Registration of representative office in China is the most simple and quick form of organization of business structure for representing interests of foreign parent company in China, legalization of your presence here and studying Chinese market.
If your business related to China you may need to register representative office here to represent the interests of your company:
- to conduct Chinese market research (products, manufacturers, prices etc.) for your company;
- to search of Chinese customers for the products or services of your foreign company, make advertising of your foreign company;
- to make control at placement of orders at Chinese factories of China, and track order fulfillment process, check quality of the ordered goods;
- to establish and maintain contacts with suppliers, customers in China;
- to hire officially local staff and provide visa support to foreign employees, so that they could work on a permanent basis for your company, and so on.
Below you can find the terms of registration of Representative Office in China:
How to make a representative office in China? With this question faced by entrepreneurs, who in the course of business related to China, there is a need to open an office here, officially hire employees, so that they have been working on a permanent basis to represent the interests of foreign parent company.
Relatively easy and quick registration process: it takes a month to register representative office of foreign company in China
You can legalize your presence in China: officially rent an office, hire local staff and provide visa support for foreign employees
Maintenance of representative office in China is simple: just need to file tax returns in time, and pass on annual basis audit and annual examination
Period of Representative Office registration in China:
Registration of Representative Office in China takes approximately a month and a half (after legalized documents of founder and office rent documents are provided). Our company provides services of registration of foreign companies representative offices mainly in Guangzhou (south of China, Guangdong province), but we can also register a representative office of your company in other regions of China.
The registration process includes following stages:
• registration stage (after providing all required documents): about a month
• post-registration stage (making of seal, registration in the statistics office/tax offices, open bank accounts): about 2 weeks
• processing of representatives visa documents for foreign employees (work permit and residence permit): after the submission of all required documents approximately two months (in future annual renewal will take 2-3 weeks)
List of documents required for Representative Office registration in China (Guangzhou):
Important note: term of existence of the parent company must be at least 2 years.
- Legalized copies of the following documents of parent company (should be legalized in a Consulate of China. Hong Kong company is subject for a simplified procedure of legalization through an authorized notary public in Hong Kong):
- business license or certificate of registration (for Hong Kong company: Certificate of Incorporation);
- certificate of registration with tax authorities (for Hong Kong company: Certificate of Business Registration);
- accounting or audit report for the last year (for Hong Kong company: Annual Return);
- general representative and common representatives appointment letters s (usually certified by a notary public in the personal presence of the director of the parent company, since the appointment letters need signature of the director);
- power of attorney for the right to sign documents (notarized in the personal presence of the director of the parent company);
- bank reference letter from the foreign bank where account of the parent company is opened (note: the bank must be in the same country where the company is registered, for example, if the parent company is Hong Kong company, so the bank that issued the bank reference letter must be in Hong Kong too);
- the articles of association of the parent company (in Chinese or accompanied by a translation into Chinese) (certified by a notary public in personal presence of the director of parent company).
Note: The translation of all documents into Chinese is part of the legalization process in the Chinese consulate.
- Legalized passports of general and common representatives in China Consulate in the country where passports are issued. Note: this procedure is required only for foreign representatives, not needed for representatives who are citizens of China.
- Legalized certificate of criminal record (only for citizens of some countries)of general and common representatives in China Consulate in the country which nationality they possess. Note: this procedure is required only for foreign representatives, not needed for representatives who are citizens of China.
- Documents regarding office rent in China (Guangzhou):
- original, for a period of not less than 1 year, having registration mark of District Office for the registration of real estate transactions;
- landlord documents: identity card of natural person or certificate of registration of corporate entity, certificate of ownership of office space, if necessary power of attorney for signing rent contract. Documents must be authenticated by the signature or seal of the landlord, in the column "purpose of the premises" of ownership certificate should be written non-residential status (for office or commercial use).
- Photos (two inches, on a blue background, 8 pcs.), a copy of main page, last visa page and stamp on the entry of each representative passport, residence address, work and educational background.
Note: one Representative Office is allowed to hire maximum three foreign representatives (one general representative and two common representatives). Restriction applies only to foreign persons (no restrictions on the employment of Chinese citizens).
Cost of Representative Office registration and maintenance in China:
- banking commission for issuing a bank reference letter.
- legalization expenses: legalization of parent company documents, bank reference letter, letters of appointment of representatives in China Consulate in the country of registration of the parent company (if a parent company is Hong Kong company legalization process is simplified, it takes 3-4 days and costs about US$870), legalization of passport and certificate of no criminal records of representatives in China Consulate in the country of documents issue. Note: criminal records certificate is required only for citizens of some countries.
- renting office expenses (usually in Guangzhou at the beginning consists of rent payment for the first month + deposit at amount of 2 months rent + commission of real estate agent at amount of 50% of the monthly rent).
- our company services on registration of representative office in Guangzhou (China), including processing of visa documents for foreign representatives: RMB9,000.00. State fees are to be paid separately.
- amount of state fees for registration of Representative Office in China: about RMB950.00.
Expenses on maintenance of Representative office in China (Guangzhou):
- Accounting and visa services: RMB1,500.00 per month;
- Taxes (approximately 15% of the costs), main taxes are to be paid on a quarterly basis;
- Social security fees for employees (approximately RMB1,000.00 per month for each person).
- Annual expenses (paid once a year):
- annual audit report for tax authorities: fees amount depends on the size of annual costs of representative office (min. RMB1,500.00).
- annual audit report for Industrial and Commercial Administration: fees amount depends on the size of representative office expenses or assets (min. RMB2,000.00).
- legalization of documents of parent company in China consulate.
- annual examination of representative office documents in Industrial and Commercial Administration: RMB1,500.00/once a year.
- visa (residence and work permits) state fees: about RMB854.00 per person (the amount can vary for citizens of different countries).
- annual mandatory contribution to the Fund of disabled in Guangzhou, amount is calculated as follows: the average number of representative office employees for the year x 1.5% x average annual salary for Guangzhou for the year (RMB36,292.00 was the average annual salary for Guangzhou in 2010).
Pros of registration a representative office in China:
- possibility of legal conduct of activity in mainland China. Typical activities of representative offices of foreign companies are: search of suppliers and customers for the parent company in China, maintenance of contacts between the parent company and the Chinese partners (in particular, negotiating with Chinese suppliers, conclusion of contracts on behalf of the parent foreign company), marketing research, monitoring the quality of products, parent company products or services advertising and other similar actions in the interests of the parent company;
- possibility to officially hire local and foreign employees, possibility of the official social security payments (often a necessary factor for hiring skilled Chinese employees);
- China visa support for foreign employees of representative offices (a work permit and a residence permit, with subsequent annual renewal), as well as for spouses and children of foreign employees;
- relatively easy and quick registration process of representative office — about a month for a registration (after all required documents are provided);
- no need to pay registered capital.
Cons of registration of representative office in China:
- representative office of foreign company has no right to conduct direct business activity in China, for example directly make import and export procedures here, or make sales in domestic market of China, has no right to receive income to its bank account (only funds from parent company for its maintenance), can't issue China tax invoices;
- payment of taxes in China (based on its expenses): enterprise income tax, vat, construction tax, education tax, for employees — individual income tax, social insurance;
- maintaining of financial statements, passing audits and inspection in Commercial and Industrial administration once a year (note: legalized copies of parent company documents are required).