analyzing tariff and tax burdens on potential deals; securing quota information on products subject to import quotas in the U.S.
• Determining the appropriate export classification for commodities and technology being exported from the U.S. to China; obtaining necessary export approvals for technology transfers; applying for and securing appropriate export licenses when necessary.
• Evaluating the costs and benefits of tariff minimization strategies including the use of duty drawback, bonded warehouse or foreign trade zones, and implementing the optimum approach.
• Assisting in compliance with import and export regulations in China including clearing goods through Chinese Customs and verifying that potential trading partners have the necessary authority to engage in the proposed trade activity.

International Sales Transactions, Payment and Financing
The China Practice Group advises on negotiating and structuring effective and efficient sales transactions into and out of China. One of the key issues in exporting to or importing from China is structuring appropriate mechanisms to finance and assure payment for these transactions. Lawyers in the firm are experienced in providing practical solutions to payment issues including structuring letters of credit to satisfy the objectives both of the buyer and the seller in the transaction.

U.S. Trade Regulation
U.S. companies involved in trade with China are potentially subject to a wide variety of U.S. laws intended to regulate imports. Among these are those laws regulating the Customs treatment or classification of imports, the unfair pricing of imports including antidumping and countervailing duty measures, and unfair treatment of U.S. companies overseas including "Section 301" investigations, and review of Most Favored Nation status. As a consequence of the rapid expansion of trade with China, there have been a number of such types of investigations launched in the United States, the European Union and elsewhere.

Trade Relief Measures :
Our China Practice Group can assist with the following: Advise on appropriate trade relief measures to prevent injury from unfairly priced imports (typically dumped or subsidized). Compensatory duties may be imposed by the U.S. government if such unfair pricing is found.

• Defending against charges of unfair or injurious trade practices (dumping, countervailing duty, "Section 406," "Section 301," "Section 337".
• Advising on U.S. and international measures to protect U.S. or foreign intellectual property rights including investigations before the U.S. International Trade Commission and U.S. Trade Representative.
• Advising exporters from China to the United States on how to minimize the potential adverse consequences of such trade actions, and defending such firms accused of such unfair activities.
• Advising on the impact of international agreements on imports or exports from China especially those of the World Trade Organization.

International Taxation
Any investment in China requires careful evaluation of the tax consequences under both Chinese and U.S. laws for both the investing enterprise and its employees. The tax consequences that arise from operation of a representative office, equity or contractual joint venture, export processing operation, or intellectual property license can be significant. In recent years China has made a number of significant changes to its taxation rules of foreign invested enterprises that have caused many investors to accelerate their investment or change the structure of their enterprise. In certain instances, preferential tax treatment may also be negotiated with Chinese authorities which can significantly reduce the overall tax burden of a project. Expatriate employees and representative offices need to be especially careful to limit their potential tax exposure in China by conforming their actions to applicable tax treaties or Ministry of Finance rules in order to avoid or limit worldwide taxation on their operations or, in certain cases, avoid being deemed a taxable resident of China.

The China Group can advise foreign investors on such important issues of their investment as legal guidance under appropriate China tax treaties structuring representative office activities to minimize tax exposure tax record keeping; expatriate compensation and tax planning, cooperative investments and joint production programs, and related issues. The China Group assists U.S. companies trading in China on a host of issues under U.S. tax laws including reporting requirements, source of income, and transfer pricing rules applicable to related parties.

International Dispute Resolution
McCandlish Holton lawyers have extensive experience in international commercial arbitration and litigation involving foreign parties. Even more importantly, the firm is experienced in resolving disputes in the context of the Chinese business culture where frequently a client's interests may be best served by resolving disputes between joint venture or trading partners, or with the regulatory authorities, through friendly conciliation and sensitivity to the best means to a negotiated solution. The firm's lawyers have a deep understanding of the legal, governmental and cultural complexities and demonstrated experience in achieving negotiated solutions to business problems in China and elsewhere in Asia.