In the global business community, few phrases spark more anxiety than "Exit Ban." For a foreign CEO or legal representative in China, understanding the reality of these restrictions is not just a legal necessity—it is a matter of personal freedom.
The Reality of Exit Bans (限制出境)
Under Chinese law, an exit ban is a civil or administrative measure, not always a criminal one. It is often used as a high-pressure tactic to ensure that a company complies with a court judgment or cooperates in a commercial dispute.
Why a Foreign Executive Might Be Flagged:
Unresolved Commercial Litigation: If your company is sued and a large sum of money is at stake, the plaintiff can petition the court to restrict the "Legal Representative" from leaving China until the case is settled or security is provided.
Unpaid Taxes or Wages: Significant arrears in corporate taxes or employee salaries can trigger an automatic restriction by the tax bureau or labor authorities.
Ongoing Investigations: Even if you aren't the target, being a witness or a senior manager in a company under investigation for financial irregularities can lead to temporary travel restrictions.
Critical Advice fromwww.hirelawfirm.com:
The "Legal Representative" Risk: The person listed on the Business License carries the highest risk. If you are a CEO but not the Legal Representative, your risk is lower, but not zero.
Pre-departure Checks: If your company is involved in active litigation, we recommend a "Pre-travel Legal Audit" to check the Supreme People's Court database for any active restrictions.
The Security Deposit Solution: In many civil cases, an exit ban can be lifted immediately if the company provides a bank guarantee or a cash deposit to the court.
"Don't wait until you're at the airport gate to find out there's a problem."
Contactwww.hirelawfirm.comfor a Confidential Exit Risk Assessment.
