As a representative office cannot engage in commercial or profit making activities, it is mainly utilized to perform secondary business activities mandated by a parent company established abroad:
- Studying the market in another territory while promoting the foreign company
- Creating a contact network, gathering information and developing advertisement
- Renting commercial and residential premises
- Due to the limited operational range, the average duration of a representative office is 2 years
In such a configuration, the representative office cannot sign contracts or bill customers. However, this form of implementation allows foreign companies to perform marketing and research activities in order to see if China is a viable option. Due to the limited operational range, the average duration of a liaison office is 2 years.