Summary

1.   Features of Permanent Representative Office

(1)    Legal Status of a Permanent Representative Office

The Permanent Representative Office (hereafter called “RO”) is a non-legal entity operating representing its foreign parent company registered outside of China, including those registered in Hong Kong, Macau and Taiwan. A RO is not allowed to engage itself in business activities, issue invoices on its own, remitting outward, signing sales or purchase contracts, or receiving income from services performed but may act as a liaison and promotion office for its parent company.

(2)    Name Structure of a RO

The name of a RO should be in the form of "Name of the Foreign Enterprise + Name of the City + Representative Office". For example, USA Kaizen LLC Shanghai Representative Office.

(3)    Business Address (Registered Office)

Before submitting the documents for application for registration, it is required that the office address to be used by the RO be leased and a tenancy agreement signed. The tenancy agreement could be executed by the Chief Representative of the RO or the authorized signatory of the foreign company applying to set up the RO.

2.   Documents Required for Establishing a RO in Shanghai.  

(1)    A set of legalized (by Chinese Embassy or Consulate in the country where the foreign parent company is registered) incorporation documents (Certificate of Incorporation and/or Business Registration Certificate, articles of association) of the investor. For a company registered in Hong Kong, the incorporation documents shall be attested by the notary public in Hong Kong who is authorized by Chinese government authority.

Please note that the foreign parent company of the RO shall be incorporated and operating for more than 2 years otherwise it is not allowed to set up RO in China’s mainland.

(2)    A legalized banker’s reference letter issued in the name of the foreign parent company of the RO. The reference letter shall indicate the name and account number of the investor and shall comment on the account is with no bad record.

(3)    A set of legalized (by Chinese Embassy or Consulate in the country where the foreign parent company is registered) power of attorney to the person who will sign all the application documents on behalf of the foreign parent company.

(4)    A set of legalized (by Chinese Embassy or Consulate in the country where the foreign parent company is registered) letter of appointment for the Chief Representative of the RO and his/her identity documents.

(5)   An original copy of tenancy/lease agreement of the premise to be used by the proposed representative office. Please note the agreement shall clearly indicate the premise is for representative office’s use only and the lease term shall not be less than 12 months.

(6)    A brief summary of the operations and business of the foreign parent company, such as the principal business activities, registered address, contact phone number, name of the foreign parent company; the address and contact number of the managing director of the foreign parent company.

(7)    A copy of resume, 2 pictures, contact address and contact number of the Chief Representative.

If the chief representative is a Chinese citizen, please provide us his/her employment contract with the local foreign service companies or other entities designated by the local government.

(8)    If there is any other General Representative to be registered in the RO in addition to the Chief Representative, the resume, 2 pictures, legalized passport copy, legalized appointment letter, contact address and number of each Representative is required to be provided.

Please note that each RO can only register one chief representative and three general representatives maximum.

3.   Procedures for Establishing a Representative Office in Shanghai

(1)    Preliminary

(a)    Lease of office Space

The foreign parent company of the RO will have to enter into a tenancy agreement in relation to the office space to be used by the representative office for a term of not less than 12 months. The office must be located in a commercial building.

(b)    Legalisation of Incorporation Documents of Foreign Parent Company

The incorporation documents of the foreign parent company, power of attorney, appointment letter and identity documents of the chief representative shall be legalized by the Chinese Embassy or Consulate in the country where the foreign parent company registered. 

(c)    Other Documentation

Such as resume, contact address and number, photocopy of passports//Home Returning Card and resume of the chief representative and general representative.

(2)    Application for Registration of RO

                         

Upon receipt of all duly executed documents, Kaizen will apply for Registration Certificate and Representative Certificate for the representative office with AIC. AIC will usually issue Registration Certificate and Representative Office within 10 – 15 working days after receiving all the required documentation. Once Registration Certificate is issued, the representative office is deemed to be duly organised and existing under PRC law and will have full operational rights to operate its activities in China within the scope of its Registration Certificate.

(3)    Post Registration Stage

(a)    Carving of Representative Office’s Seal and Chops

Application for approval for making of Office Stamp (Office Seal) with the Public Security Bureau and arranging the carving the company seal and chops.

(b)    Opening of Bank Account

Opening of one RMB basic account with the bank selected by client.

4.   Estimated Time Frame

It is estimated that the whole registration process would take around 4 to 6 weeks, subject to the schedule of the preparation of paperwork and also the approval by the various registration authorities. The table below shows the estimated time frame for each steps for the registration.

Step	Description	Who is Responsible	Working Days
Preliminary
1	Legalization of Incorporation Documents	Client/Kaizen	client’s schedule
2	Tenancy/Lease Agreement for the office to be used by the representative office	Client/Kaizen	client’s schedule
3	Other documents	Investor	Investor’s schedule
Application for Registration
4	Application for registration certificate	Kaizen	10
5	Application for representative certificate	Kaizen	5
Other Registration Procedures
6	Application for approval and carving of company seals	Kaizen	3
7	Opening of RMB basic account	Kaizen	10-15
Around 4 - 6 Weeks

5.   RO Compliance Requirements in Shanghai, China

Immediately after a representative office is officially registered in Shanghai, it is required to comply with various monthly, quarterly and annually filing and reporting requirements. These filing requirements include monthly tax filing, filing of annual audit report, which has to be issued and signed off by a local CPA firm, filing of annual tax reporting to the Shanghai State Administration of Taxation and filing of annual report to the business licensing bureau etc. In any case if any of these annual compliances are not handled in a timely manner, the representative office may subject to penalties or at the risk of getting their license suspended or cancelled by the AIC.

Kaizen is well equipped with experienced personnel and capable of providing all the services that your Shanghai representative office may need, including but not limited to monthly book-keeping, preparation of tax computation and filing of various tax returns and also performing annual tax clearance and etc.

See also:
Setting up a Representative Office in Shanghai - Procedures and Fees
Registration of a WFOE Branch in Shanghai - Procedures and Fees