Procedures and Documents
Procedures and Documents for Representative Office
Documents Required
The documents required for setting up a RO are listed below:
| No. |
Documents |
| (1) |
Business licenses or business registration certificate, or any other documents of the same nature; |
| (2) |
Certificates of Incorporation or any other documents of the same nature; |
| (3) |
Articles of Organisation (applicable to company registered in USA, Memorandum and Articles of Association (applicable to companies registered in Hong Kong), or any other documents of the same nature; |
| (4) |
Bankers' reference letter for the foreign investors. The bankers' reference letter should state clearing the average daily balance for a period of not less than 6 months and shows a 6-digit bank balance; |
| (5) |
Copies of passport (applicable to foreign resident); Hong Kong identity card and China entry permit (applicable to Hong Kong resident) of all representatives and 4 photos of the chief representative; |
| (6) |
Original copy of lease agreement and title deed; |
| (7) |
Documents evidencing the details of shareholders and directors for investors (e.g. Annual Return for a Hong Kong company); |
| (8) |
Appointment letters, passport copy, photos, resume of the chief representative; |
| (9) |
Minutes of Board Meeting to authorize Chief Representative, Minutes of Board Meeting to setup RO; |
| (10) |
Latest Annual Return (applicable to companies registered in Hong Kong), or any documents listing existing officers of the applicant company; and |
| (11) |
Latest tax return or Notice of Assessment, or other documents evidencing payment of taxes; |
Setup Procedures
According to current regulations, when applying for the establishment of a representative office, a foreign enterprise cannot directly file their application. In stead, the applicant must entrust a local Applicant Agent as sponsor to carry out application procedures. The sponsor should, on behalf of the foreign enterprise, submit various application documents and information to the respective examination and approval authorities; to proceed with the application procedures and to renew the registration certificate.
The approval authorities will vary according to the trade and business in which the foreign enterprise is involved. The Application Agent is also responsible for representing the foreign enterprise in registering at the public security bureau, customs authority, tax bureau and to open a bank account.
Please click here to read the detailed application procedures and documents required.
Representative Office Formation Costs
Advantages and disadvantages
Advantages
(1) The capital required is at a low of US$12,050 (RMB100,000), compared to US$120,050 for a Wholly Foreign Owned Enterprise;
(2) It can perform most of the back office functions, such as market research, sourcing, project investigation for parent company.
Disadvantages
(1) The activities which can be performed by a RO are limited. It is not allowed to provide services and sell goods.
(2) Local staff should be hired via government admitted agents.
(3) Although a RO is not allowed to provide services and sell goods, it is still liable to tax liability in the basis of expenses incurred.
Matters of Interest
| No. |
Matters of Interest |
| (1) |
The whole process can be completed at around one month; |
| (2) |
A Chief Representative has to be appointed; |
| (3) |
The company applying for setting up RO has to be at least 1 year old; |
| (4) |
Company should be able to present bankers' reference letter showing 6- digit (in HK$ terms) average daily balance for a period of not less than six months; |
| (5) |
A tenancy agreement (or ownership document) for office premise which is valid for foreign investor use. The term should be at least 12 month long; |
| (6) |
In case the rental agreement is not signed by the Chief Representative, this can be ratified by a Letter of Authorization; |
| (7) |
RO license has to be applied again once permit is expired. Maximum 3 years approval will be granted and depends on rental lease terms; |
| (8) |
The tax filing has to be done on monthly, quarterly and annual basis. Moreover, there are statutory audit on the expenses account and foreign currency bank account; |
| (9) |
A budget of not less than US$1500 should be made for those accounting, tax filing and audit work for a single staff RO, depending on the location of office premises. |
Representative Office Formation Costs
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