Representative Office in China
What does it mean to have a representative office (RO) set up in China? ROs are a way that foreign enterprises are able to set up a separate entity in China, both quickly and easily. Setting up an RO means that this office may be involved in business activities, however not as a separate legal entity. ROs are not able to operate as partnerships, sole proprietorships and are also unable to engage in profit making activities. They act as the representative in China for the foreign company. Establishing a RO in China can be a way for foreign enterprises to promote their company in China and to co-ordinate the foreign company’s activities in China. Furthermore, an RO may be used to test the market or to undertake research in China. Benefits of establishing an RO:
- They are quick, easy and relatively inexpensive to set up.
- You don’t need to have registered capital.
- ROs are easier to control than other types of business enterprise.