Registering the Representative Office in China

Description

The Representative Office is a legal entity under Chinese corporate law.

Companies with a representative office will be able to legally transfer key personnel from the home country, open bank accounts, and establish an independent profit center.

The representative office will report income and pay taxes in China. According to the State Administration for Industry and Commerce (SAIC), Foreign representatives must register a representative office within six months of establishing a business presence in China. Those who have not obtained approval or have not gone through the procedures for registration shall not be permitted to undertake business operations in the capacity of the home office.

There are many intangible benefits related to the establishment of a representative office. Often the office serves no other purpose but to present an image to the prospective Chinese customers and potential partners. The location and furnishings of a representative office are very important in China because the Chinese are often unable to visit the home office of the foreign company and are only able to judge the viability of a company by their operations in China. Foreign representative offices typically occupy the most expensive real estate in China, currently making class 'A' office space in high demand.

In many cases, companies first establish a liaison office – which does not report to Chinese authorities - and naturally progress into a representative office when The address of the proposed representation office will be part of the application process, thus companies usually choose an office location before applying. China Liaison Service will provide an office address and sponsor organization free of charge for companies wishing to immediately get started.business takes hold.