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For Business Inquiry :

Telephone: +86 (21) 5187 9097
Email: info.acbc@gmail.com
Address: Unit K & L, 21 Floor, No.33 He Nan Road (s), Shanghai, China

Rep. Office

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Setting up a Representative Office (RO) is surely the simplest way to show presence in China. This kind of representation allows you to maintain indirect business relationship. It is a platform for networking activities. However, Chinese law does not allow to close a contract as well as to make any profits for RO. RO is a non-legal entity operating which representing its parent company and financed through the foreign parent company. Setting up a RO, a registration from the local authorities has to be obtained.

The establishment procedures described here are based on the assumption that the RO to be set up is not subject to approval by a competent approval authority. Under current rules, most ROs, in particular ROs of foreign companies that are engaged in manufacturing, trading, consulting, exhibition and procurement fall in this category.

Pros & Cons

Pros

No share capital is required

Setup is less procedure

Can exchange foreign currency into RMB

Can hire local staff via government admitted agents

Simple company and financial structure

Cons

Not business entity

Tax rate is high

No invoicing

Must be investment in company

Mother company needs to be at least 2 years old

Permissible Activities

ROs can be generally used for the following purposes:

Conducing market research

Introduction of products

QC facilitation or monitoring purchasing activities

Marketing and sales administration for sales conducted between China and your parent company

Administration for Group activities elsewhere in China

Business liaison

Name

The name of the RO should be in the form of “Country + Name of the Enterprise + Name of the City + Representative Office”. For example, British ABC’s office in Shanghai is officially known as British ABC Consulting Co.,Ltd. Shanghai Representative Office

Hiring of Staffs

ROs are required to hire all of their local Chinese personnel, including any local Chinese appointed to the position of chief representative or ordinary representative, through Human Resource service companies designated by the government. Service companies approved by the Shanghai government to provide Chinese employees to ROs.

Foreign representatives approved by the relevant authorities receive a work and residence permit as well as the corresponding work visa.

Setup Key Points

Company applying for set-up RO has to be at least two consecutive years old 

Takes around 1.5 months to apply

AC can undertake the one-stop service for basic registration to post-registration handling

Rep office shall not exceed four representative persons (including the Chief Representative)

Representative office's business registration certificate shall be inspected each year