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Overseas Representative Office |
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| 1、General |
As a representative office of an overseas-invested enterprise acts as a liaison in China, it is not regarded as an independent legal entity. Therefore, a representative office is not allowed to execute direct profit-making business activities, such as signing up purchase or sales contracts, taking in revenue, making out an invoice or outward remittance to an overseas country, yet it is authorized to open up bank accounts, recruiting work staff to act its role as a liaison. Potential clients including suppliers shall sign up contracts with the parent company instead of with its representative offices. Therefore, overseas companies who would like to set up JV or WOFE in China shall consider setting up representative offices first to investigate its possible domain in China’s marketplace.
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| 2、 Advantages |
| Convenience and relatively shorter lead time make representative office a preferred choice for many overseas companies. Different from setting up a WOFE, there is no specific minimum investment capital requirement for a representative office. Its setting up lies mostly in documentation preparation and governmental approval. The governmental approval takes 30 working days after a complete set of documentation is handed over. |
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| 3、 Business Scope |
A representative office is legally not allowed to conduct direct business activities or signing up contracts with its users or clients, which means that the representative office is only authorized to conduct “indirect business activities” namely:
Business Contact
Product Display
Market Investigation
Technology Exchange
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| 4、 Term and Expiration |
Generally speaking, an overseas representative office in China will be expired within one year. Representative offices of insurance companies or banks will be expired within 5 and 6 years respectively. |
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| 5、 Taxation |
| Based on Overseas Enterprise Revenue Tax Law and its local business tax regulations, representative office will pay WOFE revenue tax and its business tax which will be paid 15 days before each quarter. |
| Representative office may issue tax-free requests to revenue authorities if it meets specific requirements with certain qualification. |
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| 6、 Qualification |
| Officially approved overseas traders，manufacturers, shipping agents, contractors, consulting companies, advertising companies, investment companies, rental agents, and other economic organizations are qualified to apply for setting up representative offices in China. |
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| 7、 Representative Offices that Require Official Approval |
| (1)
To be approved by Ministry of Communications of P. R. China: |
| Overseas shipping enterprises, ship agents, multimodal transport enterprises and other related enterprises and organizations, overseas public transportation and ship inspection organizations; |
| (2) To be approved by Civil Aviation Administration of P. R. China: |
| Overseas aerial transportation enterprises; |
| (3)
To be approved by Ministry of Justice of P. R. China: |
| Overseas law firms; |
| (4)
To be approved by the People’s Bank of China |
| To set up representative offices of overseas financial institutes in China shall be approved by the People’s Bank of China, which include commercial banks, investment banks, merchant banks, securities companies, fund management companies, foreign exchange agents, credit card companies and financial leasing companies that registered overseas ; |
| (5) To be approved by China Insurance Regulatory Commission: |
| Setting up a representative office of an overseas insurance company in China shall be approved by China Insurance Regulatory Commission, and setting up a permanent representative organization shall be approved by the People’s Bank of China. After China's 1998 administrative reform, official approval shall be carried out by newly-established China Insurance Regulatory Commission instead of by the People’s Bank of China. |
| (6)
To be approved by National Tourism Administration of P. R. China: |
| Overseas governmental tourism departments, international governmental tourist organizations and overseas tourism agents; |
| (7)
To be approved by Ministry of Finance of P. R. China |
A representative office of an overseas Accounting firm will not be set up until the firm is approved by China Registered Accountants Association or its authorized institute and acquires approval certificate issued by Ministry of Finance of P. R. China. |
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Required Documentation |
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| 1、1 copy of legal operation of an overseas company which requires to be certified by Chinese Consulate in the overseas country, and the copy of legal operation of a Hong Kong enterprise requires to be certified by China Legal Service (H. K.) Ltd. |
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| 2、 1 copy of overseas bank statement/credit report |
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1 copy of the first representative official’s resume in Chinese, 1 copy of passport; and 2 ID photos |
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1 company profile |
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1 copy of Legal Person’s passport |
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Other documents will be prepared by SFERA |
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Procedure Flow |
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| Pre-registration-Registration Certificate-Organization Code Certificate-Tax Registration Certificate-Statistical Registration |
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Duration |
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Pre-registration: 5 working days |
| 2、 Registration Certificate: 5 working days |
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Organization Code Certificate and Seal Carving: 3 working days |
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Tax Registration and other related procedures: 15 working days |
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Time spent on the above procedures may differ due to governmental efficiency. |
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Operation Flow Chart |
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| Sign up Contract-Client Provides Documents-SFERA Runs for All Certificates-SFERA Turns over Certificates to Client |
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