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Setup Procedure (1): Approval

Issuance of Approval Certificate

Establishment of a 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 RO in China and their employees are not allowed to engage in business activities in the capacity of employees of a 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:

(1) MOFTEC
(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 RO by foreign enterprises engaged in other businesses should be subject to approval by the government authorities in charge of those specific industries.

Each approval authority has its own requirements for documentation to be submitted for approval. According to Chinese law and practice, the following documents are usually required to be submitted to the approval authority for the establishment of Rep Offices in China:

(1) Application letter for establishing Rep Offices (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 Rep Office;
(iii) The purpose of the Rep Office;
(iv) The business scope of the Rep Office;
(v) The name of the chief representative;
(vi) The duration of the Rep Office; and
(vii) The address of the Rep Office.

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 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 located. 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 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 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 or a letter of intent of lease must be submitted to the approval authority.

Noted that not every building is allowed to lease offices to foreign companies as premises for ROs. 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 Rep Offices
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 RO to be established.

(7) Application Form for Personnel of Rep Offices
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 is a document evidencing the incorporation and registration of the foreign company. The specific format and content of the certificate of incorporation vary from country to country.

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 RO, the chief representative of the RO should pick up the Approval Certificate for the RO from the approval authority and handle the registrations procedures within 30 days after the approval date.