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OFFSHORE COMPANY SETUP

Setting up a representative office (RO) has been a very popular vehicle for many foreign enterprises as their initial step going into the China business markets. In comparing to setting up a company in China, it costs much less and faster in establishing a RO. There is no capital requirement and the total time taken will be in about 60 working days, including the application for the Certificate of the Leasing Registration.　　

However, in the light of the laws and regulations, a RO cannot engage in any direct business activity. A RO, basically, is not allowed to issue invoices and any income derived from the business is not allowed to go through the RO local bank account.

The foreign investors usually have their RO serving the following purposes:

Conducting market research and surveys;

  • Business liaison with local contacts and suppliers;
  • Product presentation;
  • Technology interflow; etc.

    • In most cases, a RO is functioning as a coordinator among its overseas headquarter, their customers and, or the suppliers in China. For instance, the RO can be responsible for all the arrangement, except signing contracts for its own.

     

    In general, there are three prerequisites in setting up a representative office in China:

    1. There must be an overseas holding company with good financial creditability records. Two documents have to be presented in certifying these.
      1. Notarized Certificate of Incorporation (CI) and, or the Business Registration (BR) of the holding company.
      2. A creditability letter issued by the bank of the holding company in certifying the account having descent creditability.
    2. The objectives of setting up a representative office has to be clearly presented with the following documents submitted along:
      1. An application letter issued by the foreign investor and the letter should include the background information of the foreign investing company as well as the objectives of having a representative office in China;
      2. An appointment letter of the Chief Representative issued by the foreign investor.
    3. A business premises is needed for registration and there are a number of documents have to be submitted in completing the representative office registration.
      1. Designated Office Certificate provided by landlord in certifying its eligibility to renting office to foreign companies.
      2. Office Leasing Contracts with the landlord.
      3. Property Ownership Certificate with the company chop of the property owner.
      4. Resident Certificate issued by the management company of the building where the office is located.
      5. The Certificate of Leasing Registration.
    Remarks:
    Please note that setting up a Representative Office in China has to be handled by a licensed agency. For further enquiry, please fee free to contact us for more information.