Baker & McKenzie eyes Shanghai Free Trade Zone opportunities
Baker & McKenzie plans to be among the first international firms to apply for a joint operation with a Chinese outfit in the Shanghai Free Trade Zone (SFTZ), as part of plans to bolster its cross-border M&A dealflow from mainland China.
August 13, 2014 at 07:25 PM
3 minute read
Baker & McKenzie plans to be among the first international firms to apply for a joint operation with a Chinese outfit in the Shanghai Free Trade Zone (SFTZ), as part of plans to bolster its cross-border M&A dealflow from mainland China.
In an interview with Legal Week, Bakers' Asia chief Winston Zee said mainland China was among his top priorities for regional growth, adding that he was open to all tie-up options pending the release of new regulations setting out the specific guidelines for law firms seeking deals in the SFTZ.
"The most immediate short term [priority in China] is clearly the Shanghai Free Trade Zone," he said. "We are no different from the other firms. We have been looking at it very, very closely with great interest, doing all sorts of planning, crunching all sorts of numbers and talking to all sorts of people, to come up with a game plan that would make the most sense.
"Once the regulations come out I can see that there will be a flood or wave of applications by international firms and we will be among those firms."
Zee added that the firm's focus would be on PRC firms or lawyers specialising in cross-border M&A which have experience working in a partnership.
To increase outbound mandates he wants to see the firm forging relationships with major Chinese companies going global. This could be better achieved through having a joint operation in Shanghai rather than growing an extensive network of offices around the country according to Zee.
The SFTZ was launched in September 2013 to test the liberalisation of some of China's key service sectors.
Telecoms companies, financial institutions and law firms are among those expected to benefit from the scheme which reduces foreign ownership restrictions.
Recent reports suggest foreign law firms with a representative office in the PRC may be allowed to tie-up with Chinese outfits to mutually dispatch lawyers and jointly advise clients on Chinese and international law.
Others to have expressed an interest in the zone include Linklaters, Herbert Smith Freehills and Simmons & Simmons.
However, many lawyers remain apprehensive due to the lack of clarity on rules for law firms.
"It must be true for the other firms who are looking at this closely – you can't really map out a specific game plan if you don't know what the Chinese authorities will approve or not approve – a joint operation is a very vague concept," said Zee.
"So we have to look at all possible scenarios. But fundamentally if it is going to happen for us – it has to work under the regulations, and the people that we work with have got to be the best quality we can find."
Bakers' expression of interest in the SFTZ follows an active 18 months for the firm in Asia-Pacific, with three new offices opened in Seoul, Korea; Brisbane, Australia; and Yangon, Myanamar.
The global giant saw Asia bringing in 26% of its total revenues over the most recent financial year – a 1% to 2% increase on the previous year taking currency fluctuations into account according to Zee.
As part of its growth plans for Asia two core areas of focus are ASEAN and China, while the firm is also mulling options for an office in Perth, local capability in Korea and looking to second more of its Japanese lawyers to other offices.
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