PathToChina.com

By Vincent Cheung from www.pathtochina.com

1. Brief Introduction
Representative is just an extension of its parent company rather than a separate legal entity, so it’s only entitle to conducting non-profiting-making activities like market research
quality control, sourcing ,marketing , coordination and liaison. Signing contract directly with clients and invoicing are not allowed.

It’s very easy and cheap to register a representative office in Shanghai. There aren’t any restrictions on its establishment. Any types of companies can have their representative office registered in Shanghai.

2. The Rental of the Office Room
In Shanghai, you have to rent the office room before you set up a company, or your application won’t be approved. A lot of time and money will be wasted, and your plan will be put on jeopardy if it’s not handled properly.

All Representative Offices in Shanghai are required to rent an office in Grade A building. (In Chinese, we call it “涉外指定办公场所”). The office room of a representative office should be on SMERT’s (Shanghai Municipal Foreign Economic Relations & Trade Commission) list of office buildings designated for foreign organizations .Usually it’s called Grade A building. Before the signing of the lease contract, you should Ask for this Certificate of approved Grade A building for Foreign Organizations (涉外办公楼证书) and Ro’s Resident’s Certificate(驻在证明) from the property management company of the office block.

Lease agreement should be signed between the Landlord and Parent Company’s director or authorized person;The contract form should be in standard form provided by Shanghai Real Estate Bureau。Other documents needed for the location: The copy of Certificate of approved building (the so-called “Permit for the designated office building” (涉外指定办公场所))for foreign representative offices.
Landlord needs to provide his property ownership certificate copy. In case Landlord is anindividual. The landlord’s original signature on the first page of property ownership certificate Landlord’s Identity Card Copy as well as his/her original signature on the ID copy. In case Landlord is a Company, original company seal on the first page of property ownership certificate and landlord’s business license copy with original company seal on the first page should be provided. A letter of authorization would be necessary if the individual who signs the lease contract is different with the one showed on the property ownership certificate. In case that landlord is a sublessor . The sublease agreement stamped by the original landlord is also needed.
You have to be sure that the office hasn’t been registered. Before you sign the contract, be sure you’ve added this item to the contract: if the office room cannot be registered as a representative office, the landlord must refund the deposit.

After the signing of the contract, visit Shanghai real estate trade center to get the
Certificate of Record of Registration. Lease contract needs to be notarized by Local
Notary Public in case Party A or Party B is a foreign citizen.

3. How to name your representative office in Chinese
Country Name + Parent company’s Chinese name [By pronunciation] + Shanghai Representative Office. For instance, Dech Company Ltd’s Shanghai office name: 美国德奇有限公司上海代表处

4. Free License Plates
For foreign companies and rep offices in Shanghai, there is one favorable policy on purchasing a car—they are entitled to getting free license plate. For example, a trading WFOE( Wholly Foreign Owned Enterprise) can get a free license plate as long as they’ve injected at least 140,000 registered capital. More free license plates will be offered as the registered capital goes higher. A representative office can get one after it’s officially established. Have any idea how much does a license plate cost in
Shanghai? It’s over 40,000 RMB! It means it’s even more expensive than the price of a small car like QQ.

JVs, WFOEs (Wholly Foreign Owned Enterprise) with a registered more thant 200,000 USD, RO (Representative Offic), foreign investors as well as Hong Kong, Taiwan and Macau compatriots are entitle to importing duty free cars.

5. Documents Need to Be Prepared

1.Application Letter (2 originals)

2. Appointment Letter (2 originals)
A letter appointing the chief representative

3. Parent company’s Certificate of Incorporation (2 originals).
Certified by Chinese embassy.

＊For HK companies, the CI & BR need to be certified by China Legal Service Hong Kong Limited.

4. Bank Reference Letter ( 2 originals)
Issued by the bank of your parent company

5. Parent company’s Brief Introduction (1 original)
Covering “Business scope, Tel, address, Company director’s name, etc”

6. Lease Documents

Including 2 office lease agreements, record of certificate etc

＊You need to rent the office room in a Grade A building which is certified by Shanghai
Municipal Foreign Economic Relations and Trade Commission ( SMERT) to be rent to
representative offices.

＊The landlord should provide “property ownership certificate”, “business license” and the building’s property management company needs to provide RO Residents Certificate.

7. Chief representative resume and passport copy, 4 passport size photos,

8. Letter of Authorization (2 originals)
Wrote by the legal representative of parent company to appoint a person to sign the
legal documents in the process of the representative office establishment
＊

6. Registration Procedures
01 Rent an office room in approved grade A building
02 Lease Agreement Notarized by Notary Public and recorded in real estate trade center
03 Name pre- registration with SAIC
04 Issue of Registration Certificate by SAIC
05 Application for the Representative Office ’s chop (Office Seal)
06 Application for the Enterprise Code License and approval of certificate
07 Statistical Bureau Registration
08 Registration with SAFE and issue of approval
10 Opening of Foreign Exchange Bank Account and RMB bank account
11 Registration with China Tax Bureau
12 Obtainment of Health Certificate, Work Permit, Residence Permit for the Chief representative

7. Hiring Staff
Click here for an article titled “How Does a Representative Office (RO) Hire Chinese Staff in Shanghai”
9. Taxation
Click here for an article titled “Representative Office Taxation in China”

Provided by www.pathtochina.com

“Path To China “ is an International Business Consulting Firm that provides foreign investors with business registration service in China. For business registration service , please contact Vincent by vincent@pathtochina.com

Shanghai:
Tel: (8621) 5102.5279
Email: sales@PathToChina.com
Suite 9B, 485 North HeNan Road (N.) Shanghai
200071 USA:
Tel: (303) 8006616
Email: sales@PathToChina.com
3801E, Florida Ave., Suite 412,
Denver, Co. 80210

This entry was posted on Tuesday, November 27th, 2007 at 1:46 am and is filed under Establishing Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.