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Dear readers,

In this issue of PTL Group B2B China News you'll read about: 

An interview with PTL Group’s HR & Admin Manager-Jasper Zhang. Jasper tells you what you need to know about HR management in China. Firing an employee is not as easy as you thought and we will interpret the termination terms in China. The process of setting up a WFOE in China has become easier, whereas  the second draft of China Cybersecurity law has  been completed and it will have a big impact on foreign companies.
We also have the honor to include one contribution from Zachi Lichtblau, Principal Consultant at Bonnard Lawson Law Firm. Zachi introduces China’s New Transfer Pricing Rules. Enjoy reading!

HR Management Can Be Tricky in China
Interview with PTL Group HR & Admin Manager--Jasper Zhang


Q: What do newcomers and foreign companies coming to China need to learn before they start to hire employees here? 
A:I think that there are two things foreign companies need to learn before they start to recruit their local employees: the Chinese Labor Contract Law and the C&B (Compensation & Benefit) system. For the C&B system in China, foreign employers should keep in mind that, conventionally, Chinese employees will always ask for something more than gross salary, e.g. a transportation allowance. So when checking with a Chinese candidate what their current income is remember to also ask about the salary package on top of the gross salary. In addition, you also need to understand the social benefits and housing system in China. Read more

Termination Terms Under the Chinese Labor Contract Law

  Scenario Conditions
The Employer and the Employee agree to terminate a contract
They use a Settlement Agreement to agree on the conditions of the termination.
  • The notice period and the compensation have to be negotiated between both of the parties.
  • Severance payment must be paid if the one proposing to terminate the contract is the Employer. 
There are several forms needed to end a labor contract in China and each one of them has its own set of terms and rules; how the employer can end the contact, how the employee may quit, and how the severance payment should be calculated. Read more

Cybersecurity Law in China
What impact it will have for foreign companies?

In July 2015 the National People’s Congress (NPC) proposed the first draft of a so called Cybersecurity Law and this year, just one year later, the second draft was submitted. Many global companies, especially those operating in the technology sector, are concerned about passing this law because they believe it will limit their operational powers within China.   Read more

WFOE Set-up in China
Changes in regulations

Doing business in China is becoming easier and more appealing for foreign companies now that the WFOE set-up process has been simplifiedIn early September a new set of rules were released to ease the burden on the business environment within China by reducing bureaucracy and increasing transparency.  Read more

China's New Transfer Pricing Rules
By Zachi Lichtblau at Bonnard Lawson International Law Firm

On the 13th of July 2016 China's State Administration of Taxation (‘SAT’) released Bulletin 42 that contains the new transfer pricing documentation rules. Since it will have a far-reaching impact on taxpayers, it is of great importance to be aware of the content and effects of these (partly) new rules. In principle, all multinational companies engaged in cross-border, related-party transaction can expect to be significantly affected by the transfer pricing documentation requirements in Bulletin 42. Read more

Which Class Do You Belong To?
China is testing a new work permit system that ranks foreigners

On November 1st  of this year, the Chinese government introduced a new work permit system that categorizes foreigners into “classes”. Under this system the “Alien Employment Permit” and “Foreign Expert Certificate” are combined to create a “Foreigner`s Work Permit” (FWP), which looks a lot like the Chinese ID card. The work permit will display an identification number, a photo and the name of the individual effectively replacing the passport for tasks such as purchasing train tickets. Read more

Upcoming Exhibitions in Shanghai

December 15-17
January 11-13

About us

“PTL Group is a sales and distribution incubator, and fulfillment logistics provider for SMEs entering China. As a strategic partner, PTL Group supports companies selling advanced technology products in B2B markets by providing managment services and operational infrastructure to its clients. Offering the Managment-in-Trust business model, PTL Group supports companies in different stages of their penetration into the market.

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