Note: The following article is the second article of the series discussion regarding “Listing and Financing of FIEs in China” 1. Financing and control Some foreign enterprises are concerned that their equity in the foreign invested enterprises established by them in China (“FIEs”), will be continuously diluted in the course of financing, potentially resulting in losing the control over the FIEs or even be sidelined from management. While these concerns may have some merit, they don't always hold true.

With the successive promulgation of the Cybersecurity Law, Data Security Law, Personal Information Protection Law, and their supporting regulations, compliance requirements for cross-border data transmission have become a task that Chinese enterprises must take seriously. Specifically, enterprises with a need for Cross-Border Data Transmission (for example, overseas companies investing in and establishing production or trade enterprises in China, cross-border e-commerce stores, etc.) should establish their own cross-border data export compliance system in accordance with these legal requirements. However, the issue here is, how can companies with relatively small data outbound volumes, especially for these small and medium-sized enterprises (SMEs), act according to their needs and strive to set up a data outbound compliance system that meets the requirements of regulators at the lowest possible cost?

In practice, numerous foreign companies have accumulated good reputation and brand value in China through long-term and extensive use of their business names (abbreviations, trade names). However, due to various reasons, the business names of these foreign companies, or other names highly similar to their business names, might have already been directly registered in China as trade names by infringers, and used in the same business field. On one hand, this rush registration might lead to confusion among the public, and preempt the business opportunities of the original owners of the business names. On the other hand, if these foreign companies, as the original owners of the business names, intend to enter the Chinese market and establish entities on their own one day, failure to register their own business name might also be an obstacle to their business development.