Hainan representative office registration is a good way for investors to invest in this tropical island and enter into mainland China market. Representative office (RO) is legal Chinese business entity representing an overseas company. The RO supports the business objectives of your foreign company in China. Running cost of RO is relatively low; the tax is treated as a business expense. If you keep a small staff to handle business in China, your operational cost will be negligible. In case your business expands, you may transform your RO into a WFOE (wholly foreign owned enterprise).
Functions of Representative Office
A representative office in China may only engage in non-profit making activities, it can carry out the following functions:
1. Conduct research and survey for its parent enterprise in the local market;
2. Liaise with local and foreign contacts in China on behalf of the parent enterprise;
3. Conduct research and provide data and promotional materials to potential clients or trading partners;
4. Act as a coordinator for the parent enterprise's activities in China;
5. Make travel arrangements for parent enterprise representatives and potential Chinese clients;
Under no circumstances may a representative office do the following in China:
1. Directly engaged in any business for profit;
2. Sign contracts or deals on behalf of the parent enterprise;
3. Represent any firm other than its parent enterprise;
4. Collect money or issue invoice within China for services or products;
5. Buy property or import production equipment.
Features of Representative Office
1. Legal Status of a Representative Office
The Representative Office is a non-legal entity operating representing it's parent company overseas. 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 but may act as a liaison and promotion office for its parent company.
2. Company Name
The name of the Representative office should be in the form of "Name of the Enterprise + Name of the City + Representative Office".
3. Business Address
At the beginning of setting up the Representative Office, it is advised to decide the place and building where office is going to be located first, as the address of the proposed office will have to be mentioned in the application for approval. Note that the business address must be located in commercial buildings approved by the government.
4. Social Security in China
A new rule on foreign employees’ social security in effect starting October 15, 2011. It is said that if a company hires a foreign employee, the company shall register this employee with the local social security authority within 30 days of the employee receiving their work permit.
How to Set up a Representative Office in China?
Setting up a representative office is fairly simple, compared to the registration process of WFOE and joint venture. It doesn’t require huge amount of capital and can be established with little to no investment. Just prove the legality and financial health of your parent company and your business is China-ready.
You can set up an RO in less than 2 weeks; however, in some cases, verification and crosschecking business activities takes time.
Representative office is ideal for foreign companies, who already are in business with a Chinese company and need a supervisory agent to monitor business operations in China. Tannet can help you venture into the Chinese market. Along with providing assistance in the registration and incorporation process, we also offer premium accounting and company management services to all our clients.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated at:
(1) 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China;
(2) Unit702-703, 7/F, Fourseas Bldg, 208-212, Nathan Rd, Jordan, Hong Kong;
(3) Unit 610, 6/F, Huaxia Bank Tower, No. 61 Guoxing Avenue, Meilan Dist., Haikou, Hainan, China.
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