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Representative Office registration in China

Last Updated: April 17, 2021

Information provided below will guide you to:

In Mainland China, there are 4 modes of business presences for foreign investors: WFOE- includes Free Trade Zone company(83%), Representative Office(10%), FIPE(2%), Joint Venture(5%). About 10% of PtC's clients chose Rep. Office as their China business entity, a roughly comparison  between these 4 modes, check the Comparison Chart.

Introduction of Representative Office (RO)

new:According to State Administration of Industry and Commerce's file: Gong Shang Wai Qi [2010] No.4, PARENT COMPANY must be established for more than 2 years

Representative Office (RO) is established by foreign companies to engage in business liaisons, quality control, product promotion, market research, exchange of technology and other permitted activities in China.

ROs are not allowed to directly engage in operational activities, RO can't issue official invoices, nor receiving payments from it's clients. State Administration of Industry and Commerce (SAIC) usually specifies in scope of business, as it shown in the Registration Certificate of ROs, that ROs can not engage in direct operational activities. Therefore, it's not a form of foreign direct investment (FDI) in China. However, some ROs are engaged in operations in a lawful or tacitly permitted way and constitute one of the direct foreign Investment forms in China, for instance: ROs of foreign law firms, ROs of foreign airlines etc.

 

A Representative Office in China may only engage in non-profit making activities, it can carry out the following functions:

  • Conduct research and survey for its parent enterprise in the local market;
  • Liaise with local and foreign contacts in China on behalf of the parent enterprise;
  • Conduct research and provide data and promotional materials to potential clients or trading partners;
  • Act as a coordinator for the parent enterprise's activities in China;
  • Make travel arrangements for parent enterprise representatives and potential Chinese clients;

Under no circumstances may a Representative Office do the following in China:

  • Directly engaged in any business for profit;
  • Sign contracts or deals on behalf of the parent enterprise;
  • Represent any firm other than its parent enterprise;
  • Collect money or issue invoice within China for services or products;
  • Buy property or import production equipment.

Features of a Representative Office

1.1. Legal Status of a Representative Office
The Representative Office is a non-legal entity operating representing it's parent company overseas. A representative office is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed but may act as a liaison and promotion office for its parent company.

1.2. Name
The name of the Representative office should be in the form of "Name of the Enterprise + Name of the City + Representative Office".

1.3. Business Address

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.

1.4. Social Security in China. new

A new rule on foreign employees’ social security in effect starting October 15, 2011. It is said that if a company hires a foreign employee, the company shall register this employee with the local social security authority within 30 days of the employee receiving their work permit.

1.5 Monthly Cost to maintain a Rep. office in China:

Last Updated: April 17, 2021

To take Beijing as a sample to see roughly how much would it cost monthly to operate a Rep. office in a city like Beijing:

note: this sample is based on one Chief Rep. from abroad, 2 local emploees with 3-10 years working experience) with a 3 working stations office in a serviced office.

Beijing Representative Office monthly expenses Forecast Sheet
No  Running expenses Amount (RMB)
1 Office rental and management fee 12,000
2 Salary for Chief Representative 31,000
3 Salary for local employee (10,000RMB and 20,000RMB)  30,000
4 Social Insurances and Housing Fund of employees  20988.90
　 Pension Insurance (20%) 9475.80
　 Medical Insurance (10%) 4737.90
　 Injury Insurance (0.5%) 236.90
　 Unemployeement Insurance (1%) 473.79
　 Maternity Insurance (0.8%) 379.03
　 Housing Fund (12%) 5685.48
5 FESCO fee (a local HR company takes care of social securities) 1,500
6 Other miscellaneous 5,000
7 Bank charges 500
8 Accounting service fee  2,200
9 Annual audit and check fee is 10,000RMB per year  834
　 Total monthly expenses (tax excluded) RMB 125,012 per month
Note: According to the social Insurance rules, when the salary is more than 17,379 RMB per month, the base of calculating Social Insurance and Houding Fund will be 17,379RMB. 
Period Beijing Representative Office taxes Amount (RMB)
Monthly  Individual Income Tax for Chief Representative - employee has to pay 12,682 per month
Monthly Individual Income Tax for two employees - employee has to pay 2,477 per month
Quarterly Corporate Income Tax (it is quarterly expenses/80%*15%*25%) employer has to pay 5859 per month
Annually Stamp Duty ( annually office rental *0.1%) -employer has to pay 144

 

 

More information about Rep. Office:

Contact Our Regional Partners in India (Mumbai, Delhi), Singapore, Malaysia (Kuala Lumpur), China (Beijing, Shenzhen, Guangzhou, Shanghai, Suzhou, Ningbo, Hangzhou or Hong Kong) for more details:


Office Hour: Monday- Friday 0930AM-1730PM China, Singapore & Malaysia:(GMT+8); India: (GMT+6)

Beijing & Northern China Office:
E-mail: gifty@pathtochina.com
5F, SK Tower, 6A Jianguomenwai Ave., Chaoyang District, Beijing 100022, China
Tel: (86-10) 5166.4212 GMT+8 (English and Mandarin)
Regional Manager: Ms. Gifty Jia [-Bio-]

Shanghai & Eastern China Office:
E-mail: info@pathtochina.com 1038 West Nanjing Road, Suite 2508, 25 Floor, Westgate Tower, Shanghai 200040, China [-MAP-]
Tel: (86-21) 5108.8535 (English and Mandarin)
Regional Manager: Ms. Wendy Wang [-Bio-]

Ningbo Office:
E-mail: info@pathtochina.com Suite 2925 South Tower, 1299 Yinxian Ave., Yinzhou, Ningbo 315040
Regional Consultant: Mr. Dean Dong [-Bio-]
Tel: (86 574) 8716.4655 GMT+8 (English and Mandarin)

Hangzhou Office:
E-mail: info@pathtochina.com No. 2, 1785 Jianghan Rd.(by Binsheng Rd.), Binjiang District, Hangzhou 310051, China
Regional Consultant: Ms. Lim
Tel: (86-21) 6218 9991 GMT+8 (English and Mandarin)

Shenzhen & Southern China Office
E-mail: info@pathtochina.com
6009 Yi Tian Road, Suite 2306, New World Tower, Shenzhen 518035

Hong Kong Office:
E-mail: info@pathtochina.com
Suite 1701, HeNan Building, 92 Jaffe Road, Wanchai, Hong Kong[-MAP-]
Tel: (852) 6877.8862 GMT+8 (English)
Regional Partner: Simon Lee
Guangzhou Office:
161 West Lin He Rd., 23F, Tower A, Center Plaza, Guangzhou, 510620
info@pathtochina.com

Singapore & ASEAN Office
E-mail: info@pathtochina.com
Tel: (65) 8459.8655 Address: 218 Orchard Road, 6F, Singapore, 238851

Kuala Lumpur & Malaysia Office
E-mail: info@pathtochina.com
1 Mont Kiara, Level 13A, Wisma Mont Kiara, No. 1 Jalan Kiara, Mont Kiara, 50480, Kuala Lumpur, Malaysia
Tel: 010.3738.398 (English, Mandarin, Malay)

newNew Delhi & India office:
E-mail: info@pathtochina.com
Ramdhan Tower, E-57, Sector-63, Noida

Mumbai
E-mail: info@pathtochina.com
Plot 175, Santacruz, East Mumbai
India Partner: Mr. Narendra Kumar

Rest of China: [Click for more details...]

Public Holidays in China: Jan. 1, Feb. 2-10, Apr.5-7, May 1, June 7-9, Sep. 13-15, October 1-7 Malaysia: Jan. 1, 21, Feb. 1, 5-6, May 1, 20, 22, June 5-6, August 12, Sep. 2, 9, 16, Oct. 28, Dec. 25 Singapore: Jan. 1, Feb. 5-6, May 1, 20, June 5, August 9-12, Oct. 27-28, Dec. 25


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