The Regulations on the Management of Representative Offices set up by Foreign Law Firms in China

were endorsed by the 51st executive meeting of the State Council on 19 December 2001. The Regulations are promulgated today and shall take effect from 1 January 2002.
Premier Zhu Rong-ji 22 December 2001 Regulations on the Management of Representative Offices
set up by Foreign Law Firms in China

Chapter 1 General Provisions

Article 1 These Regulations are formulated to regulate the establishment and the provision of legal services of resident representative offices of foreign law firms in China in accordance with the Law of the People’s Republic of China on Lawyers.

Article 2 These Regulations are applicable to the resident representative offices of foreign law firms in China (hereinafter referred to as ‘resident representative offices’) which engage in the provision of legal services.

Article 3 When engaging in the provision of lega l services, a resident representative office and its representatives shall abide by laws, regulations and rules of China, and comply with the professional ethics and the code of practice of Chinese lawyers and shall not endanger the national security of China and the public interests of the society.

Article 4 A resident representative office and its representatives acting in accordance with these Regulations in engaging in the provision of legal services shall be protected by the Chinese laws.

Article 5 A foreign law firm shall bear civil liability arising from the provision of legal services within Chinese territory by its resident representative offices and its representatives.

Chapter 2 The establishment, change and cancellation of registration of a resident representative office

Article 6 A resident representative office and its representatives of a foreign legal firm shall be approved by the judicial administrative department under the State Council A foreign law firm, a foreign organization and a foreigner shall not engage in the provision of legal services in the name of a consultancy or otherwise within Chinese territory.

Article 7 A foreign law firm applying for the establishment of a resident representative office and the stationing of representatives shall satisfy the following conditions:

(1) The foreign law firm is in lawful practice in its home country and has not been punished for any professional misconduct or any violation of the code of practice.

(2) The representative of the resident representative office shall be a practising lawyer and a member of its home country’s lawyers’ association and has been in practice for not less than two years outside Chinese territory and has never been punished for any criminal offence or any professional misconduct or any violation of the code of practice.
Among them, the chief representative shall be in practice for not less than three years outside Chinese territory and is a partner or a holder of an equivalent post in the foreign law firm; and

(3) The foreign law firm has the genuine need to establish a resident
representative office in China.

Article 8 To apply for the establishment of a resident representative office, a foreign law firm shall submit the following documents and materials to the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government where the
resident representative office is to be located:

(1) an application for establishing the resident representative office and the stationing of representatives signed by the principal responsible person of the foreign law firm. The name to be adopted by a resident
representative office in China shall be “The Resident Representative Office of XX Law firm (the Chinese translation of the name of the original law firm) in XX (name of city in China).”

(2) documents certifying that the foreign law firm is lawfully established in its home country;

(3) the partnership agreement or the charter of the foreign law firm and a name list of its responsible persons and partners;

(4) a letter of authorization appointing the representatives designate of the resident representative office and documents confirming that the chief representative designate of the resident representative office is a
partner of or a holder of an equivalent post in the foreign law firm;

(5) documents certifying the practicing qualifications and practising periodof the representatives designate of the resident representative office: at least three years for chief representative designate and at least two
years for other representatives designate outside Chinese territory;

(6) documents issued by the lawyers’ association of the country where the foreign law firm is located to certify that the representatives designate of the resident representative office are members of the association; and

(7) documents issued by a lawyers’ regulatory body of the country where the foreign law firm is located to certify that neither the law firm nor the representatives designate have been punished for criminal liability
or for any professional misconduct or any violation of the code of practice. Documents and materials required to be submitted in the preceding paragraph shall be notarized by notary authorities or notaries public of the applicant’s country and legalized by the foreign ministry or a body authorized by the foreign
ministry of that country as well as the embassy (or the consulate) of the People’s Republic of China in that country. Documents and materials submitted by the foreign law form shall be in triplicate. Where they are in a foreign language, Chinese translations shall be provided.

Article 9 The judicial administrative department of the people’s government of a province, autonomous region and municipality directly under the Central Government shall complete examination of the documents and materials submitted within three months on receipt of the documents and materials and submit them together with comments of the examination to the judicial administrative department under the State Council for approval. The judicial administrative department under the State Council shall make a decision within six months. Where approval is given to a foreign law firm to establish a resident representative office, the judicial administrative department under the State Council shall issue a practice
licence to the foreign law firm and practice certificates to its representatives. Where approval is denied, a written notice of the reasons for the denial shall be given.

Article 10 A resident representative office and its representatives shall bring along the practice licence and the practice certificates to the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government where the resident
representative office is to be located to complete the registration formalities before it can commence the provision of legal services under these Regulations. A resident representative office and its representatives shall register annually.

The judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government shall complete the registration formalities within two days on receipt of the registration application.

Article 11 A resident representative office shall complete the relevant taxation, banking and foreign exchange formalities in accordance with the relevant laws and administrative regulations.

Article 12 Where a foreign law firm intends to change the name of its resident representative office or reduce the number of its representatives, it shall submit an application signed by its principal responsible person together with relevant documents and materials to the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government where the resident representative office is located for approval by the judicial administrative department under the State Council . After approval, the practice certificate(s) of the personnel who is/are no longer a representative(s) of the resident representative office shall be withdrawn. Any amalgamation or division of a resident representative office or the appointment of new representative shall obtain the approval in accordance with the provisions under these Regulations in respect of the establishment of a resident representative office.

Article 13 The judicial administrative department under the State Council shall withdraw its approval and withdraw the practice certificate issued to a representative of a resident representative office and the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government shall cancel his registration accordingly in any of the following circumstances:

(1) His practice licence in his own country has been revoked;

(2) He has been disqualified by the foreign law firm to which he belongs to be a representative; or

(3) His practice certificate or the practice licence of the resident representative office to which he belongs has been revoked.

Article 14 The judicial administrative department under the State Council shall withdraw its approval and withdraw the practice certificate issued to a resident representative office and the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government shall cancel its registration accordingly in any of the following circumstances:

(1) The foreign law firm its represents has been dissolved or its registration cancelled;

(2) The foreign law firm its represents has applied for the cancellation of registration of the resident representative office;

(3) It can no longer satisfied the requirements under Article 7 of these Regulations; or

(4) Its practice certificate has been revoked in accordance with the law.

A resident representative office whose registration has been cancelled pursuant to the preceding paragraph shall go into liquidation in accordance with the law and shall repay all its debts before its assets can be transferred out of Chinese territory.

Chapter 3 Scope of Operations and Regulation

Article 15 A resident representative office and its representatives may engage in the following businesses not involving Chinese law;

(1) provides to its clients legal advice regarding the laws of the countries where the lawyers of the foreign law firm are allowed to engage in the provision of legal services, as well as advice on international
conventions and international practices;

(2) accepts instruction from its clients or a Chinese law firm to handle the legal affairs in the countries where the lawyers of the foreign law firm are allowed to engage in the provision of legal services;

(3) engages, on behalf of its foreign clients, a Chinese law firm to handle affairs involving Chinese laws;

(4) provides any legal services through a long term entrustment agreement with a Chinese law firm; and

(5) provides information relating to the impact on Chinese law environment.

Acting on the agreement signed with a Chinese law firm, a resident representative office or its representatives may make direct contact with the lawyers of the entrusted Chinese law firm. A resident representative office and its representatives may not engage in other legal services or any other business operations other than those stipulated in sections (1) and (2) of this Article.

Article 16 A resident representative office shall not hire practising Chinese lawyers and the paralegals under its employ shall not provide legal services to its clients.

Article 17 A resident representative office and its representatives shall not behave in the following ways during its course of business:

(1) makes false testimony or conceals the facts or threatens or lures others to make false testimony or conceal the facts and obstructs the clients of the opposing party to lawfully obtain evidence;

(2) demands property or other benefits from its clients in the course of providing legal services; or

(3) leaks without authorization the commercial secrets or personal data of its clients.

Article 18 A representative of a resident representative office shall not assume or take up the post of representative in more than two resident representative offices at the same time.

Article 19 A representative of a resident representative office shall reside in the Mainland China for not less than six months in a year. If his period of residence is less than six months, he shall not be allowed to register the following year.

Article 20 A resident representative office may charge its client a fee for providing legal services stipulated in these Regulations but the fee shall be settled in Chinese territory.

Chapter 4 Supervision and Management

Article 21 The judicial administrative department under the State Council and the judicial administrative department of the people’s government of the province, autonomous region or municipality directly under the Central Government shall be responsible for the supervision and regulation of a resident representative office and its representatives.

Article 22 A resident representative office shall be subject to a yearly examination by submitting its practice licence and copies of practising certificates of its representatives and the following materials in respect of the position of the previous year to the judicial administrative department of the people’s government of
the province, autonomous region and municipality directly under the Central Government where the office is located on or before 31 March each year:

(1) the provision of legal services including the provision of legal services by the Chinese law firm it instructed;

(2) its annual accounts audited by an accounting firm and supporting documents for the settlement and tax payment within Chinese territory;

(3) the change in its representatives and the employment of Chinese paralegals;

(4) the period of residence within Chinese territory of its representatives;

(5) the registration of the resident representative office and its representatives; and

(6) any other information relating to the fulfillment of obligations under these Regulations.

After the yearly examination, the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government shall submit its comments on the examination of the resident representative offices under its jurisdiction to the judicial administrative department under the State Council for recording purposes.

Article 23 The judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government shall follow strictly the scale fees for Chinese law firms and practising lawyers endorsed by the price administrative department under the State
Council in collecting the registration fees and yearly examination fees from the resident representative office and its representatives. The fees thus collected shall be remitted to the national treasury in full.
In imposing administrative fines as provided in the laws, the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government shall act in accordance with the relevant laws and administrative regulations and appoint different authorities for the fine decision and the collection of fine. Fines thus collected and illegal proceeds confiscated under the law shall be remitted to the national treasury in full.

Chapter 5 Legal Liability

Article 24 A resident representative office or its representatives whose acts have endangered the national security or public security or disrupted the order of social administration of China shall be pursued for criminal liability according to the crimes of endangering the national security or public security or disrupting the order of social administrative of the Criminal Law and the judicial administrative department under the State Council shall revoke the practice licence of the resident representative office or the practicing certificates of its representatives. If the criminal penalty is not sufficient, public order administrative penalty shall be imposed in accordance with the law and the judicial administrative department under the State
Council shall revoke the practice licence of the resident representative office or the practising certificates of its representatives.

Article 25 Where a resident representative office or its representatives contravenes Article 15 of these Regulations to engage in the provision of legal services or any other business activities not authorized by the law, the judicial administrative department of the people’s government of the province, autonomous
region and municipality directly under the Central Government shall order cessation of business at a specified date; where the case is of a serious nature, the judicial administrative department under the State Council shall revoke the practice licence of the resident representative office or the practising certificates of its representatives. Illegal proceeds from acts contravening the preceding paragraph shall be confiscated by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government and the chief representative and other representatives directly responsible shall each be fined not less than 50,000 yuan and not more than 200,000 yuan.

Article 26 Where a resident representative office commits any of the following, a warning and an order for rectification within the specified period shall be issued by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government; where the case is of a serious nature, cessation of business on a specified date shall be
ordered by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government and its practice licence shall be revoked by judicial administrative department under the State Council if no rectification is effected after the specified period:

(1) employs practising Chinese lawyers or paralegals to provide legal services;

(2) fails to have the fees charged for provision of legal services settled in Chinese territory; or

(3) fails to submit materials on time for the yearly examination or fails in the yearly examination.

In the event of contravention of section (2) of the preceding paragraph, a fine of not less than 100 per cent and not more than 300 per cent of the amount which should be settled within Chinese territory shall be imposed.

Article 27 Where a resident representative office commits any of the following, a warning shall be issued and confiscation of illegal proceeds made by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government; where the case is of a serious nature, cessation of business on a specified date will be ordered and a fine of not less than $20,000 yuan and not more than 100,000 yuan shall be imposed:

(1) assumes or take ups the post of representative in more than two resident representative offices at the same time;

(2) leaks without authorisation the commercial secrets or personal data of its clients; or

(3) demands property or other benefits from its client in the course of providing legal services.

Article 28 A resident representative office whose registration has been cancelled transfers its assets out of Chinese territory before the repayment of all of its debts shall be ordered by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government to return its transferred property in settlement of its debts. If the case of causing great damage to others’ interests, its chief representative and other personnel directly responsible shall be pursued for criminal liability according to the crime of concealment of property of the Criminal Law. If the criminal penalty is insufficient, the judicial administrative department of the people’s government of the
province, autonomous region and municipality directly under the Central Government shall impose a fine of not less than 50,000 yuan and not more than 300,000 yuan on the resident representative office and a fine of not less than 20,000 yuan and not more than 100,000 yuan on the chief representative and personnel directly responsible.

Article 29 A representative of a resident representative office who makes false testimony, conceals the facts or threatens or lures others to make false testimony or conceal the facts shall be pursued for criminal liability according to the crime of obstructing the giving of evidence of the Criminal Law and shall have his practice certificate revoked by the judicial administrative department under the State Council.

Article 30 A foreign law firm, a foreign lawyer or a foreign organisation or a foreigner engaging in legal services within Chinese territory without authorization or a resident representative office or its representatives whose practice permission has been withdrawn engaging in legal services within Chinese territory shall be banned by the judicial administrative department of the people’s government of the province, autonomous region and municipality directly under the Central Government and has the illegal proceeds confiscated with a fine of not less than 50,000 yuan and not more than 300,000 yuan.

Article 31 A foreign law firm whose resident representative office’s practice licence has been revoked in accordance with the law shall not be allowed to apply to establish a resident representative office in China within five years. A representative of a resident representative office whose practice certificate has been
revoked in accordance with the law shall not become the representative of a resident representative office in China within five years.

A foreign law firm which has a resident representative office representative punished under the law for endangering China’s national security or public security or disrupting the order of social administration shall not apply again to establish a resident representative office in China and the relevant representative shall not become the representative of a resident representative office in China again for the rest of his life.

Article 32 Any work personnel of a judicial administrative department who commits any of the following shall be given administrative punishment of a demerit or a serious demerit recorded or demotion by his responsible supervisor or other direct supervisor:

(1) fails to act in accordance with these Regulations in examining or approving the supporting documentation or materials submitted by the soon to be opened resident representative office or its representatives designate;

(2) fails to act in accordance with these Regulations in registering and annually examining the resident representative office ; or

(3) fails to collect fees in accordance with the fee-collecting items and scale fees prescribed by the Chinese government.

Article 33 Any work personnel of a judicial administrative department who commits any of the following shall be given administrative punishment of demotion, removal from office or dismissal by his responsible supervisor or other direct supervisor:

(1) decides to issue a practice licence or practice certificates to a soon to be opened resident representative office or its representatives designate not able to comply with these Regulations;

(2) demands property or make personal gains in the course of carrying out his duties;

(3) contravenes these Regulations and does not revoke or withdraw the practice licence or practice certificates of the resident representative office or its representatives whose practice approval should be
withdrawn or does not cancel the registration of those whose licence registration should be cancelled;

(4) collects a fine under the law but does not issue a receipt for the fine collected or does not state the amount collected accurately;

(5) fails to assign separate authorities for the decision to impose a fine and the collection of fine or does not remit to the national treasury in full the fees or fines collected or illegal proceeds confiscated under the law
as required;

(6) fails to investigate and punish timely any act by a resident representative office or its representatives for contravening these Regulations; or

(7) causes serious consequences by not enforcing the law vigorously or by abusing its powers.

Any offence under the preceding paragraph which causes serious losses to public property, interests of the state and the people shall be pursued for criminal liability according to the crimes of abusing one’s powers, serious irresponsibility or bribery of the Criminal Law.

Chapter 6 Supplementary Provisions

Article 34 The judicial administrative department under the State Council shall promulgate separate management practices in respect of the establishment of resident representative offices in the Mainland by law firms from separate customs territories within China along the principles underlying these Regulations.

Article 35 These Regulations shall come into force on 1 January 2002.
Resident representative offices and their representatives in practice prior to the promulgation of these Regulations with permission from the judicial administrative department under the State Council shall re-apply for examination and approval within 90 days from the enactment of these Regulations.