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Trade Commissioner Service > Country and sector information > China > SME gateway > Establishing a Representative Office in China

Establishing a Representative Office in China

A Representative Office (RO) is an extension of a foreign company. If an RO signs a contract, the foreign company is bound by the agreement. ROs are permitted to engage in only a limited number of activities and is not allowed to make a profit. It can only be used to facilitate the activities of a foreign company in China such as:

If there is any violation related to their activities, ROs will be fined and their illegitimate incomes will be confiscated. As it is not a capitalized legal entity, they are not allowed to directly hire Chinese employees. Instead, they can employ local staff through a qualified labour dispatch agency, such as foreign enterprise service company (FESCO). The agency sends employees to work at the RO for a fee. ROs can directly hire up to four foreign nationals, and they are not needed to go through the agency.

Despite not having any revenues, they can still be taxed under Chinese law, at a percentage of their expenditures. The more an investor spends, the more it gets taxed.

They are a suitable option for companies procuring from China who require to have staff on the ground for quality control or keeping in touch with suppliers.

RO advantages

Establishment procedures

The overseas parent company needs to be in existence for at least two years to set up an RO. The procedure is as follows:

Representative Offices Setup Procedure in China

Text version

Pre-licensing 1-2 months:

  • Basic information collection from client (7 working days)
  • Name pre-approval (5-7 working days)
  • Acquire an office lease for at least 12 months (depends on clients/landlord)
  • Incorporation documents prepared by clients (depends on clients)
  • Apply with the AIC to issue a Business Registration Certificate (10-14 working days)
  • RO now legally exists

Post-licensing 1-2+ months:

  • Carve company chop, financial chop, invoice (“fapiao”) chop, and legal representative chop (1-2 working days)
  • SAFE issues Foreign Exchange Registration Certificate (if required)
  • Customs registration (if required)
  • Opening of RMB basic bank account (15-20 working days)

The first step is to register with the local Administration for Industry and Commerce department. Once it is approved and the Business Registration License is issued, the following post-registration procedure need to be followed:

Registration certificate

The foreign investor needs to submit the application documents to the relevant Administration for Industry and Commerce (AIC) to apply for a Registration Office Registration Certificate. Once the AIC issues a certificate for Permanent Representative Offices of Foreign Enterprises, the process is complete. The following documents must be submitted to the local AIC:

However, investors should note that AICs in different locations may have different requirements. Once the authority approves the registration, it will issue a Registration Certificate for the RO and issue Representative Cards to the Chinese and foreign employees. Establishment date will be the issuance date of the Registration Certificate and not the Approval Certificate.

Key positions

A chief representative needs to be appointed by the board of directors of the parent company who will be responsible for the RO's operations. Although Chinese laws do not clearly state the scope of the chief representative's authority, most government documents will require his or her signature.

Office/lease requirements

One needs to own or lease office premises to set up a RO in China and register it with the AIC.

While selecting an office location, investors need to make sure that the building is certified to house businesses and lease units to ROs. They would also need to negotiate with the landlord to get an official VAT invoice for the rent. The landlord also needs to provide the investor with copies of the following documents:

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