The EU SME Centre has received a few enquiries from EU SMEs about notary fees or other administrative fees, asked to be paid by a local Chinese company right before signing a sales/purchase contract. The fees would not be paid directly to the notary, but to the local Chinese company which promises to ‘arrange’ or ‘take care of everything necessary’.
According to Chinese law, there is no mandatory provision to notarise ordinary sales and purchase contracts. This requirement exists only for some contracts of special importance, as for example real estate transfers. Moreover, even if both parties agree on the notarisation of a contract, the physical presence of both parties in the notary office is required, otherwise it will be impossible to notarise a signature.
In one specific case that the EU SME Centre dealt with, the foreign company was wise enough to question the notarisation of a contract/signature without being present in the notary’s office themselves, as this was not common practice in their home country. Those justified doubts saved them about EUR 8,000 of such ‘notary fees’ as well as more money and troubles in the future, as the likelihood of repeat offences would have been very high. Such naive attempt to cheat a prospective partner should serve as a warning and discourage any further engagement, as a formal due diligence procedure would likely expose many more risks, making sustainable business with them very unlikely.