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Shenzhen RO Formation Guide

Updated:2018-1-3 15:33:28    Source:www.tannet-group.comViews:272

If you want to invest in China, you don't just turn to the relevant government departments for certificates and formalities, you turn to TANNET as well. At TANNET, you will be provided with tailor-made service that not only suits your need but also meets your satisfaction.

TANNET’s services are business-orientated and value-orientated. TANNET—serving the world of BPO, ITO and KPO businesses sincerely and professionally.

Shenzhen is the best place to do businesses in China. Situated in the Southern China, Shenzhen is the first Special Economic Zone in mainland since China has carried out reform and open-door policy 34 years ago. Shenzhen has an area of 953 square km’s and a population of more than 10 million.

Shenzhen is a better city both for living and working over other major cities in China as it is recognized as the youngest and fastest growing city nationwide and worldwide. In Shenzhen, you can enjoy sound infrastructure and intensive industrial chain for manufacturing, trading and value investment. Since Shenzhen is bordering Hong Kong, it is also an ideal place for you to benefit from the “one country, two systems” policy.

A Chinese representative office (RO) is an institute, representing its parent company for liaison purpose with Chinese counterparts. A RO is not considered to be a separate legal entity. It can not directly engage in business operation and transaction. However, through which its parent company can enter into contracts with its supplier/customers in China with its own name, but not under the name of RO. A representative office is popular for those who are willing to enter China at the test period of business and investment.

The Chinese government has a legal name format for anyone who wants to setup a RO in China, the format is: country (area) + parent company name + Shenzhen Representative Office.

1. The RO enjoys a great popularity among foreign investors because of its easier setup & management. Unlike Joint Venture(JV) and Wholly Foreign Owned Enterprises (WFOE), representative offices are not required to meet stringent requirements for items such as corporate structure and capital injection;
2. A RO can handle market research, sourcing, project investigation, quality control for parent company, liaison with customers and suppliers;
3. A RO can open bank accounts;
4. A RO can employ staff for above- mentioned purposes through a third party;
5. Apply for work permit and residence permit;
6. A RO is still subject to tax liability, so monthly tax return should be carried out regularly.

1. Copy of the business license or certificate of incorporation of parent company; documents indicate the directors and shareholders; copy of M & A;
2. The original and copy of identification documents (ID card, passport) of chief representative, and five color photos and resumes;
3. Appointment letter to the representatives and authorization letter to the relevant person from the parent company to sign in the application documents;
4. Original bank reference letter (from investor's bank) indicating foreign investors' creditability issued by the bank within 6 months;
5. Both the residence address and commercial office address can be available for the Ro formation, but the lease of commercial office between lessor and lessee needed to be endorsed by the Housing Management Authority is necessary if the representatives need to apply for the working visa.

Note: The documents above-mentioned from 1 to 4, should be legalized by the local lawyers or notarized by the relevant government departments, and finally endorsed by the local China Embassy or Consulate.

Prepare all the needed documents→ fill out the application form→ or sign the agreement with TANNET → pay for the services

1. TANNET’s Process: submit all the needed documents→ apply for the business license and working card→ go to the public security bureau for stamp-make→ open the bank account. 
2. Service Items include: a. Business license (the Business license, Registration card of Stamp Carving, Tax registration card and Organization Code Certificate are combined into the Business License); b. Three stamps; c. Working card; 

TANNET can provide a series of business follow-up services such as monthly bookkeeping and tax return, license annual return, internal auditing, financial planning and tax layout, China policy & market study, investment portfolio and Pre-IPO services. Other services include domain name registration, webpage design, website promotion, China trademark registration, work permit, residence permit, internet promotion, etc. in order to pave a smoother and wider way for your China business success. 

Once all the necessary documents for application are ready for submission, government approval can be got within 10-15 working days.

Although a RO is not to conduct business, it is responsible for tax as stated below:
1. Individual Income Tax (IIT): IIT rates from 4% to 45% based on salary income exceeding more than RMB3500 for local employee and RMB 4800 for overseas employee. All the RO staff is subject to IIT if his income exceeds the limit. IIT is calculated according to such a formula: IIT= (income- limit)* rate.

2. Business Tax (BT): BT is based on monthly business operational expense, the rough rate is 5% based on your expenses. It is calculated according to the formula like this: BT= expenses/ (1-20%) ×5%.

3. Enterprise Income Tax (EIT): EIT is based on quarterly business operational expenses, the rate is 25%. It is calculated according to the formula: EIT = expenses/ (1-20%) ×15%×25%.

1. TANNET has established a global service system with 38 branches and 3000 cooperators worldwide, as well as in excess of 20,000 reliant clients globally. You can find one TANNET always beside you.
2. TANNET is staffed with a strong professional team of lawyers, accountants, engineers, designers and consultants providing tailor-made and all-in-one service.
3. There is a B2B business platform available for the international buyers and sellers of SMEs,
4. TANNET maintains good partnership with international banks and financial institutes. TANNET also provide PIPO service.
5. TANNET is in conformity with the standard of ISO9001/2008 which means our service quality is guaranteed.

1. Because of language difference, all the documents submitted to the Chinese government should be translated into Chinese and endorsed by TANNET, the appointed translation agency.
2. TANNET is responsible to inform the clients for the collection of the company kit at the designated office. If the client fails to collect the company kit within the mandatory three month period without reasonable excuse, the client will be regarded as giving up the right to the registered company; TANNET can dispose of the company as it wishes.
3. Make sure to get the formal invoice from the lessor after leasing is done.
4. The follow-up services are not included in the service package, and are subject to further expenses according to the clients’ requirements.

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Shenzhen Add: 16/F, Taiyangdao Bldg, 2020 Dongmen Rd South, Luohu, Shenzhen, China
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