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Set Up a Representative Office in Beijing China, Establishing Rep Office (RO) in
Beijing, Beijing Rep Office Setup Procedures
Beijing is the capital of the People's Republic of China. The municipality is under
direct administration of China's Central Government. The city is the center of politics,
culture, and international exchanges, as well as one of the largest metropolises of
industry, finance and trade
There are ten districts and eight counties under the jurisdiction of Beijing. There are
Dongcheng, Xicheng, Chongwen, Xuanwu, Chaoyang, Haidian, Fengtai, Shijingshan,
Mentougou and Fangshan Districts, as well as Changping, Shunyi, Tongxian, Daxing,
Pinggu, Huairou, Miyun and Yanqing counties
Currently, Beijing is the country's largest science and technological, and cultural hub.
The region has more than 400 national research institutes. The Chinese Academy of
Sciences and the Chinese Academy of Engineering Science has more than 400
academicians in Beijing. The city boasts more than 70 universities and colleges
including the renowned Beijing University and Qinghua University
Beijing features a solid industrial foundation and strong overall economic power.
Since 1990, the GNP (gross national product) of the city has been steadily increasing
at an annual rate of 11 %. In China, its overall economic power is next only to
Beijing is the location of the headquarters of the People's Bank of China, the central
bank, as well as many other major financial and insurance institutions in China. The
city plays a significant role in implementing the country's financial guidelines and
policies, and in the decision-making and adjustment of the macro-economic policies.
Consequently, the city has great attraction towards international capital and financial
Beijing is also a Chinese city that attracts large amounts of investment from
transnational corporations. In the recent years, more and more transnational groups
are choosing Beijing as the destination to establish Sino-foreign contractual joint
ventures or their regional headquarters. Of the 270 transnational and
world-renowned corporations that have invested in Beijing, 126 of them are among
the world's top 500 industrial giants or service companies. So far, these companies
have registered 5,600 representative offices in Beijing, representing more than 80
countries and regions, which is a first in China. All these have laid a solid foundation
for the city's further opening up to the outside world.
When investors have plans on establishing representative office in Beijing, it is better
for them to acquire more information in order to run a successful business in Beijing
An RO has no legal personality, meaning it does not possess the capacity for civil
rights and conduct, cannot independently assume civil liability, and is limited in its
hiring ability. Chinese staff working for an RO, although not limited in number, must
be employed through a human resources agency that will sign a contract with the RO
on the one hand and with the Chinese staff on the other in order to ensure social
security and housing fund contributions are paid on a regular basis. No more than
four foreign employees can be hired per RO. Foreign staff working for ROs should
have an employment relationship with the parent company abroad, and any disputes
should be settled under the laws of that country
ROs are usually taxed on gross expenses with the overall tax burden around 11.75
percent of total monthly expenses; however, these rates may be increased by the
relevant tax bureau according to the industry. If the chief representative is a foreign
national, whether they stay in China or not, they shall be subject to individual tax
based on the income derived from the RO.
Setting up a representative office in Beijing China primarily requires 4 stages and this
entire process can take up till 2-5 months time.
- Pre-approval Stage
Once you have decided to base your representative office in which city, the next
thing is to approach the local Ministry of Commerce (MOFCOM) for contacts of a
local designated foreign enterprise service company (FESCO) who will be in charge of
your representative office application process. You should be paying approximately
US$800 to $1000 to a designated FESCO for their service of notifying you on the
relevant upcoming deadlines and administrative procedures. In addition, a signed
lease agreement is one of the pre-requisite for the approval;
Therefore it is vital to secure a lease for a “grade A” office space before submitting
Stage 2 - Application Stage
Generally your application approval should be done by MOFCOM, but if your industry
is specific to banking, insurance, law, accounting and media, you may have to
approach the relevant authority which has jurisdiction over your industry sector.
Once approved, you should have the Certificate of Approval certifying your legal
presence for the next 3 years which can be further extended.
Stage 3 - Registration Stage
This stage is to register for your representative office’s business license which must
be renewed annually. It is important to note that you must complete the registration
within 30 days of your approval from stage 2. The application together with the
supporting documents is required to be submitted to the local State Administration
of Industry & Commerce (SAIC and the process normally takes about 1-2 months
Stage 4 - Post Registration Procedure
Firstly, In China, it is expected for your representative office to register the office
location with the local police (Public Security Bureau) and to register with local and
Secondly, you should make financial and corporate seals as it is a practise in China to
use them on official documents. Thirdly, opening a foreign exchange bank account
will aid to facilitate overseas fund transfer. Fourthly, to import the relevant
equipments or materials, remember to complete the relevant customs registration.
Lastly, get a FESCO to assist you in recruiting of Chinese staff.
Once all this is done, your representative office is set to establish its presence in
China. However before getting to this stage, a good market research study is required
to ensure that your products or services are viable in the Chinese market.
1 A representative office may, however, negotiate contracts that are later signed in
the name of the home office located outside China.
2 The application letter should contain, in part, the following: a description of the
company’s history, business and scope; the names of the Chairman of the Board, the
General Manager and directors; the names of its major trading partners in China; its
business volume; the proposed name of the representative office; the purpose for
setting up the representative office and the scope of its activities; the duration of the
office and its chief representative.
3 Head office incorporation documents include certified copies of the company’s
business registration certificate, the certificate of incorporation, the memoranda and
articles of association, etc.
4 Other post registration formalities include: registering with the tax bureau; opening
a bank account; completing a residence application with the with the local Public
Security Bureau; applying to the Customs Administration for permission to import
office equipment and daily necessities for use by the representative office and its
personnel; appointing a FESCO to recruit local Chinese employees; etc.
Set Up a Representative Office in Beijing is a big project by itself, which requires
financial and time commitments, business management knowledge and China
expertise. Identifying a competent agent to manage the complex process will be a
cost and time effective way to avoid potential pitfalls
Since 2006, Tommy China Business Consulting has been focusing on consulting
services for our clients to Setting up a Representative Office (RO) in Beijing.
Please visit http://www.tommyconsulting.com/CorporateFormation.html
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