China Permanent Representative Office
The procedures for establishing a Resident Permanent Representative Office (RO) vary slightly in different areas of China and also vary in accordance with the places where the foreign companies are located. In general, the procedures for the establishment of a Permanent Representative Office consist of three steps:
Step 1: Examination and Approval
A whole set of application documents are submitted to relevant approval authorities for examination. This step is completed when the approval authority issues an Approval Certificate for Permanent Representative Offices of Foreign Enterprises.
Step 2: Registration
After the foreign enterprise obtains approval from the relevant authority, documents must be submitted to the relevant AIC for registration of the Permanent Representative Office. This step is completed when the AIC issues a Registration Certificate for Permanent Representative Offices of Foreign Enterprises.
Step 3: Post-establishment Registrations
After a Permanent Representative Office (RO) is registered with the AIC, it must handle registration and other procedures with banks, customs office, tax authorities, public security bureau and other authorities.
Examination and Approval Phase
Establishment of a Permanent Representative Office (RO) is subject to approval by relevant authorities under Chinese law. Without such approval and proper registration, foreign enterprises are not allowed to set up Representative Office (RO) in China and their employees are not allowed to engage in business activities in the capacity of employees of a Resident Representative Office (RO). Furthermore, no signs or name plates of the foreign enterprise should be posted outside their office premises. The approval authorities vary depending on the business the applying foreign enterprise is engaged in. The following is a list of the approval authorities:
(2) The People's Bank of China
(3) The China Insurance Supervision Commission ("CISC")
(4) Ministry of Communication
(5) The China Administration of Civil Aviation
(6) Tourist Bureau of the PRC
(7) The Ministry of Finance
(8) The SAIC
(9) The Ministry of Justice
Except for the above approval authorities, the establishment of Resident Representative Office (RO) by foreign enterprises engaged in other businesses should be subject to approval by the government authorities in charge of those specific industries.
Documents and Information Required
Each approval authority has its own requirements for the documents to be submitted for examination and approval. According to Chinese law and in practice, the following documents are usually required to be submitted to the approval authority:
(1) Application letter for establishing Representative Office (RO) (original)
The application letter should briefly describe the foreign company and its business activities in China. The following information must be addressed in the application letter:
(i) An introduction to the foreign company and its business activities in China;
(ii) The name of the Resident Representative Office (RO);
(iii) The purpose of the Resident Representative Office (RO);
(iv) The business scope of the Resident Representative Office (RO);
(v) The name of the chief representative;
(vi) The duration of the Resident Representative Office (RO); and
(vii) The address of the Resident Representative Office (RO).
The application letter should also include a list of the documents to be submitted. If the foreign enterprise believes that any documents other than those requested by the approval authority should be submitted, such additional documents should also be listed in the application letter.
(2) The bank creditworthiness letter (original)
The creditworthiness letter (also known as bankers' reference letter) should be issued by the banker of the foreign enterprise. The bank must be a foreign bank in the area where the foreign company is registered. The creditworthiness letter must contain the following information:
(i) The name of the foreign company;
(ii) The normal deposit amount or average daily balance for a period of six months; and
(iii) A brief review of the creditworthiness of the foreign company.
The bank letter should be printed on the letterhead paper of the bank and signed by authorized officials of that bank.
(3) The appointment letter for the Chief Representative
The appointment letter should be concise. It should state clearly the name of the person to be appointed or authorised to act as the chief representative of the Resident Representative Office (RO). The appointment letter should be printed on the letterhead paper signed by the chairperson, general manager or other responsible officials of the foreign company.
(4) The resumes, photocopies of the passports and passport size photos of the chief representative and other representatives.
It is required that the resume start from the university education. The date on which the person started working for the applying foreign company should also be stated in the resume. It should be noted that the time as described in the resume must be consecutive. The resume must be signed by the chief representative and could be printed on blank paper.
(5) Office Lease
A signed office lease agreement (tenancy agreement) or a letter of intent of lease must be submitted to the approval authority.
Noted that not every building could be used as office premises by the Resident Representative Office (RO). Only those buildings approved by the local public security bureau may be leased to foreign companies. Foreign companies should confirm this issue with the landlord before entering into the lease agreement or the intention letter.
(6) Application Form for the Establishment of Resident Representative Office (RO)
The application form is a standard form printed by the approval authority. The main content of the application form is basic information concerning the foreign company applicant and the Representative Office (RO) to be established.
(7) Application Form for Personnel of Representative Office (RO)
This application form is a standard form printed by the approval authority. The main content of the application form is basic information regarding the staff and employees of the RO to be established, such as the names, nationalities, contact details and positions.
(8) The Certificate of Incorporation of the Foreign Company
The certificate of incorporation (or Article of Organisation or Article of Incorporation) is a document evidencing the incorporation and registration of the foreign company.
If the foregoing documents are in a foreign language, a Chinese translation should be prepared. Some approval authorities require that some of the foregoing documents be notarized by a foreign notary public and then legalized by the PRC consulate in that foreign country.
After the above documents are submitted to the approval authority, the approval authority will review the application documents. After the approval authority approves the establishment of the Representative Office (RO), the chief representative of the Representative Office (RO) should collect the Approval Certificate from the approval authority and handle the registrations procedures within 30 days after the approval date.
After the approval for the establishment of RO is granted, registration procedures must be handled with the AIC. The following documents must be submitted to the AIC for registration of a RO:
(1) The Approval Certificate issued by the approval authority;
(2) The standard Application Form for Registration of ROs printed by the AIC;
(3) The standard Registration Form for the Personnel of ROs printed by the AIC;
(4) The Application Letter for Establishment of Rep Offices;
(5) The Certificate of Incorporation of the foreign enterprise;
(6) A bank letter regarding the creditworthiness of the foreign enterprise;
(7) Appointment Letter for the Chief Representative;
(8) Resume of the chief representative and other representatives;
(9) Photocopies of passports or ID Cards of foreign employees of the RO;
(10) Lease Agreement or other documents for the office of the RO; and
(11) Photos of the chief representative.
The format and content of the above documents are similar to those documents submitted to the approval authority. It should be noted that AlCs in different locations might have different requirements for the application documents that a foreign enterprise must submit. When a foreign enterprise applies for registration of a RO, the foreign enterprise should consult with the local sponsor, law firms or other agents as to the specific documentation requirements.
After the registration authority approves the registration of a RO, it will issue a Registration Certificate for the RO and issue Representative Cards to the Chinese and foreign employees. The establishment date for a Rep Office is the issuance date of the Registration Certificate rather than the issuance date of the Approval Certificate.
After the issuance of the representative office registration certificate , the following procedures should be handled:
Application for an organization code and card;
Application for opening a bank account;
Customs formalities for import of office equipment;
Tax registration procedures with the state and local taxation authorities;
Procedures for employing Chinese employees with the foreign service companies designated by the State Council or local people's government;
Application for expatriate work permits with the local labour authority; and
Application for expatriate residence permits with the local public security bureau.
After the above procedures are completed, any changes should be registered with the registration authority as well.