Legal Services Legal Services Industry-Specific Issues Introduction F oreign law firms and lawyers have valuable legal and commercial expertise and experience from which companies and individuals in China benefit. Since the early 1980s, working with their Chinese counterparts in the government, academia and law firms, foreign law firms and lawyers have made substantial contributions to the development of legal institutions and practice in China. Yet international law firms in China still face a wide range of market access constraints, including: (1) the inability to provide comprehensive legal services to their clients; (2) a prohibition against participating in certain meetings in certain government departments involving their clients; (3) an unnecessarily difficult, delayed and unpredictable registration process for the establishment of representative offices (or the opening of new ones); (4) unfavorable tax policies; and (5) other operational restrictions (discussed below). China s continued restrictions in this sector hurt both Chinese and foreign companies seeking legal advice and counsel, and deprive Chinese citizens of the opportunity to work for, or become principals in, many international law firms. Moreover, the current restrictions impede the development of the Chinese legal market to international standards and result in the unwillingness of many foreign investors to use Chinese law as the governing law of contracts or to submit themselves to the jurisdiction of Chinese courts or arbitration tribunals for dispute resolution. All of these restrictions are inconsistent with not only the increasingly global nature of the legal services business, but also with the general principle of reciprocity, particularly when compared to the practices of most of China s significant trading partners, which allow Chinese law firms to establish full service law firms in their jurisdictions. AmCham-China urges the Chinese government to ease market access restrictions on foreign law firms and increase employment and business opportunities for Chinese lawyers. China, where they hire foreign lawyers and practice law in foreign jurisdictions. This trend is consistent with the demands of the increasingly global nature of their clients business needs. PRC law firms growth abroad is also largely not subject to protective trade barriers that restrict their ability to practice law. In the US, Japan and the EU, Chinese law firms are able to establish offices, hire local lawyers and engage in comprehensive corporate law and litigation services. The clear trend around the world is to open domestic legal services markets to participation from international law firms, including most recently in South Korea. At the same time, foreign law firms continue to be subject to new barriers in China (as discussed below in the Issues section) and continue to find it difficult even to open an office to offer restricted legal services. Foreign law firms also are increasingly losing access to talented lawyers, both Chinese and foreign due to the practice restrictions. Specific Issues Limited Scope of Practice for Chinese Lawyers in Foreign Firms International law firms remain unable to hire or be owned by qualified PRC lawyers with active PRC law licenses in China. Under current regulations, any PRC national who possesses a national license to practice law in China, but who wishes to join the office of a foreign law firm in China, must first surrender his or her license to the PRC Ministry of Justice and may not practice PRC law. This rule applies to all foreign law firms which open a representative office in China, including those from the US, EU, Japan, Canada and Australia. Removing this prohibition would expand employment opportunities for Chinese law students and lawyers, while enhancing foreign law firms capacity to represent clients doing business in China as well as Chinese companies looking to expand their global commercial and investment activities. Significant Developments PRC law firms continue to open law offices outside of International law firms provide the integrated, seamless service across different areas of law and jurisdiction that multinational companies often require. Giving Chinese 296 2011 White Paper AmCham-China
具 法律服务 业问题法律服务 引言 外国律师事务所及其律师在法律与商业方面拥有宝贵的专长和经验, 中国的企业和个人均可从中受益 自 1980 年代初以来, 外国律师事务所及其律师与中国政府 学术界及律师事务所中的法律同行相互协作, 为中国法制的发展和实践做出了相当的实质性贡献 然而, 目前国际律师事务所在中国仍面临着各式各样的市场准入限制, 其中包括 :(1) 无法为其客户提供全面综合性的法律服务 ;(2) 无法参加由某些政府部门举行的涉及其客户参与的某些会议 ;(3) 登记设立代表处 ( 或开设新办事处 ) 时遇到的不必要的困难 拖延或者其他无法预见的程序问题 ;(4) 不利的税收政策 ;(5) 其他经营限制等等 ( 详见下文讨论 ) 这些持续存在的针对外国律师事务所的市场准入限制, 不仅妨害了中外国公司获取完整及充分的法律意见, 更剥夺了中国公民获得在国际律师事务所的工作和升迁机会 此外, 现有限制还阻碍了中国法律市场向国际同行业标准看齐的发展道路, 导致很多外国投资者不愿意在合同条约中适用中国法律, 或者不愿将争议纠纷提交至中国法院和仲裁庭, 受中国法律管辖 这些限制不仅与日益增长的全球性法律服务业务相违背, 相比较作为中国重要贸易伙伴的其他一些国家的做法, 这一做法也不符合互利互惠原则 作为中国重要贸易伙伴的这些国家都允许中国的律师事务所在其区域内设立可提供全方位法律服务的代表处或办事处 中国美国商会敦促中国政府放宽针对外国律师事务所的市场准入限制, 以提升中国律师的就业和从业机会 重大进展 随着中国律师事务所越来越多地在海外开立办事处, 他们更多地在当地招聘外国律师, 并在当地司法管辖区内执业 这种趋势与其客户日益增长的业务全球化的需求相 一致 中国律师事务所在海外得以快速成长, 很大程度也依赖于当地政府未出台限制或制约中国律师执业能力的贸易壁垒保护政策 在美国 日本和欧盟, 中国律师事务所均能够成立办事处 聘请当地律师 以及提供全面的公司业务法律咨询和诉讼服务 在世界其他国家, 包括最近在韩国, 都已经在逐渐开放国内的法律服务市场, 使国际律师事务所能参与进来 与之相反, 外国律师事务所在中国的发展却仍然受制于种种贸易新壁垒 ( 参见下文具体问题部分的讨论 ), 甚至仍然处于开设一家办事处并提供有限的法律服务都还会面临各式各样的困难的窘境之下 因为执业限制, 外国律师事务所正在不断失去有才华的中外律师 具体问题中国律师在外国律师事务所的执业范围受限 国际律师事务所既不能在中国聘请持有有效律师执照的中国执业律师, 也不能由中国执业律师所有和经营 依据现有法律法规, 任何拥有中国律师执照 并在中国执业的中国公民, 如果要加入在华外国律师事务所, 必须首先放弃执业并向中国司法部上交其律师执照, 不得再从事中国法律业务 该规定适用于所有在中国开设代表处的外国律师事务所, 包括那些来自美国 欧盟 日本 加拿大和澳大利亚的律师事务所 取消该项限制将会扩大中国的法律专业学生和中国律师的就业机会, 同时也能提高外国律师事务所为其在华开展业务的国外客户和寻求扩大国际商业与投资活动的中国客户提供法律服务的能力 国际律师事务所提供的是一体化的 涉及不同法律部门和不同司法管辖区域之间的法律服务, 这通常是跨国企业所需要的 如果中国公司也有机会获得此类法律服务, 其主要的公司法律顾问将能够与来自世界各地的法律专家 体行 AmCham-China 2011 White Paper 297
Legal Services companies access to such legal services would allow them to expand more efficiently and successfully by enabling them to integrate their principal Chinese counsel with a worldwide team of legal specialists. In addition, removing the prohibition on foreign firms hiring of PRC lawyers would expand the pool of PRC lawyers with relevant experience and training available for domestic firms or companies to hire as in-house corporate counsel or in other positions requiring specialized legal backgrounds. AmCham-China recommends that China revise current regulations to allow foreign law firms to provide comprehensive legal services to their clients through qualified PRC lawyers. Restricted Appearance Before Government Agencies delays. The application process for establishing an office can and should be substantially streamlined. Furthermore, a foreign law firm must wait three years after establishing a representative office before opening another, thus limiting the growth of foreign law firms. Foreign firms have reported substantial difficulties and delays in the processing of these applications. This impairs the ability of foreign firms to serve clients and provide much-needed global services to Chinese companies, particularly in interior provinces which are key targets of the 12th Five-Year Plan for economic development. AmCham-China urges the Chinese government to simplify the requirements, eliminate the unpredictability and reduce the review period for the establishment of representative offices as well as the opening of additional offices. Industry-Specific Issues Foreign lawyers are also currently barred from participating in certain types of meetings in certain government departments involving their clients. Without complete freedom to determine the composition of their own legal teams in meetings with Chinese government officials, foreign clients are thus limited in their ability to understand government proceedings and their context. There is no similar restriction, to the best of our knowledge, in any other leading economy. Furthermore, the restriction is inconsistent with the right of foreign law firms to provide advice regarding the Chinese legal environment, a right that is laid out in China s Protocol of Accession to the World Trade Organization (WTO) as well as in State Council regulations. This creates an uneven playing field and fosters the impression that the Chinese government engages in arbitrary and discriminatory treatment with respect to foreign companies as their legal counsel is barred from proceedings. AmCham- China urges the Chinese government to clarify in regulations that foreign lawyers are permitted to participate in meetings between their clients and Chinese government departments. Burdensome Representative Office Registration Representative offices of foreign law firms face tighter scrutiny and more burdensome regulatory approval procedures than their domestic counterparts. When applying to establish a representative office, a foreign law firm must demonstrate a need to establish a representative office to start legal service operations. Authorities evaluate such needs based, in part, on the social and economic development conditions of the proposed location, the development needs for legal services in such location, and other similarly vague considerations. Discriminatory Taxation Treatment Representative offices of foreign law firms are subject to higher and more burdensome PRC taxes than domestic law firms carrying out the same activities. A foreign firm in China potentially suffers double taxation on its profits while a domestic firm only experiences one level of taxation and enjoys a lower rate of taxation as well. This is because foreign law firms are prohibited from organizing in the form of partnership enterprises or being treated for PRC tax purposes as partnership enterprises. As a result, a foreign law firm pays taxes twice: once on profits and a second time on repatriations of after-tax profits. In addition, the rate of taxation imposed is strikingly higher than the rate applicable to domestic firms. The income received by a partner in a local PRC firm in Beijing is subject to taxes totaling 14.25 percent which includes the PRC business tax (i.e., the turnover tax imposed on services in addition to income taxes) which is waived or reduced to 3 percent on certain types of revenue. The income of a foreign lawyer is subject to 5.5 percent PRC business tax, 25 percent income tax payable by the representative office on gross office income and personal income tax subject to progressive brackets that rise quickly to 45 percent. The tax differential is significant. To address this inequity and comport with the principles of non-discrimination in the US-China tax treaty, AmCham- China recommends that China treat foreign law firms as pass-through entities for income tax purposes at rates equal to those of domestic law firms and equalize their business tax rates with domestic law firms. Other Market Access Problems These opaque, undefined conditions unnecessarily lengthen the approval process, as do many other overly complicated processing requirements. Moreover, the timing of an approval is unpredictable and often subject to protracted In addition to the problems described above, foreign law firms face a number of other restrictions and regulatory burdens that impair their ability to operate in China. These include: (1) an unnecessarily difficult process to change 298 2011 White Paper AmCham-China
具 法律服务 业问题组成的团队一同合作, 从而使该公司实现更高效 更成功的业务扩张 此外, 如果取消了外国律师事务所禁止聘用中国律师的执业限制, 将会大大增加熟悉国外事务并具有相关经验的中国律师的数量, 使得国内企业能够聘请他们担任企业内部法律顾问或其他需要专业法律背景的职位 中国美国商会建议修改现有条例, 允许有从业资格的中国律师在外国律师事务所向客户提供全方位的法律服务 律师参与行政性的程序和会议受限 目前, 外国律师被禁止出席其客户参与的 由某些政府部门举行的某些行政程序或会议 外国企业由于无法自由选择律师团队参加与中国政府官员的会面, 因此造成对于有关行政性的程序及相关背景知识不能充分理解 据我们所知, 世界其他主要经济体均不存在类似的限制 此外, 此类限制与中国加入世界贸易组织议定书和国务院颁布的规章中所列明的外国律师事务所有权对中国法律环境影响提供咨询意见的规定不符 国外企业的律师顾问人员被禁止参与特定行政程序或会议的做法会催生不公平的竞争环境, 也会使人们产生政府有歧视性 差别对待国外企业的负面印象 中国美国商会因此敦促中国政府在法规中申明允许外国律师出席其客户参与的所有中国政府部门的行政性程序和会议 代表处设立注册程序繁琐 外国律师事务所的代表处面临比国内的同行业者更为严格的监管, 以及更繁琐的监管审批程序 一家外国律师事务所在申请设立代表处时必须申明 建立代表处从事法律服务业务的必要性 各政府机构对该 必要性 进行的评估部分基于拟议设立地点的 社会和经济发展状况 该地点提供法律服务的 发展要求 以及其他同样模糊的考量因素 这些缺乏透明度 定义不明确的审核条件与其他繁琐的程序要求一样, 将不必要地延长设立的审批流程 此外, 审批时间也难以预料, 通常久拖不决 因此设立办事处的申请流程可以且十分必要进行简化 此外, 外国律师事务所建立一个代表处后必须等待至少三年才能再开设另一代表处, 因此限制了外国律师事务所的发展 许多外国律师事务所已汇报了其在申请过程中面临着种种重大难题和拖延现象 这削弱了外国律师事务所服务其客户 和向中国客户, 尤其向 十二五规划 中 经济发展重点的内陆省份的中国企业, 提供急需进行的国际法律服务的能力 中国美国商会敦促中国政府简化设立要求 消除不可预测性 并缩短设立代表处以及开设新代表处的各种审核期 差别性税收待遇 与从事同样业务活动的国内律师事务所相比, 外国律师事务所代表处在中国缴纳的税收更高 更繁重 在华的外资企业极有可能受到对盈利额的双重征税, 而内资企业却能享受单次征税, 并可享受到较低的税率 这是因为外国律师事务所不允许组建为合伙企业, 或者在征税目的上不被视为合伙企业 从而导致外国律师事务所需两次缴税 : 第一次是针对企业利润, 第二次是针对税后利润的返回部分 另外, 所征收的税率也明显高于国内企业适用的税率 在北京的国内律师事务所合伙人的收入按照 14.25% 的税率缴税 其中包含的营业税 ( 即除所得税之外的针对服务征收的营业税 ) 按照不同类型的营业收入, 还可以享受免征或减征 3% 的营业税税率 而外国律师需要缴纳 5.5% 的营业税 按照代表处总收入的 25% 缴纳的所得税 以及由于累进税级可能造成的高达 45% 的个人所得税 为解决这种不平等并与 中美税收协定 各项非歧视性原则保持一致, 中国美国商会建议, 中国将外国律师事务所看作 传递实体 以实行缴纳所得税, 使其享受与国内律师事务所同样的所得税税率和营业税税率 其他市场准入问题 除上述问题之外, 外国律师事务所还面临很多其他限制和监管负担, 这削弱了他们在中国的执业能力 其中包括 :(1) 律所主要代表人的变更和外国律师的调任面临不必要的困难程序 ;(2) 不能或难以聘用外国非法律专业人士 ;(3) 外国律师工作签证期为一年的限制 ( 特别是主要代表人 ) 中国美国商会鼓励中国政府允许外国律师事务所聘请外国非律师专业人士, 完善主要代表人的注册和调动程序, 延长各代表的签证的有效时间 这样一来将会提高外国律师事务所在中国为中 外客户提供高效服务的能力 体行 AmCham-China 2011 White Paper 299
Legal Services the chief representative of a firm and for foreign lawyers to transfer firms; (2) inability to or difficulty in hiring foreign non-legal professionals; and (3) the limitation of one-year work visas for foreign lawyers (especially chief representatives). AmCham-China encourages China to allow foreign law firms to hire foreign non-legal professionals, improve the procedures for registering chief representatives and transferring representatives, and increase the length of time visas are valid for representatives. Doing so will improve foreign firms ability to effectively serve their clients, both foreign and domestic, in China. Conclusion Despite the remarkable opening of the Chinese economy following China s WTO accession and the resulting rapid economic growth, the legal services market in China remains largely closed to foreign law firm participants. In some respects, the ability of foreign law firms to work for their clients in China has become more restricted since China s entry into the WTO. Industry-Specific Issues Reciprocity is a key principle motivating a substantial portion of international trade and investment rules for the modern global economy. Actions on the part of the Chinese government to open the legal services market to foreign law firms would be consistent with global economic trends and would facilitate the outward bound growth of Chinese law firms themselves. The failure to make progress on this front is harmful to both Chinese and foreign companies and inconsistent with global economic developments. Recommendations Revise current regulations to allow foreign law firms to provide comprehensive legal services to their clients through qualified PRC lawyers. Clarify in Chinese regulations that foreign lawyers are permitted to participate in meetings between their clients and Chinese government departments. Simplify the requirements, eliminate the unpredictability and reduce the review period for the establishment of representative offices as well as the opening of additional offices. Allow foreign law firms to hire foreign nonlegal professionals, improve the procedures for registering and transferring representatives, and increase the length of time visas are valid for representatives. Address the inequitable taxation of foreign law firms by treating them as pass-through entities for income tax purposes and equalizing their business tax rates with domestic law firms. 300 2011 White Paper AmCham-China
具 法律服务 业问题结论 尽管加入世贸组织之后, 中国经济的对外开放引人注 目, 并由此带来经济的快速增长, 但中国的法律服务市场却还在很大程度上没有对来自外国的律师事务所开放 在另一些方面, 外国律师事务所能为其在中国的客户提供服务的能力反而自中国加入世贸组织之后受到了更多限制 互利互惠重要原则, 在促进和实现当代经济全球化的国际贸易与投资规则中起着十分重要的作用 中国政府为外国律师事务所开放法律服务市场的各项行动将符合经济全球化的趋势, 并将促进中国律师事务所向外发展壮大 若在这方面停滞不前, 将会有损于中国和外国企业的发展, 也与经济全球化趋势背道而驰 建议 修改现有条例, 允许外国律师事务所聘请合格的中国律师为其客户提供全方位的法律服务 在法规中申明允许外国律师出席及参与有其客户参加的 政府部门召开的所有行政性程序和会议 简化代表处设立要求 尽可能消除不可预测性因素 并缩短建立代表处以及开设新代表处的各项审核期 允许外国律师事务所聘请外国非律师专业人士, 完善主要代表人的注册及调动程序, 延长代表人的签证有效期限 解决外国律师事务所面临的不公平征税, 将外国律师事务所看作传递性实体缴纳所得税, 使其享受与国内律师事务所同样的所得税税率和营业税税率 体行 AmCham-China 2011 White Paper 301