When a Chinese company finds itself on the Abnormal Business Operations List, it faces a variety of restrictions and prohibitions leveled from the Chinese government.
Understanding the types of restrictions that a Chinese company can face when it is listed on the Abnormal Business Operations List can help you make more informed decisions should you find that the company you’re considering falls into this category.
As we discussed in our article Understanding Chinese Abnormal Business Operations, a Chinese company can be placed on the State Administration for Industry and Commerce’s (SAIC’s) list for a variety of reasons or violations, with failure to submit an annual report on time remaining one of the most common reasons. Below we list some of the common restrictions that the Chinese government can apply to a company once it finds itself on the Abnormal Business Operations List.
- Restricting the company’s foreign employees’ ability to extend their work visas
- Rejecting the company’s Chinese employees’ tourist visa applications
- Rejecting the company’s application for financial support (especially in the high tech sector)
- Barring the company’s legal representative from purchasing rail or airline tickets in China
- Banning a company from running an e-commerce site on Alibaba
- Prohibiting the company from applying to be listed on stock exchanges (the local SAIC would refuse to issue the proper legal operational proof for such an application)
- Rejecting a company’s bank loan application
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