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A Chinese representative office (RO) is an institute setup
in China, representing its parent company for liaison with Chinese
counterparts. A representative office (RO) is not considered to be a separate
legal entity. It cannot directly engage in business operation. However, the
representative office (RO) which its parent company can enter into contracts
with its supplier/customers in China in its own name, but not under the name of
representative office (RO). A representative office is popular for those who
are willing to enter China at the test period of business and investment.
Chengdu is becoming
one of the favourite cities for investment in western China. Many high-tech
enterprises from outside are beginning to settle down there.
Chengdu Representative Office Registration-Representative
Office Name
The Chinese government has a name format for anyone who
wants to setup a representative office (RO)in China, the format is: country
(area) + parent company name + Chengdu Representative Office
Chengdu Representative Office Registration-The Privilege and
Function of Representative Office
The representative office (RO) enjoys a great popularity
among foreign investors since its easier setup & management. Unlike foreign
investment enterprises, representative offices are not required to meet
stringent requirements for items such as capital injection.
The functions of a representative office (RO)
a. It can handle market research, sourcing, representative
office (RO)investigation, quality of representative office (RO)for parent
company, liaison with customers and suppliers
b. It cannot enter into purchase/sales contracts and receive
payment for services, issue invoices.
c. A representative office (RO) can open bank accounts and
employ staff for above- mentioned purposes.
d. Apply for work permit and residence permit.
e. A representative office (RO) is still subject to tax
liability, so monthly tax return should be carried out regularly.
f. If a representative office (RO) is set up in Shanghai, it
is qualified to get a car without entrance tax.
Chengdu Representative Office Registration-Required
Documents for application
(1) Copy of the business license or certificate of
incorporation of parent company;
(2) The original and copy of identification documents (ID
card, passport) of representatives, and five color photos;
(3) Two original bank reference letters (from investor's
bank) indicating foreign investors' credibility, issued within 6 months in both
English and Chinese version;
(4) Lawyer's legalization or notarization endorsed by local
China Embassy or Consulate
(5) The lease of commercial office is between lesser and
lessee. The lessee should be acted by chief representative, or parent company.
The lease should be endorsed by local Housing Management Authority.
Chengdu Representative Office Registration Service
Content
a. Both original and duplicate copy of business license;
b. Registration license of the Taxation Bureau.
c. Company Seal
d. Organization Code License
Chengdu Representative Office Registration-Required Time
Once all the necessary documents for application are ready
for submission, government approval can be got within 15-20 working days.
Chengdu Representative Office Registration-Service Price
& Payment
ATA service fee is not including government fee, 50% deposit
should be paid before handling the case, and balance should be paid when
commission has been well done.
Chengdu Representative Office Registration-Chengdu Taxation
Although a representative office (RO) is not to conduct
business, it attracts tax as stated below:
1). Individual Income Tax (IIT)
IIT stands for Individual Income Tax which rates from 5% to
45% based on salary income exceeding more than RMB2000 for local employee and
RMB 4800 for overseas employee. All the representative office (RO) staff is
subject to IIT if his income exceeds the limit. IIT is calculated according to
such a formula: IIT= (income- limit)* rate.
2). Business Tax (BT)
BT stands for business tax which is based on monthly
business operational expense, the rough rate is 5% based on your expenses. It
is calculated according to the formula like this: BT= expenses/ (1-15%) ×5%.
3). Enterprise Income Tax (EIT)
EIT stands for enterprise income tax which is based on
quarterly business operational expenses, the rate is 25%. It is calculated
according to the formula: EIT = expenses/ (1-15%) ×10%×25%.
Tannet Malaysia is an International Consultant Firm based in Hong Kong, Shenzhen. We provide one stop business services to those investor who are interested to invest into Asia market such as International Company Registration, International Trademark Registration, Company Secretarial Services and etc. Kindly contact us for more information if you are interested on our other services!
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