MNCs: select your advisors carefully

An increasing number of the PRC entities of multinational corporations have established in-house advisory committees generally composed of experts and scholars in relevant fields, as well as people with rich experience, with the aim of offering counsel to management and their overseas headquarters.

Although it is legally permissible for PRC entities of multinationals to establish in-house advisory committees, there are no PRC laws or regulations that directly address the appointment of such advisor candidates. However, it should be noted that the restrictions imposed by laws and regulations on different advisor candidates will differ, depending on their varying statuses.

Public officials

The PRC entities of multinationals will often wish to invite active or former public officials (particularly government officials) to join their advisory committees.
However, participation by state public officials, government officials or other such civil servants in the operation and work of other social organisations, particularly profit making organisations, is usually subject to more and stricter restrictions, or entirely prohibited.

Raphael Li is an associate of Martin Hu & Partners (MHP Law Firm)