REPRESENTATIVE OFFICE (RO)IN SHANGHAI

To set up a representative office in the Mainland is a quick and easy way of establishing a presence in the vast market of China. Also it is less costly. A foreign company (parent company) establishes a Representative Office (RO). Essentially a representative office is used to monitor trading, market products and/or services, source suppliers, quality control, market research and general facilitation, etc. Although no trading activities are to be conducted by a representative office, it is liable for business tax and foreign enterprise income tax. The actual business transactions with the customers in the Mainland will have to be conducted by the parent office in Hong Kong.

Features of a Representative Office

- Legal Status of a Representative Office
The Representative Office is a non-legal entity operating representing its parent company. 

- A representative office is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed. 

- It can only carry out business liaisons, product introduction, market research and technical exchange on behalf of an offshore company within the scope of their operations. 

Registered Capital

No specified requirement

Required Name of Representative Office

Country/Region Name + Foreign Company Name + (in proposed district) Representative Office

Scope of Operation

A representative office can only carry out business liaisons, product promotion, market research and technical exchange on behalf of an offshore parent company within the scope of operations of its headquarters and cannot carry out operating activities directly in its own capacity.

Documents required for application

We do the paperwork for our clients and you are responsible for the preparation of the following information and documents:

• A set of incorporation documents of the applicant company, including Certificate of Incorporation and Business Registration Certificate, Annual Return, if any. These documents must be legalised by Chinese Embassy (we can arrange the legalisation of these document for you if needed);

• 2 original banker reference letters issued in the name of the applicant company and addressed to the local Industry and Commerce Administrative Bureau;
• 2 original Tenancy Agreement (lease agreement) of the office premise to be used by the Representative Office. The lease term should not be less than 12 months. The tenancy agreement should be registered with the local House Management Bureau;
• Photocopy of the Certificate of Property Owner evidencing the landlord owning the property;
• A brief summary of the operations and business of the applicant company, such as the principal business activities, registered address, contact phone number, name of the applicant company; the address and contact number of the managing director of the applicant company;
• The resume, 3 passport photos, Chinese ID copy, passport copy, contact number of the Chief Representative and the address where the Chief Representative will be staying while she/he is China;
• If there is(are) Representatives to be stationed in China in addition to the Chief Representative, the resume, 2 passport photos, Chinese ID copy, passport copy, contact number of the Representative and the address where the Representative will be staying while she/he is China.

Registration & Post-registration Procedures

• Pre-registration 
Before commencement of registration procedures, all the documents and information listed above must be ready.
• Registration Procedure
The first step is to apply for registration with the local Administration for Industry and Commerce. 

Once the application is approval and Business Registration Licence issued, we will then perform the post-establishment registration procedures.
- Post establishment Registration Procedures
- Apply for the Representative Office´s Stamp (Office Seal)
- Apply for the Enterprise Code License
- Register in local Statistical Bureau
- Register in Taxes Bureau
- Obtain Health Certificate for the Chief Representative
- Application for the Working Permit for the Chief Representative
- Application for the Residence permit for Chief Representative
- Register in local Custom
- Arrange the bank account certificate and Certificate of Foreign Exchange

Duration

About 15 working days

Operating Period

The term of residence of the foreign representative office is three years and shall not exceed the subsisting period of the foreign company. The representative office can apply for extension before expiry of term. In doing so, the representative office shall submit the related application report to the relevant authority 60 days before expiry.

Taxes and Fees involved in the Operation of Foreign Representative Office

Once the Representative Office is officially registered, it is required to maintain properly accounting records in accordance with accounting standards in China and report taxes in both monthly and quarterly basis.
Profits = Total Expenditure ÷ (1 - Appraised and Specified Rate of Profit -Business Tax Rate) 
Corporate Income Tax Payable = Profits × Appraised and Specified Rate of Profit × Corporate Income Tax Rate (The appraised and specified rate of profit and the business tax rate of representative office shall be equal to or greater than 15% and 5% respectively.) - 


Contact us: 
Shanghai Oden Consulting Firm 
Address: R1603, No.1085 South Pudong Road, Pudong District, Shanghai.
Email: master@odenchina.com
T:021-61997083
Person: Wendy 13661971521
Working time: Monday –Friday (9:00-12:00AM&1:00-6:00PM)
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