What is a representative office China?

What is a representative office China?

A representative office (often shorted to rep office or RO) is the simplest and fastest option for overseas businesses to set up an operation in China. In simplest terms, it allows a foreign company to engage in market research or business operations in China, but not to make a profit.

How do I set up a rep office in China?

Rep Office registration in China – the setup process

1. Obtain approval for company name.
2. Sign rental lease for office space.
3. Make application to AIC for registration.
4. Carve company chops.
5. Enterprise Code.
6. Register for tax payment with the local tax bureau.
7. Obtain visas for foreign employees.
8. Open Chinese bank account.

What is the difference between a branch and a representative office?

In most countries, a representative office cannot handle transactions or contractual matters. A branch office, on the other hand, is a direct extension of the parent company and can engage in core activities like sales and contracts. Critically, however, it is not a separate legal entity from the parent company.

What is a foreign representative office?

A representative office is an office established by a company or a legal entity to conduct marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted. A representative office is known in France as a bureau de liaison.

Is a China representative office a legal entity?

To be clear from step one, a Representative Office doesn’t constitute an independent legal entity in China, meaning that its registration merely grants the foreign business a presence in the local market.

What is a representative for a company?

Related Definitions Company Representative means the person or persons appointed and approved in writing from time to time by the Company to act on its behalf for overall co- ordination.

How do I open office in China?

Contents

1. Background – Foreign Investment in China.
2. Step One: Pick a Business Location.
3. Step Two: Consider a Global Expansion Partner.
4. Step Three: Use a Recruitment Agency to Hire Chinese Staff.
5. Step Four: Choose a Legal Structure.
6. Step Five: Create Your Business Plan.
7. Step Six: Open a Bank Account.

Is a representative office a PE?

In most countries, in order to recognize a PE — or a taxable presence — the revenue-generating entity needs to be formally registered under some corporate identity, typically a branch, representative office or subsidiary. While such tests vary by country, the following are generally speaking indicators of a PE.

Is a representative office a separate legal entity?

A Representative Office (RO) is essentially a temporary administrative office set up as a liaison to coordinate and manage non-commercial activities, for a foreign company. An RO has no legal status and is not a separate legal entity from its parent company.

What does representative office do?

A Representative Office is an office of a foreign company approved to collect relevant information on investment opportunities in the country especially in the manufacturing and services sector, enhance bilateral trade relations, promote the export of Malaysian goods and services and carry out research and development …

How do I open a US representative office?

Setting up a new U.S. Branch of your Foreign Company and applying for the L-1A Visa

1. Step 1: Prepare a Business Plan.
2. Step 2: Set up the US Company.
3. Step 3: Set up a U.S. Business Checking Account:
4. Step 4: Obtain a B-1 Business Visa to set up the Physical Office Space.
5. Step 5: Apply for the L-1A Visa with USCIS.

Who can be a company representative?

Company Representative means any director, officer, employee, agent, advisor (including legal, accounting and financial advisors) or other representative of any of the Target Companies.

Can a head office in China be taxed?

At the same time, the jurisdiction of the head office could also impose taxation if the RO is no PE for treaty purposes. Therefore, it may be considered to avoid setting up a RO in China if the aim is to utilize the DTA benefits and, instead, to actually establish an entity in China in order to prevent double taxation issues.

Is the representative office in China a DTA?

China has signed many Double Taxation Agreements (“DTAs”) over the course of the past decades. However, the Chinese treatment of a so-called Representative Office (“RO”) seems to be in breach with the DTAs that China has concluded, even if that specific DTA is in line with the OECD model tax convention.

What does it mean to have representative office in China?

A Representative Office (often shorted to Rep Office or RO) is the simplest and fastest option for overseas businesses to set up an operation in China. To put Rep Office definition in the simplest terms, it allows a foreign company to engage in market research or business operations in China, but not to make a profit.

What are the new tax rules for ROS in China?

China tax authorities have widely adopted deemed profit methods as a tax calculation basis for existing ROs. With the issuance of Circular 18, the existing ROs will be facing a heavier tax burden with the deemed profit rate being raised from 10% to a minimum of 15%.