China: 3 New Laws That Will Impact Foreign Businesses

Companies considering China expansion should be aware of legal changes that may impact their growth plans, according to INS Global.

The new year is just beginning, and 2023 has already seen numerous laws and regulations come into effect in China. If your company is doing business in China, it’s critical for your organization to have a full understanding of these changes that may affect operations or plans for expansion into the country.

Shanghai, China expansion
Shanghai, China (Photo: Adobe Stock by TTstudio)

Here are three examples of new laws that could impact businesses in China, courtesy of INS Global:

  • New Data Security Measures: New guidelines instruct businesses on how they can gather, manage and process data. All businesses offering software and information technology services are subject to the new Trial Measures.
  • Women’s Rights in the Workplace: The revised Women’s Protection Law includes provisions for recruitment and employer’s obligations in the workplace. This includes specific questions you can’t raise in interviews such as the marital status of a woman or whether she may be pregnant. There are as many as 30 new provisions that companies need to abide by and train hiring managers for.
  • Tariff Adjustment Plans: Changes to import and export tariff rates could have a huge impact on certain businesses including IT products, infant food and certain electric appliances. New regulation have resulted in tax adjustments to as many as 8,948 items. Companies that fail to update accounting practices for these changes could face penalties or even court cases, depending on the sector.

The Year of the Rabbit

The Year of the Rabbit, which began on January 22, favors speed and agility. Businesses that act quickly and take advantage of China reopening after lengthy Covid-19 shutdowns will be rewarded with opportunity, according to INS Global. Typically, setting up a new business in China can take two to six months but delays often happen due to licenses or new regulations.

Many foreign-owned companies expanding to China are opting to work with a Professional Employer Organization (PEO) like INS Global that has experience and expertise in compliance in China, and can setup businesses in a matter of days.

“Change is a way of life in China’s business culture,” said Wei Hsu, Managing Director of INS Global. “Companies looking to capitalize on opportunity now that Covid restrictions have loosened need to understand how changing laws and regulations may affect their expansion plans. We know the China market inside and out, and are able to keep our clients apprised about changes that may either put them at risk or offer a big competitive advantage.”

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