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China: Administrar una empresa

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Equity Joint Venture No minimum capital.	100% foreign owned company. Minimum one partner. Limied to the amount of contributions.
Co-operative joint ventures, CJV No minimum capital.	Minimum 2 partners. Limied to the amount of contributions.
Foreign investment joint stock company, JSC 5m Rmb, 30 Rmb if foreign capital	Minimum 2 partners. Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.
Holding minimum de 30m USD	Minimum 1 partenaire. Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.

Enterprises Federation: Chinese association of international cooperation of SME
Search a Company or a Financial Report: Ministry of Commerce, Find an enterprise

Business Setup Procedures

Setting Up a Company	China	East Asia & Pacific
Procedures (number)	14.00	7.80
Time (days)	38.00	39.00

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in China.
Registration and Operation of Enterprises in China
The Competent Organization: Ministry of Commerce

Recovery Procedures

Principle
Minimum Debt-to-Capital Ratio Triggering Liquidation
Bankruptcy Laws: Company bankruptcy laws
The law on bankruptcy is being reshaped in China. It is difficult to be declared as bankrupt. To be declared as bankrupt, equities must be negative.
Reorganization and Rehabilitation Laws: Company bankruptcy laws

The Active Population in Figures

	2010
Labor Force	780,000,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	73.70%
Men activity rate	79.70%	-
Women activity rate	67.40%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2004
Agriculture, Forestry, fishing	6.6%
Extraction and Exploitation	0.1%
Manufacture	27.3%
Electricite, gas, water	0.4%
Construction	7.5%
Wholesale and retail trade	17.6%
Transport, stockage, communications	5.0%
Finance, Insurance	3.9%
Education	5.4%
Hotels and restaurants	6.2%
Public administration	3.8%
Other	16.2%

Source: Labor Force and Employment, allcountries.org

For Further Statistics: China statistics
National bureau of statistics of China
For Further Information About the Labor Market: ILO, International Labor Organization

Working Conditions

Opening Hours
Legal Weekly Duration: 40 hours
Maximum Duration: 8 hours per day with a maximum of 44 hours per week on an average. Not more than additional 36 hours per month.
Night Hours

Working Rest Day: One day per week.
Paid Annual Vacation
Retirement Age: 55 years for women and 60 years for men.
Child Labor and Minimum Age For Employment: More than 15 years for the industry. For other sectors, children can work at 13-14 years under certain conditions.
Informal Labor Market: Moonlighting is estimated at 18.5% of national workers and 72.5% of foreign workers.

The Cost of Labor

Pay

Minimum Wage: No legal minimum salary.
Average Wage: Average monthly gross earnings in China is CNY 1,868 (USD 273).
Other Forms of Pay
Pay For Overtime: Increase of 150% if the worker is requested to work more
Increase of 200% if an additional rest day cannot be granted
Pay For Rest Days Worked
Pay For Night Hours
Pay For Overtime at Night

Social Security Costs

The Areas Covered: Retirement, medical insurance, unemployment.
Contributions: Contributions Paid By the Employer: 60%
Contributions Paid By the Employee: 11%
Competent Organization: Ministry of employment and social security

Management of Human Resources

Recruitment

Method of Recruitment: Recruitment is done more and more through Internet. But announcements in the newspapers are the most used means for the job offers. Numerous trade fairs are also organised and are a good means to recruit. Recruitment campaigns in the universities are also organised. The most prevalent method of recruitment is the interview. Certain companies must also pass technical or English tests. The psychological tests are not used in China, however role playing, simulations or group interviews are becoming more and more common.
Recruitment Agencies: Many recruitment agencies are found in China. Hudson, Wang-li, Michael Page.
Recruitment Websites: ChinaHR.com
Zhaopin.com
51job.com

The Contract

Type of Contract: Legal provisions govern the work contracts, the collective agreements and the individual negotiation supplement them.
Employment contract and recruiting conditions formalities are strict, which is not so for dismissal constraints which are rather flexible.
There are 3 types of contracts: the permanent contract, the fixed term contract and the contract for the project.

Breach of Contracts

Retirement

At the age envisaged, not before.

Necessity for all the projects to submit a business plan subject to approval by the competent authorities.

Dismissals

An employee can be dismissed if he has demonstrated during his trial period that he was not qualified for the post, when he violates the company rules, when he causes great loss to the company because of professional misconduct. A dismissal is also accepted when the employee after a long illness cannot resume his job again or another job in the company, if the employee is inefficient even after training, or if no arrangement is possible between the parties on a change of contract.

Other Possible Methods

Dismissals.

Labor Laws

Employment law

Dispute Settlement

Conciliation Process

Cases of Dispute: Conflicts between employe and employee on the non respect of the labour law.
Legal Framework: In the event of dispute between the employer and employee, the parties can have recourse to a mediation or an arbitration, present the case before the Court or come to a mutual arrangement. During a mediation or an arbitration if one of the partiess has an objection to the resolution, it can proceed to the Court for a lawsuit.
Procedure: Employment law

Judicial Structures

Legal Framework: Employment Law
Competent Legal Body: People's court

Social Partners

Social Dialogue and Involvement of Social Partners: The Chinese Communist party recognises only one trade union: "the All China Federation of Trade Unions" (ACFTU). The ACFTU is not an independent trade union, it thus cannot be the voice of the workers.
Unions: All China Federation of Trade Unions (ACFTU)
Regulation Bodies: Ministry of Employment

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