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Foreign Company Shanghai RO Registration Procedures and Fees

The Representative Office (RO) is one of the common business vehicles through which a foreign company can establish their first presence in China (PRC). A China Representative Office is not an independent PRC legal entity, but rather a liaison office between the headquarters of the foreign enterprise overseas and Chinese government agencies, trade organizations and prospective Chinese business partners. The parent enterprise will be legally responsible for the activities of its representative office.  

1.       Features of Representative Office

(1)     Legal status of a RO

A Representative office (RO) is an extended arm of a foreign company in China. It is not a separate legal entity but a liaison office of a foreign company in China. Since the RO is not a separate legal entity, it does not assume liability on its own. Rather, the foreign parent company assumes the liability of the RO.

(2)     Scope of Business

Representative offices in the PRC in general can only engage in non-profit-making activities. Pursuant to Article 14 of the Regulations, a representative office may engage in the following activities relating to the foreign enterprise’s business:

(i)     market survey, exhibition and publicity activities relating to the foreign enterprise’s products or services; and

(ii)    liaison activities relating to the foreign enterprise’s product sales, service provision, domestic procurement and domestic investment.

(3)     Name of the RO

The name of the RO should be in the form of “Name of Country where the investor is registered + Name of the Enterprise + Name of the City + Representative Office”.

Example: Hong Kong Kaizen Certified Public Accountants Limited Shanghai Representative Office

(4)     Business Address

Before submitting the application for the registration of the RO, it is required that an office premise which is to be used by the RO by taken and a tenancy agreement for that office premise be executed. The tenancy agreement is one of the documents to be submitted to the Shanghai Administrative Bureau of Industry and Commerce for the purpose of registration.

Please note the business address must be located in commercial buildings approved by the local Chinese government and it must be located in a building that is specifically allowed to be for business purpose by foreign enterprise.

(5)     Recruitment of Chinese employee(s)

An RO shall entrust a local labour services agency for foreigners or other service units designated by the Chinese Government to recruit and employ Chinese personnel in accordance with laws and regulations of the PRC.

Typically, an RO will sign a "contract for service" agreement with the local service unit. Under such service contract the local service unit agrees to provide, and the RO agrees to pay for employee hiring services and for administering the employment relationship. After the establishment of the employment relationship, the local service unit will handle on a monthly basis the employee's mandatory contributions to the social insurance plan. The local service unit also administers the employees' personal file, and may handle such other administrative employment matters as may be entrusted by the RO.

2.       Pre-registration and Registration Procedures

2.1    Preliminary

(1)     Lease of Office Space

Firstly, the investor will have to enter into a tenancy agreement in relation to the office space to be used by the WFOE for a term of not less than 12 months. The office must be located in a commercial building.

(2)     Legalisation of Identity Documents and Articles of Association or Organization Agreement of the Shareholder/Member

The investor is required to arrange to have the identity documents and articles of association or organization agreement of the shareholder legalised by the Chinese Embassy in the country where the shareholder/member is registered/resided.

(3)     Legalisation of Bankers’ Reference Letter

Also, the investor needs to arrange with its banker to issue a bankers’ reference letter and then let it be legalised. The Legalisation of bankers’ reference letter is one of the documents to be submitted for the purpose of registration.

 (4)    Legalisation of the appointment letter and identity document of the Legal Representative and General Representative

The investor is required to arrange to have appointment letter and identity document of the chief representative and general representative legalised by the Chinese Embassy in the country where the shareholder/member is registered/resided.

(5)     Legalisation of the authorized document of the authorized signatory of the Shareholder/Member

The investor is required to issue the authorized document that authorized the signatory to sign the documents referring to the proposed RO in Shanghai, and then let it be legalised by the Chinese Embassy in the country where the shareholder/member is registered/resided.

(6)     Other Documents

The investor at the same time needs to prepare other documents, such as pictures and resumes of chief Representative and general representative.

2.2    Application for Registration

(1)     Application for Registration Certificate

The registration of a RO in Shanghai starts with the submission of application documents to Shanghai Administrative Bureau of Industry and Commerce to apply for registration certificate. In most of the circumstances, the Shanghai Administrative Bureau of Industry and Commerce will issue the Certificate of Registration in 10 working days after receipt of application documents.

Once the Certificate of Registration is issued, the RO is deemed to be legally established and will have full operational rights to operate in accordance with the business scope stated in the registration certificate.

(2)     Application Representative Certificate

The RO apply for Representative Certificate for its chief representative and general representative to Shanghai Administrative Bureau of Industry and Commerce;

(3)     The RO apply for Seals Carving Approval to Shanghai Municipal Police

Office for graving of common seals and order the carving of common seal with designated seal carving company;

(4)             Establishment of Corporate Bank Account

        The RO apply to open a RMB basic account with a bank of its own choice.

                   (5)    Application of online banking

The RO apply to open online banking and other account functions after bank account opened.

3.      Documents Required for Application

The following information and documents are required for the registration of a representative office in Shanghai, China:

(1)     A set of Legalised Identity Documents

A set of legalised (by Chinese Embassy or Consulate in the country where the applicant company is registered) incorporation documents (Certificate of Incorporation and/or Business Registration Certificate, articles of association) of the foreign company.

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

(2)     Legalised Banker’s Reference Letter

A legalised banker’s reference letter issued in the name of the investor and addressed to Shanghai Administrative Bureau of Industry and Commerce. The reference letter shall indicate the name and account number of the investor and the balance of the account or average daily balance over the last 6 months;

(3)     Legalised Power of Attorney (Authorisation)

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

(4)     Legalised Power of Attorney (Appointment of Chief Representative)

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

(5)     Lease Agreement

A set of original Lease Agreement of the office premise to be used by the RO; The lease term should not be less than 12 months. Please note that the Lease Agreement shall be signed by the investor or the proposed RO. Photocopy of the property ownership certificate of the premise and the identity certificate of the owner (i.e. certificate of enterprise code for corporate owner or identity card of individual owner) shall be provided as well;

(6)     Brief Company Profile

A brief summary of the operations and business of the investor, such as the principal business activities, registered address, contact phone number, name of the applicant company; the address and contact number of the managing director of the applicant company;

 (7)    Particulars of the Chief Representative

A copy of resume, 2 pictures, passport copy, contact number of the Chief Representative and the address where the Chief Representative will be staying while she/he is in China;

(8)     Particulars of the General Representative

If there is/are General Representative(s) to be stationed in China in addition to the Chief Representative, the resume, 2 pictures, passport copy, contact number and the address where the Representative will be staying while she/he is in China shall be provided as well. Please note it there are at most three General Representative to be stationed in China;

(9)     Preferred Banker

The name and address of your favourite opening bank for the RO. Please be noted that the original passport of the Chief Representative of the RO shall be presented to the bank for verification purpose.

4.       Time Frame

The table below shows the time frame for each step for the registration process.

Note:

(1)     The time frame of 6 to 8 weeks started from the time we receive the duly signed registration application documents.

(2)     If the foreign company is a company registered in Hong Kong, Macau, Singapore and Mainland China, then we can also handle the legalisation of documents. Our fees will be quoted upon request. We might also be able to handle the legalisation for company incorporated in other places. Please contact Kaizen and find out the details.

(3)     At the time of opening bank account for the representative office, the physical presence of the physical presence in China is required.

5.       Registration Costs

(1)     Registration Fees and Costs

(a)     Registration Services Fees

Our fees for handling the registration of a Representative Office in Shanghai for a foreign company is HKD12,000 (business tax at 6.78% is applicable if China tax certificate is required).

(b)     Translation Costs

Our service charges stated above do not cover the translation costs for translating the documents prepared by you from English to Chinese. The cost for translation is HKD350 per page of A4 size. We will arrange the translation on your behalf and the translation cost will be billed separately with supporting official tax receipt issued by third party translating company.

(c)     Official Filing Fees

In addition, the above costs do not cover any official registration fees and filing fees of around HKD2,500.

(g)     Legalisation Fees

Our fees quoted above do not cover the legalisation of the identity documents of the shareholder/member. As required by the regulations, the identity documents of the shareholder/member are required to be legalised by the Chinese Embassy in the country where the shareholder/member is registered/resided. 

(2)    Summary of Registration Costs

A summary of costs related to the registration of the proposed RO in Shanghai is listed in the table below:

(3)    Payment Terms

Upon receipt of your order, we will issue an invoice to you for your settlement. We require full payment in advance.

If China or Taiwan official tax invoice is required, Value-Added Tax or Business Tax at the prevailing rate in the respective jurisdiction will be charged.

We currently only accept Hong Kong Dollar check, cash or TT and credit card through Paypal.

6.       Certificates and Materials obtained after Registration

After the RO in Shanghai, China is officially registered, it will obtain the following certificates, corporate documents and seals to prove its legal existence and to carry out its daily operation.

(1)     Registration Certificate

(2)     Chief Representative Certificate  

(3)     Company Seal

(4)     Finance Seal

(5)     Legal Representative Seal

(6)     Bank Account Opening Permission

(7)     Tokens for Online Banking    

7.       Going Forward

          Once you decide to proceed to registration and decided to engage us, then:

(1)     We will sign an engagement letter with you;

(2)     You start preparing the documents listed in Section 3;

(3)     We prepare the registration application forms and send you for your signatures;

(4)     You return the duly signed registration application documents to us together with the documents listed in Section 3;

(5)     We submit the documents to the government departments concerned for the application for various certificates and registration as stated in Section 4;

(6)     Registration completed and official registration certificates delivered to you.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

Tel: +852 2341 1444

Mobile: +852 5616 4140, +86 152 1943 4614

WhatsApp/ Line/ Wechat: +852 5616 4140

Skype: kaizencpa

Email: info@kaizencpa.com