A foreign company can make use of a representative office to carry out certain operations in China. Although the permitted business scope of this type of office is limited, opting for this separate legal entity can offer a low-cost and simple solution for operating in China. INS Global has the experience and expertise to help you overcome the challenges of creating a representative office in China. We understand the requirements whether you are looking to establish a Shanghai representative office, an office in Beijing or elsewhere.
Why create a representative office in China?
A representative office cannot engage in commercial, profit-making activities. It is generally used to carry out marketing and research with the aim of better understanding the Chinese market and determining the viability of a specific project in this market. This is in contrast to a branch office, which is a direct extension of the parent company and can perform core business activities such as engaging in sales or establishing contracts.
Opting for a representative office in the Chinese market offers certain advantages:
- Low setup cost: no minimum capital required;
- Low taxation;
- No invoicing Chinese clients, so no administration costs;
Steps required for a representative office in China
- Rent commercial premises and accommodation.
- Obtain documentation from property’s landlord, including rental agreement and certificate of real estate ownership.
- Register with local administration for industry and commerce.
- Obtain approval for Business Registration License.
- Study the market of another country while also promoting the foreign company.
- Create a contact network, collect information and develop advertising.
- Due to its limited operational scope, the average duration of a liaison office is two years.
Conditions and restrictions in creating a representative office
- A Chief Representative responsible for operations must be assigned by the parent company.
- On a monthly or quarterly basis, the representative office is subject to the taxation of 10% on its spending.
- Representation offices can only be located in “Category A” or government-mandated buildings.
INS Global accompanies and advises you through the opening of a rep office in China. Like numerous professionals who have been able to develop their activities in China, benefit from our expertise and our knowledge of the economic and cultural environment in which your representative office will evolve. Let us show you the way through the process of representative office registration in China.