RO Company Registration in China - Business Starting & Setup

To register a representative office in China it is necessary to meet the following requirements:

• a foreign company, establishing RO on the territory of PRC, should be incorporated at least 2 years beforehand Representative Office establishment;
• RO should have a local registered office, therefore during registration it is compulsory to sign a lease contract.

Registration procedure include following stages:

1. Preliminary approval in the competent authority depending on a form of activity (only for RO, whose head office is occupied in fields of special regulation of PRC - motor transport and shipping companies, audit and law firms, inspection companies, financial organizations, insurance companies, certification companies, tourist firms, intellectual property rights protections organizations, mass media, airline companies, television and radio companies, fund broker companies, non-profit organizations, as well as profit organizations of countries which did not establish diplomatic relations with PRC);

2. Registration in Administration for industry and commerce.

Required documents:

• Application form;
• Office lease certificate issued by the owner of property;
• Copy of incorporation of the company, confirming that the company was established at least 2 years ago;
• Articles of association of the company;
• Original document confirming the power of a chief representative (including signing powers) and representatives;
• Resume of a chief representative and other representatives, copies of their passports and photos;
• Original business solvency certificate from a bank which has business activity with a company;
• Copy of a property right certificate or documents confirming office acquisition, copy of business activity right if the owner of the office is legal entity;
• Power of attorney;
• Registration form of a secretary of a contact person.

All the documents, except from 1, 2 and the last one, should be notarized and certified at the Chinese Embassy or Consulate in the host country. The documents in the foreign language shall be translated into Chinese. Registration authorities shall make a decision to register RO or not within 15 days after receiving all required documents. In case of positive decision Representative Office obtains a Registration Certificate and work cards for representatives confirming their status in PRC and needed to apply for work permit and residence permit. Registration certificate should be placed in a prominent place in the office.

3. Post registration procedures (2-3 months):

• Registrations of RO in various state authorities – police, quality control administration, tax administration, statistics administration, labor and social protection authorities;
• Seal production and opening of a bank account for RO.

The most part of these procedures are undergone consecutively.

Chinese law restricts freedom of business activity of RO of foreign companies. Not being a legal entity, Representative Office can only carry on business indicated in the Registration certificate. RO is not allowed to do trade and carry on any business activities. Representative Office can only build contacts, do market studies, hold promotion actions for the benefit of the head office. It cannot receive profit on its bank account for goods or services sales, but in the meantime it can represent the interests of its company in closing deals and pay taxes for such deals. To transfer profit abroad, a bill should be drawn up in foreign currency and money should be transferred to foreign company’s account (the simplest way); or RO has to get a permission from Currency control administration for RMB exchange and its transfer abroad.

Name of RO should consist of the following parts: nationality, name of a foreign company in Chinese, name of resident city and a word “Representative Office” in Chinese.

The name should not contain:

• Words causing damage to state security of China or social interests.
• Names of international organizations.
• Words forbidden by law, administrative acts or regulations by State Council of PRC.

RO should have a local registered office to go through registration procedure. Chinese law requires from companies and their branches to carry on business at their registered address. There fore, Representative Office cannot be registered in one place and be located in another place. Registered office of RO should meet the following requirements:

• it is required to provide a consent letter from the owner, as well as documents confirming office property rights (property certificate or purchase contract);
• it should not be an office in property of a foreign company or foreign individual;
• it should an office as marked in the respective documents;
• office lease agreement must be signed for at least 12months.

After obtaining a Registration certificate the seal should be produced. For this, you have to submit to to the police the following documents:

• original and copy of Registration Certificate;
• if application is submitted by chief representative: seal production application, original and a copy of passport of chief representative;
• if application is submitted by an authorized person: original and a copy of passport of chief representative, original and a copy of passport of an authorized person, power of attorney signed by chief representative.

Registration certificate is given out for not more than 3 years, then it should be prolonged on the condition that RO’s activities comply with Chinese law. The term for which Registration certificate is issued depends on the term of lease agreement (if lease agreement is signed for a year, registration certificate is issued for a year).

RO should have a chief representative. In accordance with an appointment document which gives signing powers chief representative can sign registration documents in the name of head office.

Depending on needs, foreign company can send 1-3 representatives, e.g. total number of employees at Representative Officemust not exceed 4 people.

In the following cases an individual can not be appointed chief representative or representative:

• sentenced for damage done to security of China or social interests;
• an individual whose registration certificate was annulled or withdrawn or whose RO was closed according to law due to damage to security of China or social interests less than 5 years ago;
• other cases approved by State administration for industry and commerce.

Registration authorities should keep a record on registration of RO of foreign companies in Registration Roster of Representative Office open to reading and copying.

In case of establishment or changing of RO foreign company should publish respective information in approved mass media by registration authorities.

If Representative Office is suspected in violation of registration law, registration authorities have a right to investigate the company and its employees, read, copy and withdraw illegal contracts, receipts and booking accounts, etc.