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China-ASEAN Investment and Trade Legal Policy Guidelines Released


Chongqing - On May 23, the 6th Western China International Fair for Investment and Trade (WCIFIT) witnessed the release of the China-ASEAN Investment and Trade Legal Policy Guidelines. 

The guidelines introduce the laws, regulations, and policies of China and ASEAN countries regarding foreign investment, including investment access, foreign exchange, fiscal and tax policies, legal systems, and investment restrictions. This guide aims to help enterprises prevent legal risks in cross-border investments.

Rebecca Chew, Co-Head of China-Related Investment Dispute Resolution and Chairperson of the Rajah & Tann Foundation discussed how these guidelines benefit Chinese enterprises, especially those expanding into Southeast Asia.

Chew highlights that Rajah & Tann's clients, often Chinese enterprises aiming to expand into Southeast Asia, need unique, tailored solutions for their specific infrastructure and business models. For example, an electric vehicle company like SERES must carefully strategize its market entry.

"I think the first thing they should think about is what kind of structure and mode they are approaching this eventual overseas," said Chew. Different Southeast Asian regions have distinct laws, regulations, and requirements for foreign investors. Understanding these nuances is crucial for successfully setting up an entity in any local region.

Understanding local employment laws is critical for companies setting up manufacturing plants. Chew emphasizes the need for a deep comprehension of the regional legal framework when engaging a significant local workforce.

"You are going to be able to engage a large amount of local employment," she explained. "You need to understand local laws." Rajah & Tann's extensive presence in Southeast Asia provides the local knowledge needed to guide clients through complex employment regulations, ensuring they effectively navigate challenges and avoid legal pitfalls.

Chew also underscored the importance of understanding local culture. She noted, "It's not just about law and compliance. It's understanding what culture is, what makes the local businesses tick in the region."

Cultural competence is vital for success in a new market. Engaging local law firms and leveraging their expertise provides insights into cultural dynamics, helping businesses build stronger relationships and integrate smoothly into the local environment.

Wang Dan, a lawyer at Chongqing Jingsheng Law Firm, shared insights on how Chinese enterprises can navigate challenges and take initial steps in foreign investments.

"As local professionals, we should make efforts to defend the global principles, free trade, free investment, free data flow, and free fund flow," stated Wang. Upholding these principles is crucial for fostering a conducive climate for international business and reducing entry barriers.

ASEAN was China's largest trading partner in the first four months of this year, with trade totaling 2.18 trillion yuan, up 8.5%, accounting for 15.8% of China's total foreign trade.


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