Foreign Representative Office
A foreign representative office is also known as a resident representative office of foreign enterprise in the PRC. The examination and approval procedure for a representative office is simple, without requiring registered capital. But a representative office cannot carry out operating activities directly; in fact, it can only carry out business liaisons, product introduction, market research and technical exchange on behalf of an offshore company within the scope of their operations. A representative office does not qualify as a legal entity, so its civil liability shall be undertaken by the offshore company it represents.
Registered Capital
No specified requirement
Required Name of Representative Office
Country/Region Name + Foreign Company Name + (in proposed district) Representative Office
For example, Hong Kong Conpak Management Consultants Ltd. (Shenzhen) Representative Office
Scope of Operation
A representative office can only carry out business liaisons, product promotion, market research and technical exchange on behalf of an offshore parent company within the scope of operations of its headquarters and cannot carry out operating activities directly in its own capacity.
Required Documents
- Notary proof of business subsisted for two years or above of the offshore parent company
- Notary proof of creditworthiness issued by bankers of the offshore parent company
- Notary proof of memorandum or organisation agreement of the offshore parent company
- Notary proof of authorised signatory of the offshore parent company and notary copy of his/her passport
- Notary proof of appointment letters of the chief representative of the offshore parent company
- Curricula vitae of the chief representative
- Notary copy of the passport of the chief representative (A copy of Z-visa of the chief representative is required for certain regions of the PRC)
- Four 2-inch colour photographs of the chief representative
- Lease agreement or certificate of title in relation to the premises
Duration
About 15 working days
Operating Period
The term of residence of the foreign representative office is three years and shall not exceed the subsisting period of the foreign company. The representative office can apply for extension before expiry of term. In doing so, the representative office shall submit the related application report to the relevant authority 60 days before expiry.
Taxes and Fees involved in the Operation of Foreign Representative Office
| Schedule of Taxes and Fees Incurred by Representative Offices in Various Places | |||
| Profits = Total Expenditure ÷ (1 – Appraised and Specified Rate of Profit -Business Tax Rate) Corporate Income Tax Payable = Profits × Appraised and Specified Rate of Profit × Corporate Income Tax Rate (The appraised and specified rate of profit and the business tax rate of representative office shall be equal to or greater than 15% and 5% respectively.) |
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| Items of Taxes/Fees | Shenzhen | Shanghai | Beijing |
| Business Tax | Quarterly Business
Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 5% |
Quarterly Business
Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 5% |
Quarterly Business
Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 5% |
| Corporate Income Tax | Quarterly Corporate
Income Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 15% x 25% |
Quarterly Corporate
Income Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 15% x 25% |
Quarterly Corporate
Income Tax Payable = Quarterly Expenditure ÷ (1-15%-5%) x 15% x 25% |
| Labor Management Fee | Labor Management
Fee of RMB300 payable to every employee per |
Labor Management
Fee of RMB200 payable to every |
Labor Management
Fee of RMB300 payable to every |
| Staff Social Security Fee | Calculated at 25.5%-
37.5% of the salary of employees |
Calculated at 37% of
the salary of employees |
Calculated at 32%-
32.8% of the salary of employees |
| Staff Provident Fund
for Housing |
Calculated at 5%-
20% of the average monthly salary of employees for the previous year 5% – 20% of his/her salary |
Calculated at 7% of
the average monthly salary of employees for the previous year month in proportion to 7% of his/her salary |
Calculated at 12% of
the average monthly salary of employees for the previous year |
