Representative Office Registration, Set Up a Rep Office in China

What is a Rep Office in China?

Representative Office Registration in China

A Representative Office in China, also known as a ‘RO’ or a Resident Representative Office of Foreign Enterprises in China, is basically a resident representative office of a foreign business that’s operating within China. This is to engage in indirect business activities in Mainland China on behalf of the foreign business. With a Representative Office in China, foreign businesses are able to carry out business transactions and other tasks pertaining to business that have been permitted by Chinese law on foreign business.

A Representative Office in Chinais allowed to take up indirect business activities in China and carry out operational activities related to business on behalf of foreign enterprises. This can include, contacting, product promotion, market surveys, and technology communication. The daily operations of the RO must follow China law, including representative office china regulations, tax cases, labor laws, China representative office laws and rules, including other relative supervision regulations.

It is important to note that a Representative Office is just an office registration instead of a business entity or limited company. This means, all civil liability is taken on by the foreign company (head office/ mother company). A Representative Office is not a whole business institution. It is just an assistance unit that is used by the head office of a foreign enterprise. Its main goal is to help a foreign company enter the Chinese market.

Why is Setting Up a Representative Office in China Crucial for Foreign Businesses ?

Setting up a RO in Chinais a great way for foreign enterprises to enter the Chinese market quickly, and with a low cost. Besides that, a Representative Office Registration in China also provides more chances for the foreign enterprises to get to know the Chinese market. It provides foreign companies with the chance to carry out market research, and get familiar with market requirements and customs, local laws and how to operate as a business in China. At the same time, Representative Office also can supervise other joint venture enterprises and how they work, to establish the relationship with partners and customers. Normally, a RO in China can take up all forms of indirect business activities, after stating them explicitly in the setup file.

Important:A representative Office can't charge any fees or provide any relative contracts that may obtain earnings. While laws do not allow Representative Offices to directly engage in operational activities, that does not mean a RO cannot be involved in any economic activities. After a Representative Office Registration in China the RO is allowed to participate in economic activities, and sign the contract which is helpful for maintaining business operation.
Our services for a Representative Office Registration in China covers the largest cities in China, such as, Shanghai, Shenzhen and Guangzhou.

The Advantages of a Representative Office

China Representative Office Registration

• The tax calculation of a Representative Office in China is different as compared to WFOE or a JV on its running expenses. There is a 10% tax on the GROSS EXPENSES of a RO.
• A Representative Office in China also allowed to engage in business activities such as, market research, publicity activities relate to company product or services.
• No registered capital required for incorporation, which means it is accessible for most foreign companies; Low cost for setting up (compared to exclusively foreign-owned enterprise), no lowest limit for a registered fund, no requirement for contributed capital.
• It is helpful to apply for a residence permit.
• It is easy for an accountant to process accounting and tax filing.
• Foreign investors can quite easily set up a Representative Office in China if they want to enter the Chinese marketplace, which is otherwise not allowed without first setting up a RO in China, because China may alter the foreign investment law of the people's republic of China more freely because of the promise that China made it for joining WTO. Setting up representative office means they can get into the Chinese market and get contact resources and know more about the market.
• For those foreign investors who want to invest Chinese mainland, the first thing is to carry out a market survey, then decide whether to make a long-term investment or not, using their Representative Office in Chinaas a bridge to enter the Chinese market.

The disadvantages of a Representative Office

While there are many benefits of a Representative Office Registration in China, there are also some restrictions, such as the following:

A Representative Office in China is not permitted to carry out direct commercial activities. A Rep office is only allowed to engage in business functions, such as, market surveys, and publicity activities that are relate to company products or services.
ARepresentative Office in Chinacannot sign a commercial contract with a supplier, cannot invoice or create income, the head office must do such operations.
A Representative Office in China has no right to hire Chinese employees directly without authorized intermediary organs of talents.
A Representative Office in Chinahas to employ Chinese mainland employees by licensed recruitment agencies.
Rep Office in China may not remit profits out of China.
Actual expenditure with less controllability calculates tax declaration for once a month and tax audit for once a year.
There are strict auditing standards for daily operating expenses and bank's foreign currency account.
Government policy restrictions, taxation bureau, industrial and commercial administration are sternly managed.
Representative Office Registration in China has been deemed as the most accessible entity to set up a branch office in China for foreigners. Many clients presumed that they could switch a Rep Office to a WFOE, then they "can start making money" in China. Well, the truth is the switch involves an expensive Rep Office shutdown and a brand new WFOE incorporation.

Representative Office in China has below restrictions, but not limited to:

Rep Office in China is not permitted to carry out direct commercial activities. Rep office can only engage in the market survey, publicity activities relate to company product or services;
Rep Office in China cannot sign a commercial contract with a supplier, cannot invoice or create income, the head office must do such operations;
Rep Office in China has no right to hire Chinese employees directly without authorized intermediary organs of talents;
A representative office has to employ Chinese mainland employees by licensed recruitment agencies;
Rep Office in China may not remit profits out of China;
Actual expenditure with less controllability calculates tax declaration for once a month and tax audit for once a year;
There are auditing standards for daily operating expenses and bank's foreign currency account.
Government policy restrictions, taxation bureau, industrial and commercial administration are strict in supervision.
Representative Office Registration in China has been deemed as the most accessible entity to set up a branch office in China for foreigners. Many clients presumed that they could switch a Rep Office to a WFOE, then they "can start making money" in China. Well, the truth is the switch involves an expensive Rep Office shutdown and a brand new WFOE incorporation.

For the most detailed and updated China WFOE register information, please check:

The Ultimate Guide for China WFOE Formation in 2018.

What are the Requirements for Setting up a Representative Office in China?

The legal certificate of a foreign enterprise

*Foreign (regional) legal business operations issued by the country or regional authorities to provide proof of the original; if not, shall submit a notarized document, distributed by the local notary office or a lawyer issued by the embassy or consulate certification documents.

*Bank credit certificate of foreign enterprises

Original, bank official stationery, signed by the bank head and stamped with the bank seal;
Credit certificate content should include: account name, deposit balance, and reputation evaluation;
Valid for six months of the issue;

Letter of appointment of the chief representative

The letter of appointment of chief representative should be printed on the official stationery;
In addition to Hong Kong and Macao, other countries (regions) should be able to provide their documents in foreign language (language of origin) and Chinese for setting up a RO in China.
The letter of appointment of the chief representative should be signed by the chairman or general manager.

Resume of chief representative

The resume needs to include the name, date of birth, nationality, academic calendar since high school, and work experience (up to date).

Chief representative's identity certificate

Foreigners should provide copies of their passport
Passports and long-term residence permits for Chinese citizens living abroad for a long time
Chief representative two-inch photos two pieces
A labor contract needs to be signed if the chief representative is Chinese

Certificates Issued to Representative Office

Registration Certificate of Representative Office
Representative card
Corporate seal
Open bank account permit certificate

China Company Incorporation Form Downloads

What is the Cost of a Representative Office in China?

The following are some of the costs of setting up a Resident Representative Office of Foreign Enterprises in China:

Cost of Setting Up a Rep Office in China

Mother Company’s Certification &Notarization Fee
China Representative Office License Application Fee
China Representative Certificate Application Fee
China Representative Office Chop Fee
China Representative Office Chop Record Fee
Representative Office China Bank Account Opening Fee
China Representative Office Tax Registration Fee

Contact Us Today

To find out more about our services please feel free to contact us at +86-020-2917 9715 or send us an email with your queries to proposal@set-up-company.com.