China Visa Series: Getting The Chinese Green Card (D Visa)

Whether you want to visit China long-term as a business owner or just on holiday, a necessary hoop you’ll have to jump through is getting a visa. And there’s no denying it’s a complex system. This will be a three part series that will guide you through the process of getting the three most desired visas: the permanent residence visa (D), the tourist visa (L), and the business visa (M).

The first visa we’ll be looking at is the D visa, frequently called The Chinese Green Card.

As a US citizen, you might be used to low-to-no cost entry into foreign countries. China visa fees stand at $140, with the maximum it asks for other other countries hitting a maximum of only $90 if they ask for multiple entries for ten years. There are only a handful of countries that charge US citizens at that rate or higher, though Saudi Arabia takes the cake with a visa fee amounting to half a grand at $533.

From the get go, you should know that $140 fee applies to your visa no matter how long you’d like to say, or whether or not you’re applying for multiple entries. For this reason, immigration attorneys and visa agencies will often advise you to go for broke and apply for the visa that offers multiple entries over ten years. If you tell them you’re not interested chances are they’ll look at you like you have five heads.

Ordinary Visas

A bit of background

There are four types of visas, the diplomatic, the service, the courtesy, and finally the ordinary. The vast majority of people seeking to enter China will fall into the ordinary category.

Ordinary visas are true to their name in that they apply to people who have ordinary reasons for trying to enter China. These categories of reasons are divided into twelve types: C, D, F, G, J1, J2, L, M, Q1, Q2, R, S1, S2, X1, X2, Z.

These visas range from foreign crew members on international transportation to foreign national students studying in China for a semester.

The Chinese Green Card

One of the most difficult ordinary visas to obtain is the D visa. In 2012, it was estimated approximately 5,000 D visas were granted to foreign nationals… since the program started in 2004. It’s possible that we’ll see the PRC issue more D visas in the future as the PRC seeks to entice top-level foreign talent.

But if you can get it, the D visa is one of the most desirable in that it’s essentially the Chinese version of the US green card. It grants its owner permanent residence in China and freedom to work, leave, and return to country at will… without ever having to apply for an extension or make a visa run. But it does not make the visa holder a Chinese citizen.

First and foremost, you must be 18 to qualify for this visa and not have a criminal record that the Chinese government will recognize. If you have that down, the next thing to consider is which of the six paths to permanent residence applies to you.

The types of qualification for D visa falls generally into two categories, only one of which will be considered here: either family related or business related.

For business related D visas, there are two roads. You must either be an investor or an employee. But beyond that, there are strict requirements attached to each.

D Visa: Investment

If you’re seeking to gain permanent residence in China based on your investments you must have made:

  • direct investments in China for three consecutive years and have a record of taxation as well as,
  • made an investment of over $500,000 USD in industries that are noted in the Catalogue of Industries of Foreign Investment produced by the PRC government
  • have made a total investment of over $500,000 in China’s western counties, or in counties which are currently the focus of poverty relief action by the PRC government,
  • have a total investment of over $1 million USD in the central part of the country, or
  • have invested over $2 million USD in the PRC government.

If you meet any of the above, you can then consider whether you have or can do the last four requirements.

  1. You’ll need to complete the D Visa form.
  2. A valid foreign passport.
  3. Two valid passport photos.
  4. Received a certificate of health after undergoing the Exit-Entry Inspection, conducted by the Quarantine Bureau or issued by a foreign medical agency that is accredited by teh Chinese embassy. Worth noting is that once you receive your certification it is only valid for six months.
  5. Finally, you must have certificates of registration, approval of foreign funded enterprises, proof of combined annual inspection, proof of personal tax payment, or any other document that would be relevant and material in proving the validity and worth of your investment in China.

Assuming you’ve managed to overcome every hurdle, the next step is to actually submit your documentation and fees, then kick back your feet and wait for it to process.

You’ll submit your application, with a copy of your passport page, your two passport photos, your health certification, evidence of no criminal record, all relevant documents surrounding your investment, and fees (1,500 RMB Application Fee for each person, 300 RMB for each Foreigner’s Permanent Residence Permit) to the Public Security Administration of a province of your choice, so long as it’s controlled by the PRC.

You can submit it yourself in person or you can have a third party go in your stead, but the third party must have power of attorney to submit the documentation, which should be attested to by a Chinese embassy or consular office.

Once your material is submitted, the Public Security Authority will provide a decision within six months.

D Visa: Employment

The requirements for those seeking a D visa through the professional or employment channel also face their own strict set of requirements:

  • the applicant must have worked as a deputy general manager, deputy factory director or above, or of associate professor, associate research fellow and other associate senior titles of professional post or above or enjoying an equal treatment;
  • she must have worked at least four successive years, with a minimum period of residence in China for three cumulative years within that four-year time frame;
  • she must be in good standing in terms of taxation;
  • the units where she worked must meet any of the following terms and conditions:
    • institutions subordinate to the various ministries under the State Council or to the provincial level people’s governments;
    • major higher learning schools;
    • enterprises or institutions executing major engineering projects or major scientific projects of the State;
    • high-tech enterprises,
    • foreign invested enterprises in encouraged type,
    • foreign invested advanced technology enterprises or foreign invested export-oriented enterprises.

If you fit these narrow qualifications, then you may be eligible for a D Visa. Similar to the Investment path, you must then meet then submit all of the necessary paperwork.

You’ll submit your application, with a copy of your passport page, your two passport photos, your health certification, evidence of no criminal record, all relevant documents surrounding your employment, and fees (1,500 RMB Application Fee for each person, 300 RMB for each Foreigner’s Permanent Residence Permit) to the Public Security Administration of a province of your choice, so long as it’s controlled by the PRC.

But beyond that you must also provide one of the following:

  • units are foreign funded enterprises, the certificate of approval of foreign funded enterprises and proof of combined annual inspection should also be provided;
  • persons of enterprises or institutions executing major engineering projects or scientific projects of the State should provide testifying documents for the projects issued by the competent authorities of the provincial level people’s governments or ministries;
  • persons working for high-tech enterprises should provide certificates of high-tech enterprises;
  • persons working for encouraged type foreign funded enterprises should provide letter of confirmation of the encouraged type foreign invested projects;
  • persons working for foreign invested advanced technology enterprises should provide letter of confirmation of foreign invested advanced technology enterprises;
  • persons working for foreign invested export-oriented enterprises should provide letter of confirmation of foreign invested export-oriented enterprises.

Whether you’re applying for a D visa under investment or employment, both offer very high bars for Chinese-resident hopefuls. But we may see China relax these strict requirements in the coming years.

A Business Owner’s Introduction to Registering Trademarks in China

You spent countless hour thinking up the identifying marks of your business: its name, its logo, and its slogan. But when you bring your business to China you run the very real risk of losing all three since IP laws in your country may not be recognized in China.

In some cases, it’s just a matter of someone liking your idea and wanting to use it as their own. They may want to create a copycat business. It’s also not unheard of for trademark hijackers to take your ideas, only to try and sell them back to you.

For these reasons, there can be no understating the importance of registering your trademarks. By doing so you protect yourself in two ways: you prevent others from stealing your trademarks and you prevent others from stating you are infringing on their trademark rights, as was done in the infamous Apple case. Being caught in a trademark infringement case can be a costly affair, so it always pays to register your trademark in advance.

Where to go to register

In order to register your trademark in China you must register it with the Chinese Trademark Office. E-filing is available for Chinese businesses but is not yet accessible for foreign owned businesses.

Once you submit your application to the CTMO will allow other parties to oppose your registration for three months. If there is no objection, the CTMO will then move forward with the registration process and you can expect to have your registration certificate for months after that initial three-month wait.

At its most expedient, an unopposed registration can take nine months to complete, or up to a year and a half. The cost of this process is typically $500 to $1000. But if your registration is opposed then those costs may double.

There are also issues with applications which are deficient, or if there are similar trademarks already registered. For this reason, having counsel from the beginning can be both cost and time efficient. If your application is incomplete or flawed, a company may then file for a review with the Trademark Review and Adjudication Board.

What can be registered as trademarks?

In China, any visual symbol or sign that is used to distinguish a good or service of one person, entity, or some other organization from others may be trademarked. This includes designs, letters of an alphabet, numbers, 3-D symbols, words, even combination of colors, can all be registered as trademarks.

However, some trademarks are simply off limits, but reasonably so. For example, you can’t trademark a country name, the names of international organizations like the World Health Organization, can’t be registered as trademarks.

The Trademark Office also has a database of all registered trademark. You can save yourself time by checking this database for slogans, logos, or business names that may be similar to yours that have already been trademarked.

What class is your trademark?

In order to register your trademark, you will need to classify it.

China, like many countries, follows the World Intellectual Property Organization’s Nice classification which provides for 45 different classes of goods and service. But, beyond that, China also offers sub-classes to those 45 different categories. It is possible to have a similar or even identical trademarks, so long as they are in different classes or sub-classes.

In order to avoid trademark hijacking or consumer confusion, it can be wise to register your trademark in all classes that you believe are relevant and will cover every product you sell or intend to sell for up the next three years. If you fail to use the trademark in a chosen class for a three-year period, your protection of that trademark in that class will lapse.

Who receives the trademark?

Say you and a rival try to register identical, or even just similar, trademarks for the same type of product. Who will receive the trademark? The decision is guided by the “first to file” concept, which states that the Chinese Trademark Office will grant the trademark to the person who submitted the first application.

As you can imagine, while this policy makes things simple and expedient, it also makes it easy for trademark hijackers to get rights to your trademark if you don’t move quickly enough.

How long is your trademark valid for?

The day your trademark is approved and registered the clock starts. A trademark in China has a validity period of ten years.

Once your ten years are up you should apply for a renewal of the registration. The Chinese Trademark Office grants you six months to submit this application. This six-month period counts as a grace period. But if no application for renewal is made in that time period your registered trademark is cancelled.

Authorizing others to use your trademark

If you’d like to authorize another person or entity to use your trademark, you will need to create a license contract which will bind you and the person or entity you will grant use of your trademarks to. This relationship will be overseen by a licensor who will ensure the quality of the goods for both parties.

This license, like all applications, will be submitted to the Chinese Trademark Office.

Someone’s infringed on your trademark! Now what?

Trademark infringement occurs in many circumstances: if a symbol or slogan that is identical to your trademark is used, if someone sells counterfeit goods with your trademark, and if your trademark is replaced without your consent and then goods are marketed bearing a different trademark.

So what happens once your trademark has been infringed upon? At this point, it’s a good idea to seek an attorney who can guide you through the process. There are two roads which are generally taken: negotiations and litigation. In a negotiation your attorney will attempt to gain you a handsome settlement, sparing both you and the trademark infringer the costs of litigation. Sometimes, however, this may not work and the matter will go to the court. In court, the matter may take years to resolve. But as a foreign citizen you may still expect to receive a fair trial, though favoritism isn’t unheard of in smaller cities.

Another option is to go to the Administration of Industry and Commerce (AIC). This government agency exercises authority on a national, provincial, county, and municipal level and is the foremost agency when it comes to assisting in resolving trademark infringements and disputes, corporate registration, market supervision, and similar. It is also known as being very responsive to issues involving trademark infringement.

When an infringement dispute is brought before the AIC and the AIC determines that the accused is indeed infringing upon your trademark, the AIC then demands that the infringing act immediately stops, that all infringing goods be confiscated and destroyed, as well as any tools used for the creation of those goods. A fine is then imposed.

Should you find yourself unhappy with the conclusion reached by the AIC you may still bring your issue before the People’s Court.

Starting Your Business in China: The Essentials

Starting a business in China can be a difficult task, filled with nuance and knots, which can be a culture shock for US citizens who might be used to the more straightforward process of business formation. For that reason, it’s always best to go in prepared for the opportunities and obstacles, preferably with an agent who knows the legal and cultural hurdles that are unique to China.

Beyond that, a bare bone checklist for someone starting a business in China should be: industry, city, renting an office, business entity, your five-year plan, documents for registration, registering your intellectual property, getting a bank, and finally hiring staff in China.

Industry

Right off the bat, you should be aware that China is one of the more restrictive countries to do business in. Certain industries, like forestry and financial services, are more protected than others, as was discussed in this article.

For that reason, you have a better opportunity to best position your business for success by checking out the Chinese government’s Five-Year Plan to see what sort of industries the Chinese government is seeking to promote. The Chinese government is also seeking to open the market and certain industries to more foreign investors under its Third Plenum Decision, which will hopefully have gone into full effect by 2020.

The vast majority of industries still remain open to foreign investors and business owners.

City

One of the most important (and necessary) considerations for your business is where it will be.

Additionally, geological positioning is of utmost importance. China has three major political and industrial centers: Shanghai, Beijing, and Guangzhou. Depending on your industry, some of these cities are better than others. Shanghai is well known for its manufacturing of communication equipment, automobiles, electronics, steel products, petrochemicals, and biomedicine. Beijing is well known for its pharmaceuticals and electronic industries, and is one of the leaders in bio-engineering and information technology. Guangzhou, which has been ranked as the best city to begin a business in mainland China, manufactures all sorts of items, from car parts to toys.

Renting an office

Once you’ve establish the type of business you’ll be setting up, and the city, you will need to rent an office. An office address is essential element when registering your business. But be cautious and ensure that the space your renting in is zoned for the type of business you are planning.

Business entity

Next, before beginning the registration process, you will need to consider what sort of business entity to register under. Similar to business incorporation in the United States, China has certain categories businesses may fall under. In China, the entity types a foreign business owner may register under are: joint ventures, representative offices, and wholly foreign owned enterprises.

The differences between these entity types, with their pros and cons, could easily occupy their own article. For this reason, only a short comparison will be provided.

A joint venture is typically regarded as the best business entity to register under, and the one most likely to be approved. However, it requires a partnership between your foreign business and a Chinese citizen. However, many business owners fail to carefully vet their Chinese business partners, to ensure similar values and long term plans, which can lead to significant hardship down the road. And because the Chinese business owner is on his “home turf”, so to speak, it’s more likely that if a case between the two should ever be litigated the Chinese business arises the Chinese partner will win.

Representative offices are a low-cost, generally entity but come with the handicap of significantly limiting what sort of industries you can be in and what sort of business actions you can take. A representative office exists essentially to do as its name suggests – to represent your foreign business in China. Thus, you can’t provide services or products, or generate revenue.

The wholly foreign owned enterprise (WFOE) comprises the majority of foreign businesses in China and makes up 75% of American investment in China. However, though it may be commonplace, WFOE are very complicated to set up, more likely to be closely scrutinized by the Chinese government, and requires a minimal capital investment that must be put into a Chinese bank. This amount will vary depending on the industry your business is in and the city where it will be located.

What’s your five-year plan?

Once you’ve determined what sort of entity you’ll attempt to register your business under, you will need a five-year plan. It’s essential that you approach this plan carefully because once it’s approved you are only allowed to work within the guidelines of that plan. If you deviate from it, for example by trying to offer a service or product that’s not within the plan, you can be shut down. For this reason, broad strokes may be better, but the safest road is to get receive professional consultation as the government still expects a level of specificity. A professional can help ensure that you’re hitting the spot just right.

Documents for registration

Next, you’ll need to get the necessary documents in place. The documents you’ll need will vary depending on what sort of entity you’re registering as, and where you’ll be registering. However, be prepared to be flexible. There are countless stories of foreign business owners who brought in the proper documents but are then asked to produce other information, ranging from how businesses might work in the United States or to provide proof that you really have the knowledge to produce a good or provide a service. It is always better to just do as the government official asks. There is little to be gained in trying to tell them it is not necessary.

Intellectual Property

Now that you’ve registered your business, one of your next biggest concerns should be your intellectual property. Intellectual property law is still a sector of law that is in a state of great flux in China but there have been many cases within recent years which have showcased how difficult it can be for even the largest foreign businesses to protect their well-known intellectual property.

Your bank

You will also need a bank now that you have a business registered in China. There plenty of reputable banks, including Bank of America if you’re looking for a familiar face. As a US business owner, you may find that you it is more beneficial for you to choose a bank that already has established ties with the United States, as it grants easier tracking of your money and overall transparency.

Hiring staff in China

Eventually, you will want to start hiring staff. Chinese labor laws are distinct from US laws and should be considered carefully before rushing into any major decisions when it comes to employees. This ranges from hiring, to employee contracts, to termination. An employee contract and employee mutual are essential for hiring in China.

Foreign investors rejoice, Apple wins intellectual property case in Beijing

As of April 2017, the Beijing Intellectual Property Court has dismissed the ban on Apple iPhone 6’s after a Chinese company accused Apple of infringing upon its design. This latest move by Chinese courts speaks to a positive evolution in recognizing international IP law in China after a long history of “copycat” theft by Chinese businesses.

One of the largest deterrences of foreign firms investing in China is the fear that they will not be able to protect their intellectual property. There have been multiple high-profile cases where massive international corporations like Apple and Disney have had to fight tooth and nail to protect their trademarks in China.

For Apple, the issue began in May 2016 after the international tech giant was ordered to stop selling iPhones in China after Shenzhen Baili Marketing Services lodged a complaint, stating that its patent on its mobile phone design was being infringed upon by iPhone sales.

More recently, Disney, the iconic and multinational mass media and entertainment conglomerate best known for its movies and theme parks, has run into issues with its establishment of its Shanghai park. Before it could even open its gates Chinese corporation Dalian Wanda Group opened up a theme park of its own using classic Disney characters such as Snow White and the iconic stormtroopers of the Star Wars franchise to greet its guests.

Copyright infringement exists at all levels and has remained a thorn in the sides of foreign businesses, with many technological firms choosing to keep China at arm’s length for fear that their blueprints may be stolen and copyrighted by Chinese partners.

Unfortunately, even while companies are increasingly pressured by the Chinese government to lower their prices and turn over proprietary technology, the laws involving intellectual property and copyrights still varies from province to province, making this an issue that remains difficult to untangle.

However, there has been change in a positive direction. China has begun making changes to its IP laws and has begun the process of creating a new national court system to handle IP cases, in a step that will help the country transition away from “local provincialism”.

The United States, which has expressed a strong interest in ensuring goods are “protected, respected, and if infringed on or stolen, there are consequences to disincentivize it”, has provided experts on the topic who are currently reviewing the new laws, training Chinese judges, and raising any IP issues they learn of in bilateral discussions with China.

These steps, while still not enough to stymie the theft of intellectual property nor give firms full confidence that they protect their ideas and trademarks, is still a clear indicator China desires to honor international IP protocol, with this win by Apple a sign of progress.

Featured Image Credit: Sean Pavone / Shutterstock.com

Investment in China remains robust and profitable for US investors

Despite what may seem like a tumultuous political climate between the two economic giants, US businesses continue to invest and profit at great rates in China. As of 2016, $228 USD in 6,677 US investments have been made into China. This growth is expected to continue as the Presidents of the respective countries continue trade negotiations, which have thus far been positive.

Initially, what drew US investment into China were lower startup prices. Now, however, US investors have begun to realize the great opportunities that China presents, especially in terms of its large consumer market which remains robust, with eyes towards entertainment, travel, luxury goods, and e-commerce.

There is a global sentiment that investment in China is a positive venture. This is reflected in the high rates of foreign investment in China, which as of 2014 overtook the United States.

china investment

However, this isn’t to say that foreign investment in China doesn’t have its own unique challenges. Among those are the current government restrictions on certain sectors of investment. The Organisation for Economic Co-operation and Development (OECD) has listed China as having one of the most restrictive foreign direct investment of any of the countries the OECD indexes, with countries such as Russia, Indonesia, Brazil, and South Africa calculated as being far more open to FDI than China.

Among the industries most protected from foreign direct investment are forestry, mining, electricity, telecommunications, and financial services.

Some US firms and corporations have noted that they remain hesitant to invest in China due to Chinese laws surrounding property and intellectual property rights, which may have limiting effects that US businesses may receive from their technology and brands.

Fortunately, positive change seems to be coming as US and Chinese relations seem to be headed in a good (and hopefully profitable) direction. First trade talks between the Chinese PresidentXi Jinping and US President Trump have started on friendly terms, with President Xi Jinping making moves to allow the US better access to financial sector investment and certain exports. The Communist Party has also stated in its Third Plenum decision that it will open more sectors to foreign investment and competition.

“We have a thousand reasons to get China-U.S. relations right, and not one reason to spoil the China-US relationship,” Xi said, according to state media.

China’s economy is also expected to continue to mature, though it is a process that will take time, notes Li Lu, founder of Himalayan Capital Management and a man described by Warren Buffett as one of the best investors alive. And as it does so those who choose to get in on the ground floor are more likely to see large dividends.

It is undeniable that US investment in China is a complicated area, requiring guidance from a team that is grounded in the laws and well-connected to government agencies