Templegate Limited
Integrity & Credibility
(Trust  or Company Service Provider - Licence no. TC002809)
 
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Representative office in China

 Key Points
 
    Must be 2 years old company
 
    Not separate entity 
 
    Can't issue invoice
 
    Can't limit liability 
 
    4 foreign employees 
 
    Can't hire local direct 
 
    File account monthly
 
    15% tax on expenses
 
We provide our service to world wide clients for setting up a representative office in China. The foreign company wishing to setup its representative office must be at least 2 years old. (shelf company is accepted).

Status of representative office in China

The representative office of a foreign company is not a china business entity to conduct any business activities. Theforeign company (including companies incorporated in Hong Kong) will apply to register it's representative office and it will be not a branch office of any foreign company. The representative office does not have separate entity status, there is no parentcompany or mother company or subsidiary company relationship betweenforeign company and its representative office in China. The representative office cannot offer services and sell goods in China.

Registration of China representative office

The representative office must be registered with Chinese authorities and obtain a registration certificate. The Administrative Bureau for Industry and Commerce of a city will issue a “Registration Certificate of Foreign Enterprises Permanent Office in China”. Application for renewal must be made before 30 days prior to expire date Registration Certificate.

Selection of name for China's representative office

The name of representative office must be same as its foreign company and in case of default of payment or any misconduct by the representative office , its foreign company will be held liable. The foreign company will fund operations of its representative office in China, elect a chief representative (its employee) and submit his details along with application of representative office.

Foreign Staff employment for China representative office

Not more than 4 foreign employees allowed to be base in the the representative office of a foreign company in china. They deemed to be representative of foreign company and can live in China;
  to liaison with supplier and related parties.
  to conduct inspection of goods for quality control.
  assist in arrangement of shipping of goods for export.
  source new suppliers to export Chinese made goods.
  provide technology to produce products in Chinese factories.
  assist its company’s agent in china for marketing its product into China market.
  research to improve its products to meet the demand of Chinese customers.

Employment of Local Staff for China representative office

The representative office cannot issue invoice and enter into contract with business parties in China. The representative office cannot hire local Chinese staff directly; it must hire through Foreign Enterprise Services Company (FESCO) a government employment agent. There is no direct employment contract between local Chinese staff member and the representative office. The local Chinese staff members enter into the employment contract with FESCO to provide service to representative office.

Funds arrangement for China representative office

Engaging outside of permitted activities for representative office is considered asconducting business without a license in China. Funds must be remittedby its foreign company to operate its representative office. Other source of fund will beconsidered doing business without a license in China.

Tax liability of China representative office

The representative office is subjected to tax on declared expenses at a rate of 15%, and must file monthly and quarterly business tax and corporate income tax returns to Chinese tax authorities. The declared expenses include salary, rental, operational and any other expenses in relation to the representative office.
 
Note: RO can not make any profit from China but still requiredpaying tax on the operational expenses of RO in China to the Chinesegovernment.

If you have any further question, please don't hesitate to contact us. 
 
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