Features of Permanent Representative Offices in China

Characteristics of a Permanent Representative Office

A Permanent Representative office of a foreign enterprise is a non-legal entity operating in China representing its parent company. A representative office is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed but may act as a liaison and promotion office for its parent company.

Permanent Representative Office Registration Procedures

The procedures for registration of a Permanent Registration Office in China could be summarised into two steps:

Step one: registration should be made with the Administration for industry and Commerce.

Step two: Post-establishment regsitrations.
Upon the issuance of the Registration Certificate, the applicant is required to complete post-establishment registration procedures, including:
(1) Opening of bank accounts
(2) Registration with the Inland Revenue
(3) Application of “Enterprise Code”
(4) Preparation of statutory stationery, including company chops
(5) Registration with the State Statistic Bureau
(6) Registration with the Customs Office
(7) Application for Employment Visa (For foreign representative)

Life Span of a Permanent Representative Office

The validity of duration of the residence for the Permanent Representative Office (RO) is 3 years, beginning from the date on which the registration certificate is issued by the relevant Administration for Industry and Commerce.

Approval Authorities

Authorities for approval are distributed among various State Council Departments and are delegated to their local offices. Applicants should apply for approval from different departments (at their local offices) according to their core activities. Some of the major types of industries and their approval authorities are:

Name of a Permanent Representative Office

The name of the Representative office should be in the form of ¨Name of the Enterprise + Name of the City + Representative Office (or Office)〃.

Business Address (Registered Office)

Before submitting the documents for application for registration to the Beijing Aministgration for Industry and Commerce, it is required that the office premise to be used by the Permanent Representative Office be leased and a tenancy agreement concluded. The tenancy agreement could be executed by the Chief Representative of the Permanent Representative Office or the director of the foreign company applying to set up the Permanent Representative Office.

Note the business address must be located in commercial buildings approved by the government.

Chief Representative

Chief Representative is the legal representative of the Permanent Representative Office in China, appointed by the board of directors of its parent company. Local representative is not required. Normally, if the chief representative does not intend to stay and work in Shanghai for over 90 days (within a year), no employment visa is needed. In case that the chief representative is a foreigner and intends to stay in China for over 90 days in a year, employment visa is needed. More...

Documents Required for Application

The applicant shall complete and submit "Form for Establishing Representative Office by Foreign Enterprises〃 and ¨Form for Staff of Representative Office〃 together with the following documents:
(1) An application duly signed by the chairman of the board or general manager of the foreign enterprise with the following details: name of the representative office, name of the chief representative, scope of business, duration and address, etc;
(2) Statutory documents of the parent company issued by authorities of the country or region of origin; e.g. Constitution, Certificate of Incorporation, Business Certificate, Tax Certificate;
(3) A ¨capital and credit certification〃 letter issued by a bank which has business relations with the applicant certifying its financial and credit standing;
(4) Power of attorney issued by the applicant to the person who shall be the Chief Representative, his curriculum vitae and photograph;
(5) Licence issued by the building in which the representative office will occupy;
(6) A brief summary of the operations and business of the company.

Time Required

It normally takes 30 days from receiving instructions and full particulars and necessary documents form the applicant to issue the Approval Certificate. Thereafter, the Post-establishment Registration procedures take about 30 days. However, a registration could be completed in 30 days.

Procedure for Change and Extension of the Representative

To change any registered items (e.g. Name of the organization, location, scope of business), or when the expiration date of registration certificate is imminent, the office should immediately report to the registration authorities for relevant procedures. The validity of resident representative offices of foreign enterprises is three years for each approval. In case of extension, the office should report to its proxy three months ahead of the expiration date for the extension applying procedures.

See also:

Introduction to China Permanent Representative Office
Permanent Representative Office Registration Procedures
Legal Status of Permanent Representative Office
Business Scope of Permanent Representative Office
Responsbilities of Chief Representative
Taxation of Permanent Representative Office