PathToChina.com

　　(Promulgated on February 13, 1995)
　　Whole document
　　Detailed Rules of the Ministry of Foreign Trade and Economic Cooperation
　　for the Implementation of the Examination-Approval and Administration
　　of the Resident Representative offices of Foreign Enterprises in China
　　(Promulgated on February 13, 1995)
　　Chapter 1 General Principles
　　Article 1
　　With a view to developing China’s foreign trade, promoting international economic cooperation and fortifying the administration of the resident representative offices of foreign companies, enterprises and other economic entitles in the People’s Republic of China, the present Detailed Rules are formulated in accordance with the Interim Provisions Concerning the Administration of the Resident Representative Offices in China of Foreign Enterprises, which were promulgated by the State Council of the People’s Republic of China on October 30, 1980.
　　Article 2
　　These Detailed Rules shall apply to the resident representative offices set up within the territory of the People’s Republic of China by foreign traders, manufacturers, shipping agents, contractors, consultant companies, advertising agencies, investment companies, leasing companies and other economic entities (hereinafter called “foreign enterprises”).
　　Article 3
　　A foreign enterprise which applies for the establishment of its resident representative office in the territory of the People’s Republic of China shall, upon approval by the Ministry of Foreign Trade and Economic Cooperation or its authorized commissions for foreign trade and economic relations (hereinafter called the “examination-approval authorities”) of the provinces, autonomous regions, municipalities directly under the Central Government and of cities with separate listing in the state plan, register with the State Administration for Industry and Commerce or its authorized administrations for industry and commerce (hereinafter called the “registration authorities”) of the provinces, autonomous regions, municipalities directly under the Central Government and of the cities with separate listing in the state plan.
　　Article 4
　　The resident representative office of a foreign enterprise may, on its behalf and within its business scope, be engaged in such indirect business activities as business liaison, products recommendation, market research, technological exchange, etc. in the territory of the People’s Republic of China.
　　Article 5
　　Without prior approval and registration, no foreign enterprise shall have its resident representative office or be engaged in any of the business activities set forth in these Rules in the territory of the People’s Republic of China.
　　Article 6
　　The resident representative office and its staff members of a foreign enterprise shall abide by the laws and regulations of, and shall not injure the national security and social public interests of the People’s Republic of China.
　　Article 7
　　The business activities conducted by the resident representative office and its staff members of a foreign enterprise pursuant to these Rules shall be protected by law of the People’s Republic of China.
　　Article 8
　　The essential conditions and requirements for a foreign enterprise to apply for the establishment of a resident representative office are as follows:
　　(1) the enterprise must be legally registered in the country where it is located;
　　(2) the enterprise must enjoy a good commercial reputation;
　　(3) the enterprise must provide the authentic and reliable materials and documents required by these Rules; and
　　(4) the enterprise must go through the registration and application procedures as provided for in these Rules.
　　Chapter 2 Establishment, Extension, Alteration and Termination
　　Article 9
　　A foreign enterprise which applies for the establishment of a resident representative office in the territory of the People’s Republic of China shall submit to the examination and approval authorities a written application. The examination and approval authorities shall, within thirty (30) working days, decide whether to approve or disapprove it, and inform the foreign enterprise in due course.
　　Article 10
　　A foreign enterprise which applies for the establishment of a resident representative office shall commission as its undertaking agency a company which is approved by the competent authorities of the People’s Republic of China and enjoys the right of foreign trade operation, or a foreign economic relations and trade entity or a service unit for foreigners recognized by the examination and approval authorities to submit, on its behalf, to the examination and approval authorities all the documents and materials and go through the application and registration procedures.
　　Article 11
　　Applications for the establishment of resident representative offices undertaken by the companies, foreign economic relations and trade entities, services units for foreigners directly under the ministries and commissions of the State Council shall be submitted to the Ministry of Foreign Trade and Economic Cooperation for examination and approval; those undertaken by the companies, foreign economic relations and trade entities, service units for foreigners of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall be submitted to the local commissions (offices) for foreign economic relations and trade at the same level for examination and approval.
　　Article 12
　　A foreign enterprise which applies for the establishment of a resident representative office shall submit to the examination and approval authorities the following documents:
　　(1) an application signed by chairman of the board of directors or general manager of the enterprise with the inclusion of: a brief introduction of the enterprise, purpose of such establishment, and the name, personnel accredited (chief representative and representatives), scope of business, residence period, office location, etc. of the resident representative office;
　　(2) a certificate of legal operation (transcript) issued by the competent authority of the country where the enterprise is located;
　　(3) a certificate of credit (original) issued by a bank which has business relations with the enterprise;
　　(4) letters of authorization signed by the chairman of the board of directors or general manager of the enterprise for commissioning the chief representative and representative(s) of the resident representative office, and resumes of the chief representative and representatives and their identity cards (duplicate). If the chairman of the board of directors is appointed as the chief representative or representative, the letter of authorization shall be signed by no less than two members of the board of directors of the enterprise. In case there is no board of directors in the enterprise, relevant papers shall be signed by the executive director;
　　(5) a completed Application Form for the Establishment of Resident Representative Office of Foreign Enterprises and a completed Application Form for the Staff Members of Resident Representative Offices of Foreign Enterprises; and
　　(6) other application materials which the examination and approval authorities deem necessary.
　　Article 13
　　The resident representative office of a foreign enterprise shall be named in the form of Name of Origin Country + Name of Enterprise + Name of City + Representative Office.
　　Article 14
　　After the enterprise acquires the approval for establishment of a resident representative office, the chief representative of the office shall, within thirty days from the date of receipt of the approval, register with the registration authorities by producing the certificate of approval. In case of failure to go through the registration formalities within the time limit, the certificate of approval shall be invalid automatically and shall be revoked by the examination and approval authorities.
　　Article 15
　　The resident representative office of a foreign enterprise shall, within thirty days after it has acquired the approval of its application and conducted its registration, go through the formalities with the public security organs, tax authorities, customs administration and banking units by presenting the certificate of approval, registration certificate and certificate of representative.
　　Article 16
　　The maximum residence period of the resident representative office of a foreign enterprise by one approval shall be not longer than three years. The residence period shall begin on the day of the issuance of the certificate of approval. Where the foreign enterprise intends to extend the period, it shall, sixty days before the expiration of the period, submit an application to the examination and approval authorities through the original undertaking agency and go through formalities for the extension.
　　Article 17
　　The resident representative office of a foreign enterprise which applies for extension shall provide the examination and approval authorities with the following documents;
　　(1) an application for extension signed by the chairman or general manager of the enterprise;
　　(2) a business report of the resident representative office during the last residence period;
　　(3) a certificate of credit (original) issued by a bank which has business relations with the enterprise;
　　(4) a certificate of legal operation (transcript) issued by the competent authority of the country where the enterprise is located;
　　(5) a duplicate certificate of approval and a certificate of registration of the resident representative office; and
　　(6) an Application Form for Extension of Resident Representative Offices of Foreign Enterprises.
　　Article 18
　　The resident representative office of a foreign enterprise which had its application for extension approved and obtained a certificate of approval for extension issued by the examination and approval authorities shall, within thirty days after receipt of the approval and by presenting such certificate, go through the formalities with the registration authorities for extension and the formalities with the public security organs, tax authorities, customs administration, banking units, etc.
　　Article 19
　　Where a foreign enterprise requests for an alteration of its name, a replacement or an addition of the chief representative or representative (s), or an alteration of the business scope, residence period or office location of its resident representative office, it shall, through the original undertaking agency, provide the original examination and approval authorities with an application for alteration signed by the chairman or general manager of the enterprise together with materials relevant to such alterations, and shall fill in the Application Form for Alteration of Resident Representative Offices of Foreign Enterprises. Upon the approval, the resident representative office shall, within thirty days and by presenting the certificate of approval for alteration, go through the formalities with the registration authorities for alteration and the formalities with the public security organs, tax authorities, customs administration, banking units, etc.
　　Article 20
　　Where a foreign enterprise applies for a revocation of its resident representative office due to the expiration of the residence period or for a termination of the business operation before such expiration, an application for cancellation signed by the chairman of the board of directors or general manager of the enterprise shall, thirty days before the expiration, be submitted by the original undertaking agency to the original examination and approval authorities for record, and the formalities of cancellation pertaining to registration of industry and commerce, permanent residence and record at customs shall be gone through after the clear-ups of debts and taxes and other issues.
　　Article 21
　　The applications concerning the establishment, extension, alteration and revocation as well as the letters of authorization for the chief representative and representative (s) of the resident representative office of a foreign enterprise shall be written in the Chinese language; if done in other languages, a translation in the Chinese language shall be attached hereto. Should languages other than the Chinese language be used in other materials for application, a translation in the Chinese language shall be attached hereto.
　　Article 22
　　The examination and approval authorities shall be entitled to, when it deems necessary, require the foreign enterprise which applies for the establishment of a resident representative office to have all or part of the materials for application notarized by the notary organ of the country where the enterprise is located, and to have them certified by the Chinese embassy or consulate in the country where the enterprise is located.
　　Chapter 3 Administration
　　Article 23
　　The Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China and its authorized commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, in accordance with the Interim Provisions Concerning the Administration of the Resident Representative Offices of Foreign Enterprises in China promulgated by the State Council of the People’s Republic of China on October 30, 1980 and the present Rules as well as relevant laws and regulations and jointly with other departments concerned, conduct administration, supervision and inspection of (over) the business activities of the resident representative offices of foreign enterprises.
　　Article 24
　　Resident representative offices of foreign enterprises and their staff members shall comply with the laws and regulations of the People’s Republic of China in respect of entry and exit, residence, industry and commerce, taxation, customs, foreign exchange control, employment of staff members, house-renting and other matters and be subject to the administration, supervision and inspection from the competent departments of the Chinese Government.
　　Article 25
　　Resident representative offices of foreign enterprises which import exhibits for display on their business premises shall submit to the original examination and approval authorities an application attached with a list of import exhibits, and, upon approval, report to the Customs of the cities where the offices are located for varied and quantitative verification by presenting the approval documents. The Customs shall, in accordance with the Measures of the Customs of the People’s Republic of China on Control over Imports for Temporary Purpose and the Regulations of the Customs of the People’s Republic of China on the Application for Guarantees for Import and Export Goods, give check and clearance of the exhibits after collecting guaranty money equivalent to the duties.
　　Exhibits in the guaranty period shall be subject to the Customs control, and shall not be sold, transferred or granted. The exhibits shall, within six months from the day on which they were imported, be re-exported; failure to do that within the period specified, they shall be dealt with in accordance with related provisions.
　　Article 26
　　A foreign enterprise shall be responsible legally for all the business activities conducted by its resident representative office within the territory of the People’s Republic of China.
　　Article 27
　　The commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, in every January and July, present data concerning all the resident representative offices they approved in the year to the Ministry of Foreign Trade and Economic Cooperation for record.
　　Article 28
　　The Ministry of Foreign Trade and Economic Cooperation and its authorized commissions (offices) for foreign economic relations and trade of the provinces, autonomous regions, municipalities directly under the Central Government and cities with separate listing in the state plan shall, depending on the seriousness of the case, impose such sanctions as disciplinary warning, suspension of business upon instruction and revocation of the approval on the resident representative offices of foreign enterprises which violate laws and regulations of the People’s Republic of China and the present Rules.
　　Chapter 4 Qualifications for Chief Representative and Repre- sentative(s)
　　Article 29
　　The chief representative and representative (s) of the resident offices of foreign enterprises shall meet one of the following qualifications:
　　(1) a foreign citizen with a legitimate passport (excluding foreign students studying in China);
　　(2) a Chinese citizen who has the right of permanent residence in a foreign country;
　　(3) compatriots from Hong Kong, Macao or Taiwan with valid credentials; or
　　(4) where a Chinese citizen (excluding Chinese citizens mentioned in Item 2 of this Article) is employed as the chief representative or representative of its resident representative office, a foreign enterprise shall entrust a local service unit for foreigners or other entity designated by the Government of the People’s Republic of China to process the application and report in accordance with relevant laws and regulations of the People’s Republic of China.
　　Chapter 5 Supplementary Provisions
　　Article 30
　　The present Rules shall apply, mutatis mutandis, to foreign enterprises which apply for the commission of their permanent representatives in China.
　　Article 31
　　Affairs not covered in these Rules shall be dealt with in accordance with related laws and regulations of the People’s Republic of China.
　　Article 32
　　The present Rules shall apply, mutatis mutandis, to enterprises in Hong Kong, Macao and Taiwan which apply for the establishment of their resident representative offices in the mainland areas of China.
　　Article 33
　　The authorities of interpretation of the present Rules resides in the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China.
　　Article 34
　　The present Rules shall enter into force as of the date of their promulgation, and the provisions pertaining to Issues for the Examination and Approval of Resident Representative Offices of Foreign Enterprises and of Enterprises in Hong Kong and Macao (No. 272 by Wai Jing Mao Guan) shall be abrogated on the same day.

Measures for the Registration of Resident Lawyers of the Chinese Representative Offices of Foreign Law Firms

　　Adopted by the Fourth Standing Executive Council of the Fourth All-China Lawyers’ Association on September 18, 1999

　　Article 1 These measures are formulated in light of strengthening the administration of the resident lawyers of the Chinese representative offices of foreign law firms in accordance with the relevant spirit of the Law of the People’s Republic of China on Lawyers and the Statute of All-China Lawyers’ Association.

　　Article 2 These measures shall apply to the resident lawyers of the Chinese offices of the foreign law firms that have obtained approval of the Ministry of Justice of the People’s Republic of China for establishment.

　 　The resident lawyers of the law firms of Hong Kong and Macao that have obtained approval for establishing representative offices in the mainland shall refer to these measures for application.

　　Article 3 The resident lawyers of the Chinese offices of the foreign law firms shall be the chief representatives, representatives and foreign lawyers who stay in China for more than 90 days consecutively handling the work of the Chinese representative offices of the foreign law firms that have obtained approval of the Ministry of Justice and have been registered with the State Administration for Industry and Commerce.

　　Article 4 The resident lawyers of the Chinese offices of the foreign law firms shall be registered.

　　Article 5 The All-China Lawyers’ Association shall be responsible for the registration of the resident lawyers of the Chinese offices of the foreign law firms.

　　Article 6 The resident lawyers of the Chinese offices of foreign law firms shall apply to the All-China Lawyers’ Association for registration for the next year from November 20 to December 20 of each year, subject to submitting the following materials:

　 　1. registration form (in Chinese, duplicate);

　　2. credentials made by a chief partner of the foreign law firms attesting the good qualities of the applicant (original in both Chinese and English);

　 　3. written pledge of the applicant to observe the laws and pertinent regulations of People’s Republic of China.

　　Article 7 The foreign law firms that have obtained approval of the Ministry of Justice of the People’s Republic of China for the establishment of representative offices in China shall, within 30 days after the registration with the State Administration for Industry and Commerce, apply to the All-China Lawyers’ Association for the registration of resident lawyers, subject to submitting the following materials:

　 　1. certificate of approval for establishment of representative office (replica in duplicate);

　　 2. credential of representative;

　　 3. credentials made by a chief partner of the foreign law firms attesting the good qualities of the applicant (original in both Chinese and English);

　　4. resume of the resident representative;

　　 5. written pledge of the resident representative to observe the laws and pertinent regulations of the People’s Republic of China (original in Chinese).

　　Article 8 In case of any change or addition of resident representatives, the Chinese offices of the foreign law firms shall, within 30 days after obtaining the aforesaid approval and registration, apply to the All-China Lawyers Association for registration, subject to submitting the certificate of representative.

　　Article 9 The resident lawyers of the Chinese offices of the foreign law firms shall, when apply to the All-China Lawyers’ Association for registration, pay a registration fee in accordance with the relevant provisions of China.

　　Article 10 In case the resident lawyers violating Articles 4 and 9 of these measures, the All-China Lawyers’ Association shall apply to the Ministry of Justice for disqualification or punishment in accordance with the relevant provisions of the Regulations for the Administration of the Chinese Branches of Foreign Law Firms.

　　Article 11 These measures shall enter into force as of December 1, 1999.

　　Article 12 The right of interpretation of these measures shall remain with the Ministry of Justice of the People’s Republic of China

In recent years, the average rental for Grade A office buildings in Shanghai rise 15% y-o-y. A survey shows that the average rental in Shanghai in 2005 was 0.84 USD/sq.m./day, the average rental in Xiaolujiazui area, Pudong, exceeded 1 USD/sq.m./day, and the average rental in Nanjing Road (West) area on the west side of Huangpu River was 1.04 USD/sq.m./day. The main reason was the newly-added supply of Grade A office buildings has decreased while the demand was rising. The leasing rates of Grade A office buildings of the above three categories were all approx. 95%. Since 2005, a number of high-grade hotels and supporting facilities have been under construction. The short supply of Grade A office buildings in Shanghai is expected to be eased. At the same time, the rental for office buildings located outside the central business area of Shanghai and Grade B office buildings are rising slowly and foreign investors can have more options.

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

Edited by Vincent Cheung from www.pathtochina.com  

After representative office ( RO) is ultimately the suitable vehicle you choose to establish a presence in China, the primary concern is the taxation  There are three tax bases in

China for representative office : tax exemption, cost-plus, actual income. 

  The first question you are supposed to ask is whether the activities your RO engage in are tax-exempt or taxable. Not surprisingly, most of ROs are required to pay tax in China, that’s why you should have your RO registered in tax bureau during the incorporation of it, do tax filing on a monthly basis, and submit annual audit report.  

What types of Representative Office or Activities Are Tax-exempt?  

The taxability of a RO is decided by the nature of it. Effective in July 2003, Guo Shui Fa (2003) No. 28 has ruled out a lot of tax exemption policies. (more…)

(more…)

Step one: To Set Up a HK Company

1.Introduction of HK Company set up:

Hong Kong has become the world’s eighth largest trading economy calculated in terms of total value of trade undertaken.

Hong Kong is the seventh biggest importer of goods and the ninth biggest exporter. This is an astonishing achievement for a territory with a population of only 6 million.

2.Advantages:

Only Hong Kong source income is subject to Hong Kong tax. For this reason Hong Kong is a suitable base from which to administer an offshore company without tax consequence provided that company does not do business with other Hong Kong companies. A Hong Kong company does not have to state its registered office address or place of incorporation on its (more…)

http://www.flaminghoops.com/

Can you explain the difference between a “Representative Office” and a “Wholly Owned Entity” in Shenzhen/China, especially as it relates to hiring people and getting visas for a foreigner and his family?

Certainly.  With either a Representative Office (”Rep Office”) or a Wholly Foreign Owned Entity (”WFOE”) hiring local staff and visa considerations for foreigners are easily resolved.Representative Office hiring local staff and visa considerations for foreignersa)  Staff: If a Rep Office is the chosen vehicle, you shall be permitted to hire as many local staff as you wish.   However, all your staff must be registered with FESCO, which is a local Government employment agency.  Only a Rep Office must comply with this odd provision, which requires that a Rep Office pay up to about 1000 RMB per month, per person that is hired.  There is no real value recieved for the employer in this situation.  It’s just one of those

(more…)

Contents Provided by www.wfoe.cn  

1. Alteration of Enterprise Name

(1)Application for Alteration of a representative office signed by the Legal Representative;

(2)Approval Notification of representative office Name;

(3)Resolution of Board of Directors;

(4)Business License (original & duplicates);

(5)Other pertinent documents and credentials.

 2. Alteration of Domicile

 (1)Application for Alteration of a representative office signed by the Legal Representative;

(2)Contract of house leasing (lease for more than one year), and real estate certificate; (more…)

By Vincent Cheung from www.pathtochina.com  

 Not surprisingly, closing down a representative office in China is a lot more complicated process than its establishment, especially when your representative office hires a lot of staff and expend a big sum of money. It can be an intolerably lengthy process if not handled in a proper way. Usually, it takes several months to shut down a representative, or it can take forever. The first and also the most critical step to take is tax clearance. You are gonna in big trouble if you cannot prove that you are not evading tax. The tax bureau is exceedingly serious about it.  First, you need to contact the revenue officer, who was designated to manage your rep office’s taxation affairs in the process of the establishment of your rep office. A cancellation form will be sent to you from the revenue officer.

(more…)

Translated by Vincent Cheung from www.pathtochina.com , 

check out the Chinese version  

The latest 《White Paper on Environment for Foreign Investment in Shanghai》 issued last month selects the Top 10 foreign-invested companies of Shanghai on the basis of investment scale。

 These Top 10 Companies are： GE, Sumitomo, Hitachi, Itochu, Mitsubishi, Mitsui Fudosan, Siemens, Fuji Film, Marubeni, VW.The top 10 companies have made a total investment of 4.828 Billion dollars in 561 projects, accounting for more than 30% of the fortune 500 companies’ total investment projects in Shanghai, i.e. 21% of fortune 500 companies’ total investment capital in Shanghai.

Till the end of 2006, there have been 257 “Fortune 500” companies that invest in Shanghai, with an accumulative 1884 investment projects, including 1537 projects undertaken by manufacturing or trading companies, accounting for 82% of the (more…)