Be a local or foreigner to apply patent in China?

In China, there are many ways to classify patents, one of the way is the nationality of patent applicant (owner). The first difference is the application fee. A local Chinese citizen or company enjoy a much lower application fee, while a foreign resident or company have to pay a higher fee for the patent application, both governmental fee and handling fee charged by patent attorney. There are two sides of a coin. For example, a customer had companies registered in Hong Kong and China, we recommend the customer to use the Hong Kong entity (regarded as a non-domestic under Patent system) as the applicant. Why pay more for a foreign status?

In the Chinese socity, government is like the grand parents, and the local government officials are the parents, so we have the old saying of "father-and-mother-officials", these officials are the fathers and mothers of the countrymen. The central government actually represent the heaven. So much so for the history, nowadays goverment officials still want to protect their people like parents taking care of children, in particular against some bad-faith foreign business man.

Now, a Chinese inventor, after all the hard work and went though the patent application process, eventually got something valuable, decided to sell the patent rights to an investor in Europe, say for USD200,000. The parent(s) may step in and say, look, the international market value of such piece of work should be USD500,000. The inventor may say "my price is the best I can bargain for." Well, in the transfer of patent right process, the government have the right to look at such transfer and make requistion, and in the end, the tax man will charge tax based on the USD500,000 value estamted.

However, a Hong Kong inventor may sell the patent to a US company and such transfer of right only calls for a simple registration. No question asked.

So pay more for the foreign status and less trouble when such transfer is required in the future.

There are tax implication even before such transfer, so talk to your accountant as well as the patent attorney.