Introduction

China has become the world’s most attractive foreign investment country. China is still the most potential international direct investment country in the world at present. It is also an important driving force for world economic development. The Chinese government also proposed to use foreign capital to participate in the reorganization of state-owned economy, to attract investment from multinational corporations, to cultivate the advantages of ownership of domestic enterprises, to speed up the implementation of “going out” and promoting the western region to attract foreign capital development policies.

According to China’s laws and regulations, the types of enterprises invested by current common foreign investors invest in the types of enterprises in mainland China are: foreign (regional) permanent representative of enterprises, wholly foreign-owned enterprises, and Sino-foreign joint ventures / cooperative enterprises.

General foreign investment into China will use the registered representative office (“RO”) as the first step to enter the Chinese mainland market to understand the operation of the local market, and explore future business and investment opportunities.

Most representative offices are limited to engaging in indirect activities such as contact with suppliers and customers, product promotion, and market research.

In addition, representative offices cannot hire local employees in the name of the representative office, import and export goods directly, and issue invoices.

Advantages of the Chinese Representative Office

• Being a good bridge for the purpose of investing in mainland China investors, to provide market research.
• Setting up a representative office means entering the market, gaining local liaison resources and understanding more about the market.
• Providing market penetration and resources for foreign investors to adjust their direct investment.
• Satisfying the requirement to start some industries, such as insurance and finance, require foreign investors to have a representative office in China for at least two years prior to direct investment.
• Finding suppliers and sales channels in China.

Requirements for Representative Office Registration

Where a foreign enterprise applies for the establishment of a representative office, it shall submit the following documents and materials to the registration authority:

• The representative office shall set up an application for registration;
• Certificate of domicile of a foreign enterprise and a legal business certificate that has survived for more than 2 years;
• Articles of association or organization agreements of foreign enterprises;
• Appointments of foreign enterprises to chief representatives and representatives;
• The identity certificate and resume of the chief representative and representative;
• Credit certificates issued by financial institutions with business transactions with foreign enterprises;
• Certificate of legal use of the representative office.

Name of the Representative Office in China

The name of the representative body shall consist of  the nationality of foreign enterprises, the Chinese name of the foreign enterprise, the name of the resident city and the “representative office” but do not contain the following text:

• Detrimental to China’s national security or social public interests;
• Names of international organizations;
• The law, administrative regulations or the provisions of the State Council prohibited.

Requirement of the Chief Representative

• The chief representative and the general representative shall be notarized by the notarial office of the country or region; and the competent authority of the foreign enterprise and be authenticated by the embassy or consulate of the People’s Republic of China in the country (or the host country).
• The chief representative and the general representative are Chinese nationals whose identity is not required to be certified.
• The letter of appointment of the chief representative and general representative must be certified by the embassy or consulate of the People’s Republic of China in the country (or the host country).