China Company

Foreign Representative Office In China

 

Foreign Representative Office In China

 

The representative office of China is called the representative office of foreign enterprises, also known as the permanent representative office of foreign enterprises in China.

The representative office of China is established as a permanent representative office of a foreign company. It can only engage in indirect business activities in China and conduct business activities such as liaison, product promotion, market research, and technical exchanges on behalf of foreign companies in the business scope of foreign companies.

Inter Area has established business experience in Shanghai and Shenzhen for many years. It can pay attention to customers/services not only basic foreign representative offices (or offices), companies, branches, but complete company set up consultation, application document production, local industrial and commercial registration to follow-up accounting service agency.

Inter Area provides a one-stop service for customers who want to set up a company in Shanghai, set up a company in Shenzhen, or set up a company in Xiamen, so that investors can truly target their local businesses and be able to take care of their customers in the local area. Business and industry affairs allow investors to focus on business market development.

中國外資代表處

I.China representative office set up specifications

When setting up an office in China, there are requirements for foreign companies to meet the following requirements:

  • 1. Registered in the country/region where the office is established in China for more than two years;
  • 2.There have been no bad records against China’s laws;
  • 3.Records or certificates of good business activities in the country/region where the office is established in the mainland;
  • 4. The company registration certificate requires local authorities to carry out notarization, Chinese Embassy certification, and credit certificate certification.(Hong Kong, Macao and Taiwan companies that set up offices in China have no age requirements, and only need to do notarization of documents. In addition, Hong Kong companies have to be notarized by lawyers)

II.Office naming rules

Country+Head Office Name (Chinese) + [Region Name] Representative Office (Office)
(The name of the head office must be the nature of the company, and the company name is the best; the chamber of commerce can also be registered but must be approved by the higher authorities.)
【Example】:

  • Beijing XXXX Consulting Co., Ltd. Shenzhen Representative Office.
  • XXXX (Shanghai) Trading Co., Ltd. Xiamen Representative Office.

III.Notes for China Representative Office

The representative office in China is also known as the office. It is not possible to engage in direct business activities when setting up an office in China, that is, it cannot sign commercial contracts, issue orders, issue invoices, collect money, hold inventory, etc.; The head office (ie, a foreign company) engages in non-commercial business activities such as information collection, liaison, and marketing in the Chinese market.

  • 1.The address of the representative office in China must be the real address. The information required for the office space includes the purchase contract, the developer’s pre-sale license, and the purchase invoice.
  • 2.There are two types of taxes to be paid: income tax and business tax (deducted based on the company’s expenses). According to the “Notice of the State Administration of Taxation on Strengthening the Taxation Management of Permanent Representative Offices of Foreign Enterprises,” the taxation of foreign representative offices is determined by calculating the income based on the expenditure, using the following formula:

    • Taxable income = Expenditure / (1-15%) * 10% (tax rate)
    • Corporate income tax payable = Expenditure / (1-15%) * 10% profit * tax rate
    • Business tax = Expenditure / (1-15%) * tax rate.

  • 3.The number of representatives of representative offices in China should be appropriate to the business activities carried out by them, and the number of representatives of representative offices (including chief representatives) should generally not exceed four. For representative organizations that currently have more than 4 representatives, in principle, only delegates are allowed to be canceled, and new representatives are no longer allowed.

IV.Foreign Representative Office In China

Q1.What is the function of setting up a representative office in China?

Q2.Are there any restrictions on setting up a representative office in China?

Q3.Can a representative office established in China engage in profit-making activities?

Q4.What taxes do I need to pay when setting up a representative office in China?

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