The procedure to set up Representative office

Time

To set up a Representative office(RO) need about 20 days (after all documents send to the department). It apply to the commercial department, do not need the approval of the trading department.


The Activities of a RO

According to Chinese laws and regulations, foreign Companies may set up a Representative Office (“RO') in China. However, unless specially approved, the Representative Office of a foreign company is only allowed to conduct indirect commercial activities, such as business liaison/contact, introduction of products, market research, business information gathering, technology information exchange, and other preparatory and auxiliary work, for the foreign company within the company's business scope. A RO is usually not allowed to conduct direct business activities, such as purchase and/or sale of goods in its own name.

The Government Fees for the Establishment of a RO

The government fees include relevant registrations fees, such as the Industry and Commerce Registration Fee (RMB600), the tax registration fee (RMB30), code registration fee (RMB150), the stamp fee (RMB280). The total amount of government fees is around RMB1300.
The license of the RO need to renew every year, the annual renewal fee for a RO is RMB300 (USD37), if you get the license in 1, May, the renew time is next year 30 days before 1, May.

Registered Capital

No registered capital is required for the registration of a RO.

Documents Needed for the Registration of a RO

The basic documents needed are as follows:
(1) The original Business Registration Certificate of the foreign company, issued by the local registration authority of the country/region where the company is located. If the said Certificate is a photocopy, it needs to be notarized in the country/region where the company is located, or to be legalized by a Chinese embassy/consulate in the country/region where the company is located.
(2) The original bank reference letter issued by a bank in the country/region where the company is located. The letter should include the average saving amount, half year or one year before the apply day. The letter should be printed in bank title letter.
(3) The tenancy contract for the use of an office in China by the RO, with a term of at least one (1) year, which needs to be registered with the local house administration office in China, together with a photocopy of the landlord's Ownership Certificate. Only houses for business use are allowed to be rented as an office of a RO, houses for residence use are not allowed to be used as an office
(4) The Appointment Letter (to appoint the Chief Representative of the RO and to authorize the Chief Representative to sign the tenancy contract) issued by the foreign company, signed by the chairman of the board of directors of the company, and stamped by the company if it has a stamp. Print it in the company Titled Letter Paper.
(5) The resume of the Chief Representative, Print it in the company Titled Letter Paper.
(6)The copy of the diploma of the Chief Representative.
（7）8 photo of the Chief Representative.
（8）Application form signed and stamped by the legal representative of the foreign company.
All the above documents shall be in Chinese. If some of them are in foreign language, they need to be translated into Chinese.

Taxation

According to the Chinese tax laws and regulations, whether a RO needs to pay tax or not depends on the nature of the RO and the activities it conducts.
There are mainly two kinds of tax which a RO needs to pay. One is called the Business Tax, the other the Corporate Profit Tax.
RO is exempt from taxation if:
• It conducts activities such as business information gathering, liaison and other preparatory and auxiliary work in China for its headquarters to produce goods or sell the goods produced by the headquarters itself; or,
• It conducts activities such as business information gathering, liaison and other preparatory and auxiliary work in China for its headquarters' trading of the goods owned by the headquarters itself; or,
• It is entrusted by companies in China to be agent for the exports of goods from China.


The Chief Representative of a RO

Either Chinese or foreigner can be appointed by the headquarters to be the Chief Representative of a RO, who will be in charge of the RO.


The office

The office must be in a business building, and the acreage needs more than 40-50 square meters.


Human Resources

Chief Representative of RO in China could be Chinese people or foreigners. But if Chief Representative is a Chinese, he must hold a certification issued by a human resource company which provides service for foreign companies and also regulated by the government. RO could hire Chinese employees or do business by itself. But the human resources management must be controlled by human resources organization which is regulated by the government.
Generally speaking, in Beijing and Shanghai, the wage of an employee who works with English is as follows: The salary of a SEC is no less than 3000RMB per month, an accountant or a legal consultant is no less than 4000RMB per month, a marketing sales is no less than 5000RMB per month, a department manager is no less than 8000RMB per month. Different requirements determine different salaries. RO should bear the employees' social insurance premiums and housing fund if Chinese are hired. This amount is equal to 50% of an employees' salary and partially paid by the employee, but most part of it should be born by the employer.
Chinese government do not have the requirement of paying social insurance premiums for foreign employees nor regulations about the salary of Chief Representative. However, this salary should be correspond with the practical minimum that is required by the government and the Taxation Bureau. This minimum is no less than the incomes of a foreign employee from foreign countries which is equal to 15,000RMB per month, a Chinese employee's incomes per month.