Representative office in China
We help you set up your strategic business unit in China, end to end processing, hassle-free.
Capitalize on Advantage China
China remains an attractive destination in Asia for global businesses backed by its geographical advantage and flourishing economic outlook.
Advantages
• Least capital injection required — as a Representative Office (RO) is not a legal entity, no minimum share capital is actually required
• Can hire local staff
• Can handle market research, sourcing, and project investigation for the parent company, which will execute the actual trading functions
Disadvantages
• Limitation in activity — no trading or invoicing is allowed
• Local staff must be hired through government-admitted agents
• Although it is not a profit center, cost expenses still attract tax liabilities
Setup Requirements
• Takes around one (1) month to apply
• A Chief Representative (CR) is to be appointed
• Company should be able to present a bank reference letter showing a 6-digit average balance in the past 6 months (in HK$ terms)
• An office premise rental agreement (or ownership document) valid for foreign investor use; the term should be at least 12 months
Tax Implications
• Chief Representative and local staff’s Individual Income Tax (IIT)
• Business Tax based on monthly operational expenses (BT)
• Income Tax based on annual operational expenses (IT)
• IIT depends on the salary amount, while BT and IT roughly amount to 10% of annual operational expenses
Documents required
• Certificate of Incorporation
• Member register
• Director register
• Last filed return to Company Registry
• Last filed return to Tax Department
• Company/Business profile and reason for setting up a Representative Office (RO)
• Minutes of board meeting to set up RO
• Minutes of board meeting to authorize Chief Representative
• Bank reference letter
Chief Representative:
• Valid passport copy
• Photos
• Resume
Application Letter:
• One to the Foreign Economic Relations & Trade Commission
• Another one to the Administrative Council of Industry & Commerce
Maintenance Cost
- License renewal – RO license has to be applied again once permit is expired. Maximum 3 years approval will be granted and depends on rental lease terms.
Accounting, tax filing and auditing
• Tax filing has to be done on a monthly and annual basis
• Moreover, there are statutory audits on the expense accounts and foreign currency bank account
• Service fee for monthly accounting and tax filing starts from RMB 2,500, while annual audit starts from RMB 5,000
Interested? Need a helping hand to decide?
Avail a free consultation with us. Let our experts suggest you the right solution.
Let’s discuss the possibilities and we would be happy to walk you through the requisite solution. We take pride in our market expertise and consumer satisfaction!
