Same as WFOE, a representative office is established and completely controlled by foreign investors without Chinese partner participation. However, the company nature of a representative office and its key idea is confined to liaison purposes. Direct trading, manufacturingand receiving organization money aren't allowed. Investors could utilize a representative office for such activities as selling merchandise and services, sourcing of suppliers, quality command, marketplace search, logistics command, technology exchange, etc.
Setting up a representative office in China is the best and quickest solution of establishing a presence in China.
A representative office is required to pay business tax and foreign enterprise income tax at a rate of 15% over the total expenses including rent, staff income, power, management fees,etc. Once a representative office is officially documented, it has to keep the right account records in accordance with account standards in China and report taxes on both a monthly and quarterly basis.
In general, we indicate our consumers install a Hong Kong business for invoicing to their non-China consumers and place orders to China suppliers. A representatve office could supply supportive role and liaison with suppliers in China.
Since January 2010, it's a requirement the applicant business of consultant office need been installed for a minimum of 2 years. Also, the business registration certificate and bank reference letter of the applicant business need notarised by the China Attested Officers and legalised by the China Certification Office in Hong Kong or Chinese embassy within the recognised nations. Time for registration need about 2-4 months, subject towards the provincial government and nature of company.
China