China Representative Office (RO)
China Representative Office (RO) is a non-incorporated entity for enterprises incorporated outside the mainland China to setup a presence there for conducting business-related activities. It is not a separated legal entity in China, all activities of the China RO is held responsible to its parent company.
Please be noted, China RO is prohibited from conducting any profit-making transactions in China, in other word, it can only spend money in China.
China RO is designated as a convenient entity for non-PRC enterprises to perform liaison with their business partners such as factories and end customers in the mainland China.
China RO is less regulated and faster to setup comparing to China limited company, but it cannot handle money-making transactions, no selling and re-selling are allowed.
Other characteristics of China RO:
- It is not a separated legal entity form its foreign parent company.
- Its foreign parent company must be at least 2 years old.
- Trades and invoicing in China are strictly prohibited.
- Expense-only function is allowed.
Generally, activities which do not involve money-gaining transactions are allowed. The purposes of foreign companies to establish RO in China are as follows:
- Activities related to market research and survey in China
- Liaison with business contacts in China
- As a coordinator on behalf of its parent company with clients in China
- To prepare agreements for parent company and clients in China
- Employing local employees via China government recognized HR agency in China
Example of profit-gaining activities which RO cannot do:
- conduct transactional business operation in China
- sign contracts on behalf of parent companies
- receive payments from clients in China
- invoice in China for any performance
- purchase of any properties such as real estate and equipment for business operation
- hire local labors directly
- Minimum number of representative manager: 1
- Personal identification document must be certified by China embassy or consulate overseas
- One office address in commercial building in China
- Incorporation document or equivalent document certified by China embassy or consulate overseas
- Notarized parent company’s bank reference letter
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