Representative Offices (ROs) are established by foreign companies to engage in business liaison, product promotion, market research, exchange of technology and other permitted activities in China .
- The capital required is at a low of US$12,050 (RMB100,000)
- The activities which can be performed by a RO are limited. It is not allowed to provide services and sell goods
- Local staff should be hired via government admitted agents
- Although a RO is not allowed to provide services and sell goods, it is still liable to tax liability in the basis of expenses incurred
At the beginning of setting up the Representative Office, it is advised to decide the place and building where office is going to be located first, as the address of the proposed office will have to be mentioned in the application for approval. Note the business address must be located in commercial buildings approved by the government.
Chief Representative is the legal representative of the company in Shanghai , appointed by the board of directors of its parent company. Local representative is not required. Normally, if the chief representative does not intend to stay and work in Shanghai for over 90 days (within a year), no employment visa is needed. In case that the chief representative is a foreigner and intends to stay in China for over 90 days in a year, employment visa is needed.
CRITERIA FOR GRANTING APPROVAL
Note that the Chinese Government works on an ˇ§approval system' instead of a ˇ§registration system', that is, the application may be rejected without any reason given. It is therefore important that the necessary requirements should be fulfilled and documents required by the government must be fully and accurately submitted. Some of the requirements are:
- The parent company should have at least one year's operating results
- A business address located in a building, which is approved by the government to house foreign enterprises, is required
- If the documents are not in Chinese, certified translation by approved translator are required
- Notarization of statutory documents of the parent company may be required
Our services include :
- Preparation of pre-establishment documents (minutes, power of attorney etc.), arranging translation, notarization and certification form various authorities.
- Drafting of necessary project proposal, feasibility study report
- Engaging PRC auditors for the examination of capital injection and annual examination
- Employment of local staff on behalf and completing formalities in accordance with labor laws
- Other post-establishment registration work
If you have further queries concerning the setting up of a Representative Office, please feel free to contact us .