Foreign enterprises can establish representative offices in China upon application and approval.

Prerequisite Condition

According to the Chinese Government regulations, foreign traders, manufacturers, shipping agents, economic organizations and other groups shall report, according to their nature of business, to Ministry of Foreign Trade and Economic Cooperation (Moftec) or their relevant ministries, committees or Bureau which are authorized for the examination and approval of the set-up of representative offices.

The business activities of Representative Office can only be within the range of business connections, products introduction marketing, technology exchange and consulting service and etc. Direct business activities are prohibited.

Characteristics of a Representative Office

Representative office is a non-legal entity operating in China representing its parent company. 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. More...

Application

Application is a two-step procedure. Step one: applicant should obtain approval from the respective authorities. Step two: registration should be made with the Administration For industry and Commerce. The foreign enterprise may engage an agent authorized by local Foreign Economic Relations and Trade Committee to handle its application on its behalf. More...

Approval Authorities

Authorities for approval are distributed among various State Council Departments and are delegated to their local offices. Applicants should apply for approval from different departments (at their local offices) according to their core activities. Some of the major types of industries and their approval authorities are:

Name of a Representative Office

The name of the Representative office should be in the form of ¨Name of the Enterprise + Name of the City + Representative Office (or Office)〃.

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.

Chief Representative

Chief Representative is the legal representative of the Representative in China, 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. More...

Criteria for Granting Approval

Note that the Chinese Government works on an ¨approval systemˇ instead of a ¨registration systemˇ, 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:
(1) The parent company should have at least one year's operating results;
(2) A business address located in a building, which is approved by the government to house foreign enterprises, is required.
(3) If the documents are not in Chinese, certified translation by approved translator are required.
(4) Notarization of statutory documents of the parent company may be required.

Documents Required for Application

The applicant shall complete and submit "Form for Establishing Representative Office by Foreign Enterprises〃 and ¨Form for Staff of Representative Office〃 together with the following documents:
(1) An application duly signed by the chairman of the board or general manager of the foreign enterprise with the following details: name of the representative office, name of the chief representative, scope of business, duration and address, etc;
(2) Statutory documents of the parent company issued by authorities of the country or region of origin; e.g. Constitution, Certificate of Incorporation, Business Certificate, Tax Certificate;
(3) A ¨capital and credit certification〃 letter issued by a bank which has business relations with the applicant certifying its financial and credit standing;
(4) Power of attorney issued by the applicant to the person who shall be the Chief Representative, his curriculum vitae and photograph;
(5) Licence issued by the building in which the representative office will occupy;
(6) A brief summary of the operations and business of the company.

Examination and Approval Procedures

(1) The Shanghai Municipal Foreign Economic Relations & Trade Commission will examine the application. Upon approval, the Commission will issue an Approval Certificate to the applicant;
(2) The applicant shall, within 30 days of the approval, apply with the Shanghai Administration For industry and Commerce together with the Approval Certificate issued by the Commission and all the documents refer to as above. A Registration Certificate, a representative card and work permit will be issued to the applicant;

Post establishment Registration Procedures

Upon the issuance of the Registration Certificate, the applicant is required to complete post-establishment registration procedures, including:
(1) Making of Office Stamp (Office Seal)
(2) Opening of bank accounts
(3) Registration with the Inland Revenue, both national and local tax
(4) Application of ¨Enterprise Code〃
(5) Registration with the State Statistic Bureau
(6) Registration with the Customs Office
(7) Application for Employment Visa (For foreign representative)
(8) Importing Office Equipment and Daily Necessities, if any

Service Charge

As the requirements and registration procedures are slightly different from city to city. Therefore, our charges for the registration of a Representative Office vary from city to city. As a general guideline, our charges are  are in the range from USD3000-USD5000. The charges do cover statutory filing fees, legalisation costs and translation services. In particular, our charges normally cover the following services:

(1) Prepare pre-establishment documents (minutes, power of attorney etc.), arrange translation, notarization and certification form various authorities.
(2) Prepare and submit registration forms
(3) Obtain Certificate of Approval and Certificate of Registration
(4) Employ local staff and complete formalities in accordance with labor laws
(5) Post-establishment registration work, such as State and Local Tax registration etc
(6) Open bank account(s)

Through our own offices in Shenzhen and Beijing and affiliated agents in other  major cities in China, Kaizen shall follow through the whole establishment process and save investors time and trouble.

Time Required

It normally takes 30 days from receiving instructions and full particulars and necessary documents form the applicant to issue the Approval Certificate. Thereafter, the Post-establishment Registration procedures take about 30 days. However, a registration could be completed in 30 days.

Procedure for Change and Extension of the Representative

To change any registered items (e.g. Name of the organization, location, scope of business), or when the expiration date of registration certificate is imminent, the office should immediately report to the registration authorities for relevant procedures. The validity of resident representative offices of foreign enterprises is three years for each approval. In case of extension, the office should report to its proxy three months ahead of the expiration date for the extension applying procedures.

Introduction to China Representative Office
Representative Office Registration Procedures
Legal Status of Representative Office
Business Scope of Representative Office
Chief Representative
Taxation of Representative Offices