WHILE CHINA LEADS the world in attracting foreign direct investment (FDI), the legal and regulatory environment confronting international investors remains complex and, all too frequently, subject to a great deal of misinformation.
'We still get calls from people who assume you must come to China in the form of a joint venture if you are setting up an FDI project, despite the fact that international investors have been able to go it alone for many years in most industries,' said Jeremy Sargent, a partner in the Guangzhou office of law firm Stephenson Harwood & Lo.
'There is so much information about investing in China, and while some of it is accurate, a lot of it is not,' he said.
One of the most important legal issues that any foreign investor had to confront was where to set up operations, Mr Sargent said.
'If somebody is coming to China to set up an FDI project, depending on the industry they are in and whether it's their first project or they are seeking to expand an existing investment, the main legal issue is location. China is a big country, and even from a legal perspective it needs to be seen as a collection of separate markets.'
The presence of special economic zones or investment areas adds yet another layer of complexity to the location decision.