RO Registration
Written by jayshaw   

RO Introduction

Establishing Steps

Checklist for Clients

 

RO Introduction

A Chinese representative office (RO) is a business association which is setup in China, to represent its overseas parent company aimed for China market research activities, or for liaison activities with Chinese businesses and customers. Establishment of an RO is subject to approval by the relevant authorities under Chinese law.

A RO is not considered to be a fully independent legal entity. It can not directly engage in business operation, issue invoices on its own, remit outward, sign sales or purchase contracts, or receive income from services performed.. However, the parent company through its RO can enter into contracts with its supplier/customers in China in its own name, but not under the name of RO. A representative office is popular for those who are willing to enter China at the test period of business and investment.

Compared to registering a WFOE, registering an RO is relatively faster and easier because there are fewer approval authorities involved and there are fewer documents required. Unlike a WFOE, there is no compulsory requirement of minimum registered capital for a RO. Meanwhile, the management and maintenance of A RO is simpler and easier than any other forms of foreign invested company. Notably, since A Ro is not an independent legal entity, there is no complicated and troublesome procedures of dissolution and liquidation.

As for the general tax regulation of a RO in China, although it is not to conduct business, there are mainly two kinds of taxes are applied as below:

Business Tax (BT) , which is based on monthly business operational expense, its rough rate is 5% based on your expenses. It is calculated according to the formula like this: BT= expenses/ (1-15%) ×5%.

Enterprise Income Tax (EIT), which is based on quarterly business operational expenses, its rate is 25%. It is calculated according to the formula: EIT = expenses/ (1-15%) ×10%×25%.

Representative Offices are also subject to doing routine monthly report to the Tax Administration Department.

Establishing Steps

  • Step 1: Pre-approval from local government authorities concerned if business scope entails such pre-approval

  • Step 2: Apply for Business License with local State Administration for Industry and Commerce (SAIC)

  • Step 3: Chops made by Public Security Bureau (PSB)

  • Step 4: Organization Code License by local Bureau of Quality and Technical Supervision (BQTS)

  • Step 5: Tax Certificate by Taxation Bureau

  • Step 6: Registration and Approval with State Administration of Foreign Exchange (SAFE)

  • Step 7: Open Foreign Currency and RMB bank account

  • Step 8: Statistics license Registration with local National Bureau of Statistics

 

Checklist for Clients

1. 2x parent company’s ID certified by Chinese Embassy, including:

  • Business license indicating more than two years existence

  • Articles of Association

  • Authorization on signing representative for the parent company

  • POA for Chief representative and other representative

  • ID photocopies of Chief Representative and other representatives

 

2. For Chinese representatives, ID certification is not needed; an assigning letter from local foreign affairs service institutions is enough

3. 2x Bank Reference Letter in original from the parent company’s bank to declare a good standing certified by Chinese Embassy.

4. Chief Representative's CV and 8 photos

5. A brief introduction of the parent company and the china Representative Office

6. Registered office address

For company landlord, 2x photocopy of lease, ownership certificate and business license

For individual landlord, 2x photocopy of lease, ownership certificate and landlord ID

7. Additional documents when business scope entails approval of government authorities concerned

 


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