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.)
- 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.