The Registration of a Representative Office in China
The Activities of a RO (Representative Office)
Before your representative office activities, here is the first step to know the China registration Law and regulation.
Laws and Regulation
China
Foreign Companies may set up a “RO” in China
Commercial activities
Indirect business activities
Such as: business liaison/contract, introduction of products, market research, business information gathering, technology information exchange, and other preparatory and auxiliary work within the company's business scope
Not allowed to conduct
Direct business activities
Such as: purchase and/or sale of goods in its own name
The Government Fees for the Establishment of a RO (Representative Office)
The government fees include:
Relevant registrations fees, such as the Industry and Commerce Registration Fee
The tax registration fee
Code registration fee
The annual renewal fee for a RO
Registered Capital
No registered capital is required for the registration of a Representative Office.
Documents Needed for the China Registration of a RO (Representative Office)
The basic documents needed are as follows:
(1) The original Business Registration Certificate of the foreign company, issued by the local registration authority of the country/region where the company is located. If the said Certificate is a photocopy, it needs to be notarized in the country/region where the company is located, or to be legalized by a Chinese embassy/consulate in the country/region where the company is located.
(2) The original bank reference letter issued by a bank in the country/region where the company is located.
(3) The tenancy contract for the use of an office in China by the RO, with a term of at least one (1) year, which needs to be registered with the local house administration office in China, together with a photocopy of the landlord's Ownership Certificate. Only houses for business use are allowed to be rented as an office of a RO, houses for residence use are not allowed to be used as an office
(4) The Appointment Letter (to appoint the Chief Representative of the RO) issued by the foreign company, signed by the chairman of the board of directors of the company, and stamped by the company if it has a stamp.
All the above documents shall be in Chinese. If some of them are in foreign language, they need to be translated into Chinese.
China taxation
According to the Chinese tax laws and regulations, whether a RO needs to pay tax or not depends on the nature of the RO and the activities it conducts.
There are mainly two kinds of tax which a RO needs to pay. One is called the Business Tax, the other the Corporate Profit Tax.
RO is exempt from China taxation if:
It conducts activities such as business information gathering, liaison and other preparatory and auxiliary work in China for its headquarters to produce goods or sell the goods produced by the headquarters itself; or,
It conducts activities such as business information gathering, liaison and other preparatory and auxiliary work in China for its headquarters' trading of the goods owned by the headquarters itself; or,
It is entrusted by companies in China to be agent for the exports of goods from China.
The Chief Representative of a RO (Representative Office)
Either Chinese or foreigner can be appointed by the headquarters to be the Chief Representative of a RO, who will be in charge of the RO.
NOTICE: The material contained herein is in the nature of general comment and information ONLY and neither purports, nor is intended, to be advising on any particular matter. Readers should not act or rely upon any matter or information contained in or implied by the publication without taking appropriate professional advice.
