When interested in conducting business in mainland China, you should know that we can help with four different solutions out there. From all of our customers, WFOE (Wholly Foreign Owned Enterprise) is the most popular one – up to 65%. RO (Chinese rep office formation) is the second, with up to 20%. FIPE (10%) and joint ventures (5%) are worth a little attention too.
Over the past few years, Chinese rep office setup has gained a huge notoriety. Why? Simple! There are two main reasons. First, it is extremely cost efficient. Second, it does not require a huge starting capital. It does pay off to read more about why you should or should not setup rep office in China though. Got any questions? Need a hand? This is what we are here for!
One of the main rules in rep office formation asks for the parent company to be at least two years old. If it is established for less than that, the office setup application will be rejected right away.
Other than that, we can only establish the office according to the permitted activities in China. Relate to liaisons, quality control, research studies, technology exchange and so on. Just make sure that you do not attempt to setup rep office in China based on forbidden activities, hence the necessity of a little education. Finally, rep offices are not allowed in operational activities and cannot receive payments or issue invoices.
Simply put, if you opt for rep office formation, you can do specific things, but you cannot do other things. What things does the Chinese regulation talk about? The office setup will allow you to engage in nonprofit activities. For instance, your office can perform market research and surveys for the parent company, but you can also liaise with all kinds of companies in China. Feel free to provide promotional materials to potential clients, yet you can also become a main coordinator for the main activities of the parent enterprise.
Those who choose us to setup their office in China can do a lot of things on behalf of the parent company, but they are still legally limited. For example, the Chinese rep office formation allows you to come up with travel arrangements for both potential clients and enterprise managers, but you are not engaged in any profitable business operations – at least not directly. Those who setup the office need to know what profit and nonprofit truly means by the Chinese laws. However, if you decide to work with us for this procedure, you will be taken through all these rules.
Office formation does not allow you to sign any contracts or come up with specific deals on behalf of the company. You cannot represent other firms either, so you are strictly connected to the parent enterprise. Interested in issuing invoices? How about collecting money? None of these things are allowed after the rep office setup. The same rule applies to buying properties or importing specific equipment.
In conclusion, there are a lot of people wherefore choosing to setup rep office in China is the best deal ever. Make sure that you thoroughly understand the benefits and requirements before making a final decision. Let us handle this task for you and you can consider it done. Instead, focus on what really matters to you – the running plan for your business.