What should Chinese foreign-owned subsidiaries bear in mind when entering into service agreements with their headquarters?

The subsidiaries must provide the services that are within their business scope.

For foreign-invested commercial enterprises or manufacturing wholly-owned foreign enterprises, the services must be provided in relation to their business scope: thus, for example, manufacturing Chinese foreign-owned subsidiaries can still provide trading services, if and only if such services are related to their manufacturing business scope.

It is recommended to confirm service agreements with local authorities before signing.