In November, Beijing’s top lawmaking body issued the Beijing Regulations on Boosting the Commercialization of Technological Achievements, which were implemented from 1 January 2020.
Under the regulations:
- Companies that own “technological achievements” shall reward and remunerate their technical personnel who contribute significantly to the creation or transformation of technological achievements. As for the method, amount and time limit of the reward and remuneration, companies can adopt their own policy in accordance with the law, or reach an agreement with the technical personnel. If there is no company policy or agreement on such matters, companies should reward and remunerate technical personnel in accordance with the Law on Boosting the Commercialization of Technological Achievements, most recently amended in 2015.
Under this law, companies should pay technical personnel: (1) no less than 50% of the companies’ net income derived from a technological achievement, in the event of transfer or licensing of rights to the technological achievement; (2) no less than 50% of the companies’ contributions or shares obtained in the event of using the technological achievement as in-kind investment; or (3) no less than 5% of the companies’ annual profits derived from commercially exploiting the technological achievement, for three to five years consecutively, after the technological achievement is transformed and put into production.
- Companies, especially the small and medium-sized ones, will receive preferential treatment for commercialization of technological achievements.
Beijing will also make it more convenient for foreign talent to apply for entry visas, residence permits and work permits.
Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at [email protected]