Malaysia Hotline: +603- 2141 8908
A
representative office is an office established by a company to conduct
marketing and other non-transactional operations, generally in a foreign
country where a branch office or subsidiary is not warranted. Representative
offices are generally easier to establish than a branch or subsidiary, as they
are not used for actual "business" (e.g. sales) and therefore there
is less incentive for them to be regulated.
Functions of China Representative
Office
1. It
can handle market research, sourcing, project investigation, quality control
for parent company, liaison with customers and suppliers
2. It
cannot enter into purchase/sales contracts and receive payment for services,
issue invoices.
3. A RO
can open bank accounts and employ staff for above- mentioned purposes.
4. Apply
for work permit and residence permit.
5. A RO
is still subject to tax liability, so monthly tax return should be carried out
regularly.
6. If a
RO is set up in Shanghai, it is qualified to get a car without entrance tax.
Process of China Representative
Office set up
Business Follow Up of China
Representative Office （RO）
TANNET
can provide a series of business follow-up services such as transfer RO to
WFOE, monthly bookkeeping and tax return, annual return services, internal
auditing, financial planning and tax layout, China policy & market study.
Other services include domain name registration, webpage design, website
promotion, China trademark registration, Work Permit, Residence Permit, etc. in
order to pave a smoother and wider way for your China business success.
Taxation for China Representative
Office （RO）
Although
a RO is not to conduct business, it attracts tax as stated below:
1.
Individual Income Tax (IIT)
IIT
stands for Individual Income Tax which rates from 5% to 45% based on salary
income exceeding more than RMB2000 for local employee and RMB 4800 for overseas
employee. All the RO staff is subject to IIT if his income exceeds the limit.
IIT is calculated according to such a formula: IIT= (income- limit)* rate.
2.
Business Tax (BT)
BT
stands for business tax which is based on monthly business operational expense,
the rough rate is 5% based on your expenses. It is calculated according to the
formula like this: BT= expenses/ (1-15%) ×5%.
3.
Enterprise Income Tax (EIT)
EIT
stands for enterprise income tax which is based on quarterly business
operational expenses, the rate is 25%. It is calculated according to the
formula: EIT = expenses/ (1-15%) ×10%×25%.
Advantages of China
Representative Office (RO)
Using a
representative office as China entry form has the following advantages:
1.
Affordable: no paid capital required, government and service fees are usually
lower than what is needed for WFOEs.
2.
Quicker registration process (usually within one month or so)
3. Less
paperwork required for application (compared to wholly foreign owned
enterprises)
China
Representative Office （RO）is a good way for foreign
investors since no paid up capital and the easy process. Tannet could assist
the investors to set up the Foreign Invested Partnership Enterprise (FIPE),
Wholly Foreign Owned Enterprise (WFOE), Joint venture (JV) and so on.
Contact
us
If
you have further queries, please contact Tannet
24
hours Malaysia hotline：603-21418908;
24
hours Hong Kong hotline：852-27837818;
24
hours Hong Kong hotline：86-755-
36990589;
Email:
mytannet@gmail.com