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    Company Formation

    China RO

    Representative Office
     

Introduction

A representative office is an office established by a company to perform marketing, quality control and other non-transactional operations in China which is generally easier to establish than a branch or subsidiary, as they are not used for actual "business" (e.g. sales) and therefore there is less incentive for them to be regulated.

Pros and Cons

Pros

  •  No share capital is required;
  •  Setup in less procedure;
  •  Can exchange foreign currency into RMB;
  •  Can hire local staff via government admitted agents;
  •  Simple company and financial structure.

Cons

  •  Not business entity;
  •  Tax rate is high;
  •  No invoicing;
  •  Must be investment in company;
  •  Mother company needs to be at least 2 years old.
RO Do & Don't
DO DO NOT
  1. Activities related to research and survey in the China market;
  2. Liaise with business contacts in China;
  3. Being a coordinator for the parent company's representatives and clients;
  4. Make agreements such as travelling for parent company's representatives and clients;
  5. Allow to hire local employees via HR agency in China.
  1. Conduct business operation in China;
  2. Sign contracts on behalf of parent company;
  3. Receive payments from clients or invoicing in China for any services and products;
  4. Purchase of any properties, equipments and etc. for business operation;
  5. Hire local labors directly.

 

 

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Hong Kong Most Valuable Companies Award 2014

Hong Kong's most proactive local and foreign companies setp upstage to be honoured with the Hong Kong's Most Valuable Companies Trophy of Excellence. Thanks again for the nomination from Mediazone Group 2014.