Legal Translation for Retailers in China

Translating for Retail Success in China

We’ve blogged about the need for English to Chinese legal translation services for drug approvals in China and about the importance of English to Chinese legal translation services for China’s real estate market. Currently, China is the “land of opportunity” for international retailers. China provides a large (and still growing) group of consumers with relatively sophisticated tastes, who are looking for high-quality international brands. Moreover, Chinese consumers are willing to pay for premium products. Accordingly, international retailers have a phenomenal chance for success in China.

That success, however, will only come if an international retailer is able to navigate the complicated waters of establishing a retail store in China. Indeed, achieving that goal requires the proper investment in resources and the use of the right external support. One of the external supports you need is a professional English to Simplified Chinese translation service.

Everything an international retailer must do to establish a presence in China requires many legal and marketing documents to be translated into Simplified Chinese. That not only includes word-for-word translations, but it also requires a knowledge of market and context to get the Chinese translation correct. Consider tapping into the professional talents of English to Chinese legal translators at All Language Alliance, Inc. We pride ourselves on translations that are accurate the first time, regardless of whether they are technical legal documents, or marketing materials made to grab the consumer. Call our legal translation service today for more information.

The Legal Issues to Consider for Retailer in China

Over the next decade, China’s consumer market is expected to grow at an annual pace of 6 percent. That is faster than anywhere in the West. Thus, China is quickly becoming the world’s leading consumer market.

In order for an international brand to take advantage of this growth, it must not only establish online product sale opportunities but also have brick-and-mortar stores in China. There are, however, a number of legal hurdles to getting those stores built in China. Those hurdles generally fall into four categories:

1. Set-up of the Corporate Structure
2. Establishing a Branch in China
3. Executing a Lease for the Store Location(s)
4. Legal Compliance

Let’s take a moment to discuss each in a little more detail.

Corporate Set-up in China

To establish a store, an international retailer must first incorporate a legal entity, a subsidiary, in China. That could take about four to six months. As part of the incorporation process, your company would need to have (i) a registered business address; (ii) a defined business scope, which clarifies the limits of what the business can do and what special licenses (like food or medical product licenses) are required; (iii) a company name that consists of location, industry, and trade name; (iv) the registered capital, which is the amount of money committed to the company; and (v) a board of directors, a legal representative, and rules about how corporate governance is handled.

Establishing a Branch in China

While it is possible to have the first retail branch at the legal location of the company, it is much more common for an international retailer to set up offices in China (which serve as the company’s registered business address) and then establish the first retail store elsewhere. International retailers can choose to have one company with many branches throughout the country, because there is no limit to the number of branches a single company can have. However, a retailer may establish separate companies in major cities. The former model is the most common, but there may be advantages to having separate companies in major cities depending on the product you provide.

Executing a Store Lease in China

All retail business is “location, location, location.” Yet, as a new entrant into the Chinese market, it may be difficult to secure the best locations. Moreover, even in moderately lucrative locations, landlords will typically have most of the leverage in negotiations with a retailer that is new to China. Keep that in mind when getting started, and try to avoid signing the landlord’s complete version of the lease, if possible. Fortunately, over time, once your brand is established, it will become that much easier to negotiate with landlords for retail space.

Legal Compliance Issues in China

After establishing the company, the retail business, and the store space, your company needs to follow the compliance rules in China. It is worthy of note that the country has a particular focus on consumer health and safety matters. The rules on consumer health and safety may be significantly different from other regions of the world, and thus may have a significant effect on retail operations. Therefore, you need to be meticulous on the rules pertaining to your particular business.

Product quality. China has some rather strict standards, especially on food products. Further, failure to comply with such standards could expose the company to substantial financial penalties, and even criminal liability for some decision-making employees.

Advertising and pricing. Violations of discounting and minimum pricing regulations have been known to be exploited by “professional buyers,” who may extort money from retailers. You may have to confront whether to give into such extortion, or fight in court.

Labeling. There are strict rules on expiration dates and ingredients. Remember, labels must be in Chinese along with other China-specific rules.

Data privacy. You already need to comply with the West’s PRC Cyber Security laws, yet data privacy is currently a “hot topic” in China. Therefore, there may be more changes in that area moving forward.

Employment. As you would expect, Chinese labor laws can be strict and are employee-friendly. Be sure that employment contracts –which should be translated into Simplified Chinese – are strong contracts and employee handbooks are clear.

In sum, there are many, many legal considerations in setting up a retail store in China. Despite the many hurdles, it can be done. The profits from doing so may likely make the hurdles worth the effort.

As you can see from this article, there are many legal and non-legal documents that require translations into Chinese.
If you need a professional legal translator to deliver legal document translations from English to Simplified Chinese, or services of a Mandarin interpreter or translator we welcome you to contact us at All Language Alliance, Inc.

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