RO set up in China AC Consulting und Trading

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Establish Representative Office (RO)

Setting up a Representative Office (RO) is surely the simplest way to show presence in China. This kind of representation allows you to maintain indirect business relationship. It is a platform for networking activities. However, Chinese law does not allow to close a contract as well as to make any profits for RO. RO is a non-legal entity operating which representing its parent company and financed through the foreign parent company. Setting up a RO, a registration from the local authorities has to be obtained.
The establishment procedures described here are based on the assumption that the RO to be set up is not subject to approval by a competent approval authority. Under current rules, most RO's, in particular ROs of foreign companies that are engaged in manufacturing, trading, consulting, exhibition and procurement fall in this category.

  • No share capital is required
  • Setup is less procedure
  • Can exchange foreign currency into RMB
  • Can hire local staff via government admitted agents
  • Simple company and financial structure

  • Not business entity
  • Tax rate is high
  • No invoicing
  • Must be investment in company
  • Mother company needs to be at least 2 years old

Permissible Activities
  • ROs can be generally used for the following purposes:
  • Conducing market research
  • Introduction of products
  • QC facilitation or monitoring purchasing activities
  • Marketing and sales administration for sales conducted between China and your parent company
  • Administration for Group activities elsewhere in China
  • Business liaison

The Name
The name of the RO should be in the form of “Country + Name of the Enterprise + Name of the City + Representative Office”. For example, British ABC’s office in Shanghai is officially known as British ABC Consulting Co.,Ltd. Shanghai Representative Office

Hiring of Staffs
RO's are required to hire all of their local Chinese personnel, including any local Chinese appointed to the position of chief representative or ordinary representative, through Human Resource service companies designated by the government. Service companies approved by the Shanghai government to provide Chinese employees to ROs.
Foreign representatives approved by the relevant authorities receive a work and residence permit as well as the corresponding work visa.

Setup Key Points
Company applying for set-up RO has to be at least two consecutive years old
Takes around 1.5 months to apply
AC can undertake the one-stop service for basic registration to post-registration handling
Rep office shall not exceed four representative persons (including the Chief Representative)
Representative office's business registration certificate shall be inspected each year

Accounting Service for your China location. We offer full Buchhaltung for your company in China, for more details please contact us per mail

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