[Direct answer]The law applicable to foreign-related marriage property agreements may be agreed upon by both parties in writing. According to Article 24 of the Law on the Application of Law to Foreign-Related Civil Relations (effective April 1, 2011), the property relations between spouses may be agreed to apply the law of the party's habitual residence, the law of the nationality, or the law of the main property location. If no choice is made, the law of the common habitual residence shall apply. The agreement shall be in writing and binding on both parties in accordance with Article 1065 of the Civil Code of the People's Republic of China. For overseas real estate, the ownership of the real estate shall be governed by the law of the place where the real estate is located (Article 36). It is recommended to explicitly state the applicable law provisions in the agreement and have it notarized. For further information, please consult a lawyer.Financial capital and cross-border legal services involving foreign affairsAndBeijing Henglue Law Firm.

I. Problem background and typical scenarios

It's becoming increasingly common for people to work and live across borders, which has led to an increase in the demand for property agreements in cross-border marriages. Typical scenarios include: one party is a foreign national or has been working overseas for a long time, and both parties held real estate, deposits, and equity in China and abroad before marriage; the family plans to immigrate and needs to arrange the ownership of assets in advance; one party holds stock options in overseas listed companies or holds shares through overseas structures; the parties have different nationalities and habitual residences, and their assets are scattered across multiple countries. The most pressing concerns for the parties are: which country's law should be applied in the agreement, which country's law should be used for division in the event of divorce, and whether overseas properties and stocks are subject to the agreement. Improper or missing choice of applicable law often undermines the effectiveness of an apparently comprehensive agreement when disputes arise.

II. Key points of dispute

  • The scope of express choice: The applicable law for marital property relations can only be chosen from three categories: the habitual residence, the nationality, and the location of the main assets. Any agreement that exceeds this scope may not have the effect of selecting the applicable law.
  • Determining the habitual residence: When the parties move between multiple countries, the question of which location constitutes the habitual residence directly affects the applicable law in the absence of an agreement, and it often becomes the primary point of contention in court hearings.
  • The conflict between real estate and special property: Overseas real estate, trusts, and options are subject to the laws and mandatory regulations of the local jurisdiction. When the provisions of the agreement conflict with the local law, the validity of the agreement needs to be determined. Advice and suggestions on this matter are provided herein.Financial capital and cross-border legal services involving foreign affairsThe team evaluated it together.

III. Professional analysis by Henglue Law Firm

When drafting foreign-related property agreements, Henglue Lawyers' experience is to focus on five key elements. First, the applicable law provisions: clearly state that this agreement applies to the laws of a specific country or jurisdiction, and the selection of applicable laws is limited to the scope permitted by Article 24 of the Law on the Application of Laws to Foreign-Related Civil Relations. This must be explicitly stated at the time of signing. Second, the itemization of property: list all domestic and overseas assets separately, accompanied by ownership certificates, to avoid ambiguous descriptions that may lead to interpretation disputes. Third, formal requirements: signed in writing, with the bilingual version specifying the order of effectiveness and interpretation. For documents created overseas, attention should be paid to notarization and authentication. For documents from countries that are parties to the Convention on the Abolition of Legalization Requirements for Foreign Public Documents, after the convention came into effect in China on November 7, 2023, only an additional certificate is required. Fourth, coordination with local laws: real estate, trusts, options, and other assets subject to local mandatory regulations should be handled separately, and the registration path should be confirmed with local lawyers. Fifth, modification and dispute resolution clauses: stipulate modification procedures and jurisdiction courts or arbitration institutions. It is also necessary to distinguish: for litigation divorce, the court's local law applies, while the marital property relationship is still governed by the applicable law determined by Article 24. The two sets of rules operate in parallel. For inheritance arrangements, they can be handled in accordance with the provisions of the Inheritance Law of the People's Republic of China.Inheritance succession and family property division services\nConnection planning.

IV. Practical suggestions and legal basis

At the legal basis level: Article 3 of the Law on the Application of Law to Foreign-Related Civil Relations (implemented on April 1, 2011) stipulates that parties may explicitly choose the law applicable to foreign-related civil relations; Article 24 stipulates the scope of choice of the applicable law for marital property relations, and when no choice is made, the law of the common habitual residence shall apply, and if there is no common habitual residence, the law of the common nationality shall apply in sequence; Article 27 stipulates that the law of the court's location shall apply to litigation divorce; Article 36 stipulates that the law of the location of the real estate shall apply to real estate rights; Article 10 stipulates that the foreign law applicable to foreign-related civil relations shall be identified by the people's courts, arbitration institutions or administrative authorities. Where the parties choose to apply foreign law, they shall provide the law of that country. If the law cannot be identified or there are no provisions in that country's law, the law of China shall apply. Article 1065 of the Civil Code of the People's Republic of China (implemented on January 1, 2021) establishes the marital contractual property system, which shall be in writing and legally binding on both parties. At the practical advice level: Prioritize jurisdictions that are easy to identify and enforce, and explicitly state them in the agreement; design separate clauses for domestic and overseas assets; have the agreement notarized and retain the bilingual original when signing, and promptly sign a written supplementary agreement after major changes in assets.

5. Henglue Law Firm's Reminder

The value of a foreign-related property agreement lies in "locking in expectations with selected rules," rather than leaving it to the court to passively determine in the event of a dispute. In practice, the most common mistakes include: first, the absence of jurisdiction clauses throughout the entire agreement; second, agreeing to apply a foreign law but failing to provide it, ultimately reverting to Chinese law for resolution, rendering the agreement ineffective. Cross-border families should also consider taxation, foreign exchange, and inheritance arrangements simultaneously to avoid conflicts among various documents. If you are currently drafting or reviewing a foreign-related property agreement, you can seek assistance throughBeijing Henglue Law FirmThe appointment for evaluation will be arranged by the cross-border family law team, who will provide advice on the applicable law and the drafting of contractual provisions.

Q1: Can a property agreement freely stipulate that the law of any country shall apply to it?

No. According to Article 24 of the Law on the Application of Laws to Foreign-Related Civil Relations, the choice of laws governing marital property relations is limited to the law of the habitual residence of one of the parties, the law of the country of nationality, and the law of the location of the main assets. Agreements exceeding this scope do not have the effect of selecting the applicable law. The parties may, taking into account the center of their marital life and the distribution of their main assets, choose a jurisdiction that is favorable to them and easy to verify, and explicitly state it in the agreement. It should also be noted that the chosen jurisdiction should match the actual location of the assets: if the agreement stipulates the application of a certain country's law but all the assets are located in another country, the ownership registration and enforcement will still be subject to the law of the location of the assets, and the provisions should be arranged accordingly.

Q2: The agreement doesn't specify which country's laws apply. What should I do in the event of a divorce?

Handle in accordance with the priority rules of Article 24: if no choice is made, the law of the common habitual residence shall apply; if there is no common habitual residence, the law of the common nationality shall apply. The habitual residence generally refers to the place where the parties have continuously resided for more than one year and served as the center of their lives when the foreign-related civil relations arise or change, except for situations such as medical treatment, labor dispatch, and official duties. If the parties' habitual residences or nationalities are not consistent, the determination of the applicable law will become the primary point of contention, directly determining the scope of the common property and the result of its division. To avoid being passive, it is recommended to actively specify the applicable law provisions in the agreement and retain proof materials of the parties' residence, work, and main property locations.

Q3: Can the agreement directly dispose of overseas real estate?

It is necessary to make a distinction and handle them separately. Although the applicable law for marital property relations can be chosen according to Article 24, according to Article 36, the real estate property rights shall be governed by the law of the place where the real estate is located. The ownership, registration, and disposition of overseas real estate are usually subject to the mandatory regulations of the local area. It is prudent to: separately set provisions for overseas real estate in the agreement, clarify the ownership and compensation methods, and ask local lawyers to confirm the effectiveness and implementation path of the agreement in the local area. If necessary, sign documents that meet local formal requirements and complete the registration. If only a written agreement is signed without completing the local ownership confirmation procedures, there may still be ownership disputes after divorce.

Q4: How can a property agreement signed abroad be used in China?

First, let's address the issue of the form of evidence: documents from countries that are parties to the Convention on the Abolition of the Requirement of Legalization for Foreign Public Documents only need to undergo an additional certificate process after the convention came into effect in China on November 7, 2023, without requiring consular legalization; documents from non-party countries still need to undergo notarization and consular authentication. Foreign-language agreements should be submitted with a Chinese translation. At the substantive level, domestic courts will first determine the applicable law according to Article 24 and then review the validity of the agreement based on that law; according to Article 10, if the parties choose to apply foreign law, they should provide the relevant country's laws. It is recommended to handle notarization at the time of signing, retain the bilingual originals and records of the signing process, and facilitate future evidence collection.

Q5: In foreign-related divorce litigation, which country's law is used to divide the marital property?

It is determined in two layers: whether to grant a divorce and the procedural matters apply the law of the court's location (Article 27), that is, the law of the place where the sued court is located; the substantive issues of the couple's property relations are determined by the applicable law according to Article 24, which may be the law chosen by both parties, the law of their common habitual residence or the law of their common nationality, and not necessarily Chinese law. According to Article 10, if foreign law cannot be identified or that country's law does not provide for it, Chinese law shall apply. Therefore, in the same case, there may be an overlap of procedural application of Chinese law and property application of foreign law, and the scope of division and conclusions may vary greatly. Before filing a lawsuit, lawyers should conduct an analysis of the applicable law and evaluate the feasibility of identifying foreign law.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Financial capital legal services·Beijing Henglu Law Firm