Stolpersteine und Chancen bei einer Expansion nach China

Susanne Sahli & Nathan Kaiser Egerkingen, 9. Juli 2012

www.eigerlaw.com www.truecolours.ch

• Introduction • Stories and Anecdotes • Does law matter in China? • What are contracts worth in China?

• HR: Success factors as an Expatriate • HR: Leadership in Greater China

Agenda

• two party Joint Venture with three parties

• the eternal, superhuman Joint Venture

• Incentives to come - and to stay!

• your trusted distributor in China

• your independent middle man in China

• SAFE: financing limits that really apply

• recognition of foreign court judgments

Stories and Anecdotes

Typical HR Problem Cases

• the local CFO from Germany

• the local GM

• the foreign, very flexible, company in China

• your trusted accountant

• the foreign young business man

• ... and just normal employees...

Stories and Anecdotes

The environment is different in China:

• Stock market in China

• Focus on FIE / comparison with local

companies

• Internal fraud – „à la Chinoise“

• Environmental issues – „à la Chinoise“

• Food issues – „à la Chinoise“

• Small customs issues – „à la Chinoise“

Stories and Anecdotes

Typical Cases of Fraud:

• Inventory theft

• Accounting fraud

• Fraud at POS

• Kickbacks to suppliers / from customers

• Competing activities

• Breach of confidentiality

• Tax and customs fraud

Stories and Anecdotes

• Cultural and social settings in a rapidly

evolving society

• „guanxi“ as cornerstone of business model?

• Lack of enforcement by judicial apparatus

• Immature HR market: power combined with

low salary

• ... opposite: GM with "no power" but high

salary

• The poker game under the table

HR Landscape in China

HR landscape in China

• 18 Mio labor enter workforce every year

• The war and retention for top talent intensifies,

strong headwinds for Caucasians

• Suitably, qualified leaders with fitting values are

hard to find and come at high cost

• Localization of top level positions continues

• Solutions for Executive search, assessments,

talent management, coaching and on boarding

programmes highly in demand

Leadership in China demands:

• Understanding of cultural differences

• Ability to look at things from others

person’s perspective

• Being comfortable with uncertainty

• Flair for situational leadership

• Rapid decision making capability

combined with patience

• Robust mentally and physically

Expatriate transition:

From an employer’s point of view

• What are selection criteria and do we have a

sound and proper recruitment process in place?

• How do we include spouses and family members

in the process?

• How could a transition coaching help in the first 6

critical months?

• Do we give access to network opportunities (e.g

Swiss business community)?

• How do we use the gained know-how when the

assignment is completed?

Expatriate transition:

From an employee’s point of view

• How do I prepare myself and my accompanying

person?

• Are my language skills sufficient to ‘survive’?

• Who can help me to make the transition as smooth as

possible? Do I have access to social and business

related network opportunities?

• Am I aware of the cultural differences, local living

conditions and leadership requirements?

• Am I flexible enough to deal with uncertainty?

• What is my motivation to do it?

Wie machen es denn die Chinesen?!?

How to do it right:

Due Diligence: • targets: employees, suppliers, customers,

(JV) partners • verify SAIC, TM, domain names and similar

registration documents • Professional advice is recommended

Documentary: • Employment agreements & Sales Contracts: • Confidentiality, IPR, Non-competition

Organisational: • family / accompanying person

How to do it right:

Organizational: • HR organization and processes • controls, surprise visits, electronic surveillance,

etc. • Whistle blower / hotline • Just because you‘re paranoid doesn‘t mean

they‘re not out there to get you...

Comprehensive HR Compliance Training: • (regular) interviews • Sound selection process and criteria • (regular) training and retention programmes • Sign-offs?

How to do it right:

• Speed & Coordination • facts and information gathering • Coordination with service investigators,

(external/internal) CPA, attorneys, (external/internal) IT personnel

• Once facts are clear, establish the law... • prepare options and scenarios, game plan • Legal actions: use strategy, combinations,

staggered attacks

What to do when things go wrong:

• Know thy authorities! • Know the media! • Know thy law! • Know thy enemy! • Use competent external help and specialists • Strike a balance: formal and informal actions • In China: use „adminstration-friendly“ tactics

What to do when things go wrong:

Thank you for your attention!

謝謝!