Want to open a representative office in China? We know how!
If you are looking for a quick, profitable and convenient way to expand your business and enter the PRC market, then registering a representative office in China with the help of UGL Corporation is what you need.
At the same time, we want to focus your attention on the fact that, according to the Decree of the State Council of the People’s Republic of China No. 584, representative offices of any foreign organizations are not entitled to carry out any activity that is related to generating income. With the help of a representative office, you can advertise and promote products of a foreign company, establish contacts and business contacts, explore and open new markets, participate in exhibitions, etc., but this is done only in the interests of the parent company.
What requirements do we impose on foreign firms / organizations in order to be able to open our representative office in China?
- Have a good reputation in your field and be present on the market for at least 2 years.
- The company must be registered in its country, in accordance with applicable law.
- In addition, we help legal entities collect a package of all necessary documents in accordance with the Decree of the State Council of the PRC No. 584 (a list of documents is presented below).
- For certain areas of activity, our specialists help firms / organizations obtain permission to create a representative office (preliminary approval).
What areas of activity are subject to prior approval?
- Companies providing services in shipping and road transport.
- Air carriers.
- Various organizations related to insurance and financial activities. Companies operating in the legal field.
- Tour operators and companies operating in the tourism business.
- Copyright and intellectual property firms. Organizations providing brokerage services.
- Various private and state organizations working with television, radio and the media.
- Other non-profit organizations
Please attention that from the date of receipt of the approval, we, as representatives of a foreign firm, submit an application for registration within 90 days to a special authority – the Commercial and Industrial Administration (hereinafter referred to as the MEA), which regulates the registration procedures of foreign representative offices.
The registration certificate of the Representative Office is issued for a period not exceeding 5 years. Six months before the end of the certificate, we again apply for its renewal or cancellation.
List of documents to be submitted at registration of the Representative Office
According to the Decree of the State Council of the PRC No. 584, foreign companies wishing to open a representative office in mainland China are required to provide the following package of documents, some of which are subject to consular legalization at the Chinese Embassy at the place of registration of the parent company:
- Confirmation that the company is officially registered in their country for more than 2 (two) years;
- Confirmation of the legal address and location of the company at the place of registration;
- Application for registration of a representative office;
- An order to appoint a general representative and ordinary representatives, as well as their personal and contact details;
- Document confirming the authority of the signatory of the parent foreign company;
- An identity card, as well as a biography (autobiography) of the general representative or all representatives (the number of foreign workers should not exceed 4 people);
- A statement of the creditworthiness of the company, which is issued by a financial institution in business relations with a foreign company;
- Charter of a foreign company.
After preparation of the package of documents mentioned above, our specialists transfer them to the molding machine inspector. If the documents fully meet the requirements, the inspector accepts the original documents and issues a “notice of receipt”, which means issuance of the Registration Certificate and Representative Books in 5 (five) working days. If any documents are missing or missing in the forms or forms, the inspector will provide comments and return the entire package. A second meeting with the inspector will be held after all the comments have been corrected.
Thus, the date of issue of the Certificate and will be considered as the official date of establishment of your representation! Now it is necessary to make seals and pass post-registration procedures in tax and statistical department, it takes 5-7 working days.
The next step is opening an official account in one of the banks of China. This procedure takes 20-22 working days.
In total, we will need another month to prepare additional documents, so take it into account when creating business plans or reporting.
Can a firm/organization representative office in China employ foreign employees?
Let’s say that your company is located in Russia and you want to employ your employees in a branch in China. In addition, you want to hire some Chinese specialists. In this case, you need to understand that the recruitment procedure will be fundamentally different. Hiring a specialist from Russia or another foreign country will be done directly from the parent company by means of the Order of Appointment, but the services of a Chinese citizen can be provided only on the terms of outsourcing, i.e. the employment contract with the Chinese employee has the right to sign only one of the special service agencies (state structure).
That’s why you sign a classic employment contract with foreign employees and an employment services contract with a Chinese citizen with an outsourced organization. All social payments as well as wages and salaries are transferred in full to the account of the outsourcing organization, which then pays them to your Chinese employee.
If you still have questions about registration of a representative office in China and employment of employees, or you want to get professional legal support, contact the specialists of UGL Corporation Limited. You can contact our specialists by leaving an application, writing to our manager online in a chat or by contacting by the phone numbers indicated on the website.