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.)
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

 

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