|
In this section you will find information on how to register a Representative Office, how to handle its accounting, taxation, human resources, office, and the steps to follow during the incorporation process. |
What is a Representative Office?
A representative office is an organization that carries out market contacts and research for its headquarters, and assists in developing its business in other countries.
In comparison with WFOE companies, representative offices can not issue any invoices, and therefore gain any income by itself. All expenses of a representative office have to be fully funded by the company headquarters.
If you would like to know more about the various aspects of setting up and running a representative office in China, you can contact us via livechat, email or phone for more information.
You can also request a quote for the following services:
- Incorporation of a representative office
- Accounting & tax services for RO
- Tax strategy for RO
- Annual financial audit
If you would like to find out more information about the industry you want to join in China, please visit our market-entry services section.
Tax & Accounting
All foreign organizations in China are subject to tax declarations, including enterprise income tax, business tax, individual income tax, stamp tax, value added tax, and other taxes.
The kind of taxes applicable may vary for different organizations based on their business scopes and operations.
If you would like to know more about the various aspects of how to deal and manage tax & accounting for a representative office in China, you can contact us via livechat, email or phone or more information.
You can also request a quote for the following services:
- Incorporation of a representative office
- Accounting & tax services for RO
- Tax strategy for RO
- Annual financial audit
If you would like to find out more information about the industry you want to join in China, please visit our market-entry services section.
Human Resources
Chief Representatives of ROs in China can either be Chinese nationals or foreigners. If the Chief Representative is a Chinese national, he/she must hold a certification issued by a human resources company that provides services for foreign companies and is regulated by the Government, which provides services for foreign companies. ROs can both hire Chinese employees and foreign staff, or foreign staff only. However, management of Chinese HR must be controlled by a human resources organization regulated by the government.
Generally speaking, in Beijing and Shanghai, the wage of an employee with English skills is as follows: Minimum salaries are typically 3000 (SEC), 4000 (legal consultant), 5000 (marketing or salesperson) and 8000 (manager) RMB.
Different requirements determine different salaries. RO should bear the employees' social insurance premiums and housing fund for Chinese nationals. This amount is equal to 50% of an employees' salary and partially paid by the employee, but for the most part of it should be born by the employer. Details are as follows:
| I. Social insurance (take Ceiling 2008 for example, implemented in line with relevant policies of the state) |
|||||||
| S.N. | Item | Ceiling(2008) | Pay by enterprise |
Pay by individual |
Charge | ||
| % | Amount | % | Amount | ||||
| 1 | Pension insurance |
9,966.00 | 20.00 | 1,993.20 | 8.00 |
797.28 |
2,790.48 |
| 2 | Unemployment insurance |
9,966.00 |
1.50 | 149.49 | 0.50 | 49.83 |
199.32 |
| 3 |
Medical insurance |
9,966.00 | 10.00 | 996.60 | 2.00+3rmb | 202.32 |
1,198.92 |
| 4 | Work injury insurance |
9,966.00 | 0.50 | 49.83 | - |
- |
49.83 |
| 5 | Maternity insurance |
9,966.00 | 0.80 | 79.73 | - |
- |
79.73 |
| 6 | Housing fund | 9,966.00 | 12.00 | - | 8 or 10 | - |
Payment by separate account |
| Subtotal of social insurance | Remarks: |
Enterprise shall set the ceiling based on the average salary of personnel of last year. Ceiling of social insurance shall be adjusted in every April in line with relevant policies of the state Ceiling of housing fund shall be adjusted in every July in line with relevant policies of the state |
4,318.28 | ||||
The Chinese government does not have the requirement of paying social insurance premiums for foreign employees, nor regulations about the salary of the Chief Representative. However, this salary should correspond with the practical minimum that is required by the government and the Taxation Bureau. This minimum is no less than the income of a foreign employee from foreign countries which is equal to 15,000RMB /m, a Chinese employee's income per month.
The Office
A physical address for the Representative Office is required. This address should be the official business office. Not all residential addresses cannot be used to register a business.
In China, different cities have different office requirements. In Beijing and Shanghai, the rentals are the highest, from 1.5RMB to 12RMB per sq.m. per month. Typical rental prices range from 4000 (one bed room), 6000 (two bedrooms), and 8000 (three bedrooms) RMB.
How can you find it? China Solution can help you obtain information from the leasing agency, avoiding the hassle of being cheated.
Contact us via livechat, email or phone or more information.
RO Step by Step
Below you can find a list by business scope category of the procedures needed to set up a Representative Office in China. Though the steps are complete and accurate, we invite you use our services rather than attempting yourself. We can save you time and long, stressful queues.
