china practice

The Chinese-Israeli practice at Kolchinski law firm is designated to support Chinese companies operating in Israel or, vice versa, Israeli companies seeking to operate in China.

Conglomerates of Israeli companies or entrepreneurs that wish to be represented in the Chinese market or Chinese companies that are interested in breaking into the Israeli market and broadening their scope of operations in the local market.

Israeli companies that are interested in breaking into the Chinese market but are hindered from operating in China due to business and legal environments which differ from that of Israel.

For example, in the past a contract was considered non-binding but today, the guarantor is the basis for transactions in the East, and the Chinese grasp the importance of legal assurance.

From the experience that the Kolchinski law firm has acquired through legal consultation and through the representation of Israeli companies in China and vice versa, “the contract”, is key to proper management of partners or Chinese companies and the preparation of the correct contract significantly reduces the chances of unnecessary disputes.

In the event that a dispute occurs, the contract bolsters the abilities of the foreign company to enforce its rights within the Chinese legal system, which places heavy emphasis on formal requirements, and does not favor parties lacking documents.

Following are several guiding principles in the preparation of a contract:

In contrast to Israeli practices, the Chinese are not accustomed to penning long contracts.

The typical Chinese contract includes a description of obligation and terms of the transaction, while allowing for a certain extent of flexibility for future terms that may be agreed upon by both parties.

Generally, contracts are penned in two languages – English and Mandarin – from the first draft while the negotiations take place concurrently on both versions of the contract, and thus the accuracy of the translation is extremely important.

Inaccurate or unprofessional translation may lead to differing conceptions with regards to the agreement, whereby the Chinese courthouse tends to rely on the Chinese wording instead of the English version.

The identity of the legal entity through which one communicates is extremely important.

Chinese businessmen operate frequently through several companies based in China and in Hong Kong, due to tax and other considerations. It is essential to understand which company within the group carries out the terms within the contract and designate it as a participating party in the contract.

External arbitration may be enforced in China; however, the process may be long and tedious. Hence, in cases where the value of the transaction is not especially high, the best option would be to set legal authority with the Chinese courthouse and implement Chinese laws within the contract.

There are myriad possibilities and implications for Chinese clients that invest in Israel and Israeli clients that invest in China. Our vision is to serve as a significant and indispensable component in Israeli operations in China and provide credible, moral, and efficient guidance to our clients.