Business with China to become easier following accession to Apostille Convention

The Apostille Convention of 1961 is an international agreement that simplifies the procedure for recognising official documents issued in a particular country for legal purposes in another signatory state. It allows convention member states to authenticate – or “apostille” – public documents for use in another member state. A document authenticated by an apostille may also be submitted to another contracting party abroad.

The apostille procedure replaces the traditional and complicated legalisation process by authorities of the member state in which a public document is to be used, significantly reducing the time and costs spent on international transfer and authentication of official documents in the context of trade with China.

Impact on international trade

Prior to China’s accession to the convention on 7 November, public documents from other countries had to undergo a lengthy and costly legalisation process in order to be accepted in China. Similarly, Chinese documents required legalisation by foreign authorities before they could be recognised in their respective countries. Through its accession to the Apostille Convention, China has declared its readiness to simplify the use of public documents from other countries.

Documents likely to benefit from the apostille procedure include, among others:

• birth certificates;
• certificates of professional qualifications/degrees;
• excerpts from the commercial register;
• notarial deeds;
• administrative documents.

This change will make it much easier for foreign companies to do businesses in and with China, as many transactions currently require notarised and legalised documents from the country of origin in China. This is particularly relevant when establishing a company or conducting a legal dispute in China. The use of an apostille will considerably reduce the time and costs involved in this regard. At the same time, Chinese companies are now entitled to use Chinese documents with an apostille in the context of transactions in other convention member states.

As a result, China’s accession to the Apostille Convention will considerably facilitate German-Chinese business relations. Trade between Germany and China has been growing for many years now, where China counts as Germany’s most important trade partner and Germany as a popular investment objective for Chinese businesses. Companies from both countries can now have their respective certificates of establishment and certificates of representation notarised by an apostille. Documents required for the deployment or transfer of employees between Germany and China may also be authenticated by an apostille.

What's next?

The other convention member states will now be notified of China’s accession. The countries then have a six-month period in which to raise objections. If objections are filed by member states, it would not prevent China from entering the Apostille Convention. It would, however, mean that the agreement will not apply between the objecting state and China.

“Western industrialised countries are not expected to object to China's accession. The use of the apostille in commercial trade with China will therefore be an important facilitation,” said Dr. Markus J. Friedl, international M&A expert at Pinsent Masons.