Chinese legal services market likely to open further

March 17, 2014 China’s legal services market is showing promising signs of liberalisation, with reports indicating that the pilot program allowing associations between Chinese and foreign law firms in Shanghai has been a success, and will likely lead to further opening up of the country’s legal services sector.

The pilot program was launched in September 2013 to test-run an opening up of China’s restrictions in foreign and private investment and loosening controls on its currency. The legal services sector is one of eighteen service sectors slated to be opened to foreign investment, and the Shanghai Bureau of Justice is in the process of drafting the detailed procedures and implementation measures for the pilot scheme.

The new policy will allow foreign firms with representative offices in the free trade zone (FTZ) to collaborate with local firms by seconding lawyers to each other’s offices. Chinese lawyers working in the foreign firms’ FTZ representative office can provide PRC legal advice, while foreign counsel working in Chinese firms can provide legal advice on foreign law.

In addition, foreign law firms can enter into contractual associations with local firms - within the FTZ - to provide joint legal services to clients.

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