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.
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.
Opting for a representative office in the Chinese market offers certain advantages:
- Low set-up cost: no minimum capital required;
- Low taxation;
- No invoicing Chinese clients, so no administration costs;
Steps required for a representative office in China
- Study the market of another country while also promoting the foreign company.
- Create a contact network, collect information and develop advertising.
- Rent commercial premises and accommodation.
- 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 representative 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.