Simmons and HSF join list of firms eyeing ventures in Shanghai Free Trade Zone 

Simmons & Simmons and Herbert Smith Freehills (HSF) are the latest UK law firms to have expressed an interest in the Shanghai Free Trade Zone (SFTZ) after recent reports that the scheme would allow tie-ups between international and PRC outfits.

HSF is actively looking at its options for a venture, with the initiative being led by Hong Kong-based litigation partner May Tai, who specialises in cross border China-related disputes. The firm declined to comment further.
Simmons & Simmons is also thinking seriously about partnering with a PRC firm, something it has been looking at for some time in a bid to bolster its China practice.
Asia managing partner Paul Li told Legal Week: “Partnering with a Chinese law firm is something that we have looked at and talked about for a while but we’re still at the stage of thinking how it can be done in such a way where it is meaningful.

“We are interested in the opportunities the SFTZ offers but need to see detail of the regulations to be sure that it would enable us to offer something truly different and better.”
Last week, Linklaters voiced its interest in the zone, saying it had ongoing discussions with its friends on the mainland and was considering the details of recent announcements.
It is thought that the magic circle firm might look for a top-tier PRC partner should it be permitted to second in PRC lawyers and subsequently offer China law opinions.

Meanwhile, US outfit Dechert told Legal Week in November that it was watching what was happening in the SFTZ “very closely”, in line with its plans to open a Shanghai office.
Announced in September 2013, the Shanghai FTZ aims to test liberalisation of the Chinese market in key areas such as telecoms, financial and legal, and is the most significant such step by the Chinese government.
Recent reports say the government has outlined detailed proposals for joint working between international and PRC firms, but the full list of reforms is yet to be finalised.
Offering similar opportunities for law firm tie-ups is the Qianhai Special Economic Zone (SEZ), another pilot scheme which aims to trial the liberalisation of China’s financial services market, and is currently under development in the south of the country, due for completion in 2020.

The Law Society of Hong Kong submitted proposals to mainland authorities last year asking for Hong Kong outfits to be allowed to set up joint ventures with mainland firms in the zone, in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), signed in 2003 to strengthen trade and investment between the two regions.

However, if accepted, the rules would only apply to foreign firms whose Hong Kong branches are considered to be truly local outfits, and they would be restricted to partnering with firms based in the Guangdong province.
Those who said they might look at ventures in the zone at the time included Freshfields Bruckhaus Deringer – whose Asia practice has a strong China corporate focus – and Baker & McKenzie.
Freshfields’ Asia managing partner Robert Ashworth said that his firm had long been following the zone’s developments, and once the rules came into effect it would certainly explore its options. When asked about the Shanghai Free Trade Zone, he declined to comment.

 

Source: legalweek

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