Set Up a Representative Office in Shenzhen China, Establishing Representative Office (RO) in Shenzhen

Shenzhen is the second largest city in Guangdong province, a regional manufacturing and financial hub and one of the richest cities in China. The city, originally a village north of Hong Kong, was first developed as a special economic zone when economic reforms were introduced in the late 1970s. After over 30 years of sprawling, it has become one of China's top four first-tier cities along with Shanghai, Beijing and Guangzhou. With a population of over 20 million, the city's GDP grew 10% to RMB1.3 trillion in 2012. The Shenzhen Stock Exchanges, one of the only two on the mainland, focuses on small and midsized companies as compared to Shanghai's where larger state-owned companies are traded. With sound infrastructure and easily recruited many talented personnel in Shenzhen, Foreign company can take this advantage to set up company in Shenzhen as china market entry strategies

 

 

When investors have plans on establishing representative office in Shenzhen, it is better for them to acquire more information in order to run a successful business in Shenzhen. Setting up a representative office is the most inexpensive entry form for foreign enterprises to enter the Chinese market. And about 20% of investing clients have chosen Representative Office as their Shenzhen business entity since setting up a representative office is cost efficient and it requires no capital investment. A representative office basically is to serve as a liaison office between a foreign company and its business partners in Shenzhen, and to coordinate the parent enterprise activities in Shenzhen (travel arrangements, promotion etc.). 

 

Representative offices are applicable for many industries: trading, shipping, consulting, etc. 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 + Shenzhen Representative Office.

 

Shenzhen Representative Office Setup-Procedures
Preparing all the needed documents→ fill out the application form→ sign the agreement with TCBC→ pay for the services→ submit all the needed documents→ name reservation→ apply for the business license and work card→ go to the public security bureau for stamp-make→ apply for Organization Code License & card→ apply for Setup license of the Local & National Taxation Bureau.

 

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. 

Set Up a Representative Office in Shenzhen 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

 

Contact Tom Lee now for setting up Representative Office in shenzhen

Email: tomlee@tommyconsulting.com, tomlee_cn@163.com,
WhatSapp/Wechat/Cell Phone: +86 18926401128, Skype: tomleeli
Tel: 86-755-25809219,Fax: 86-755-83256658