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10 Introduction The purpose of this essay is to advise a potential investor on the legal aspects relevant to making an investment in the Peoples Republic of China PRC The first part discusses the main methods of establishing operations in the PRC It identifies the main legal and procedural steps The essay also details intellectual property law in the PRC focusing on the protection of patents copyright trademarks and trade secrets The essay notes the importance of human rights recognition in a business 20 Background The Sino-Foreign Equity Joint Venture Law in 1979 was seen as a first step by the Chinese government to build a legal structure governing foreign investment The PRC has continued to develop its legal system that protects investors rights as well as the rights of their foreign partners Zhixin 1988 notes that a substantial number of foreign-related tax laws and regulations have been enacted to develop international economic relations 30 Establishing operations in the PRC There are five main methods of establishing operations in the PRC these include Setting up a representative office Setting up a branch office under the Company Law Establishing an equity joint venture Entering into a cooperative joint venture and Setting up a wholly foreign owned enterprise 31 Representative Office Many firms choose to set up a representative offices in China initially as this helps the firm gain experience and acquire a better understanding of the size and potential of the market in the PRC These offices function as a liaison between a firms home office and trade organisations and related industries in China Representative offices are useful for conducting market research and establishing contacts with prospective customers and potential partners 311 Registration requirements Representative offices are subject to restrictions They cannot engage in certain activities and may not receive fees for services they provide directly generate income
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