Corporate Formation in china

1. Set Up a Representative Office in Beijing China, Establishing Rep Office (RO) in Beijing, Beijing Rep Office Setup Procedures Beijing is the capital of the People's Republic of China. The municipality is under direct administration of China's Central Government. The city is the center of politics, culture, and international exchanges, as well as one of the largest metropolises of industry, finance and trade There are ten districts and eight counties under the jurisdiction of Beijing. There are Dongcheng, Xicheng, Chongwen, Xuanwu, Chaoyang, Haidian, Fengtai, Shijingshan, Mentougou and Fangshan Districts, as well as Changping, Shunyi, Tongxian, Daxing, Pinggu, Huairou, Miyun and Yanqing counties Currently, Beijing is the country's largest science and technological, and cultural hub. The region has more than 400 national research institutes. The Chinese Academy of Sciences and the Chinese Academy of Engineering Science has more than 400 academicians in Beijing. The city boasts more than 70 universities and colleges including the renowned Beijing University and Qinghua University Beijing features a solid industrial foundation and strong overall economic power. Since 1990, the GNP (gross national product) of the city has been steadily increasing at an annual rate of 11 %. In China, its overall economic power is next only to Shanghai Beijing is the location of the headquarters of the People's Bank of China, the central bank, as well as many other major financial and insurance institutions in China. The city plays a significant role in implementing the country's financial guidelines and policies, and in the decision-making and adjustment of the macro-economic policies. Consequently, the city has great attraction towards international capital and financial institutions. Beijing is also a Chinese city that attracts large amounts of investment from transnational corporations. In the recent years, more and more transnational groups

2. are choosing Beijing as the destination to establish Sino-foreign contractual joint ventures or their regional headquarters. Of the 270 transnational and world-renowned corporations that have invested in Beijing, 126 of them are among the world's top 500 industrial giants or service companies. So far, these companies have registered 5,600 representative offices in Beijing, representing more than 80 countries and regions, which is a first in China. All these have laid a solid foundation for the city's further opening up to the outside world. For more information about http://www.investbeijing.gov.cn/english/index.html, http://www.ebeijing.gov.cn Beijing, Please visit When investors have plans on establishing representative office in Beijing, it is better for them to acquire more information in order to run a successful business in Beijing China. An RO has no legal personality, meaning it does not possess the capacity for civil rights and conduct, cannot independently assume civil liability, and is limited in its hiring ability. Chinese staff working for an RO, although not limited in number, must be employed through a human resources agency that will sign a contract with the RO on the one hand and with the Chinese staff on the other in order to ensure social security and housing fund contributions are paid on a regular basis. No more than four foreign employees can be hired per RO. Foreign staff working for ROs should have an employment relationship with the parent company abroad, and any disputes should be settled under the laws of that country ROs are usually taxed on gross expenses with the overall tax burden around 11.75 percent of total monthly expenses; however, these rates may be increased by the relevant tax bureau according to the industry. If the chief representative is a foreign national, whether they stay in China or not, they shall be subject to individual tax based on the income derived from the RO.

3. Setting up a representative office in Beijing China primarily requires 4 stages and this entire process can take up till 2-5 months time. - Pre-approval Stage Once you have decided to base your representative office in which city, the next thing is to approach the local Ministry of Commerce (MOFCOM) for contacts of a local designated foreign enterprise service company (FESCO) who will be in charge of your representative office application process. You should be paying approximately US$800 to $1000 to a designated FESCO for their service of notifying you on the relevant upcoming deadlines and administrative procedures. In addition, a signed lease agreement is one of the pre-requisite for the approval; Therefore it is vital to secure a lease for a “grade A” office space before submitting the application. Stage 2 - Application Stage Generally your application approval should be done by MOFCOM, but if your industry is specific to banking, insurance, law, accounting and media, you may have to approach the relevant authority which has jurisdiction over your industry sector. Once approved, you should have the Certificate of Approval certifying your legal presence for the next 3 years which can be further extended. Stage 3 - Registration Stage This stage is to register for your representative office’s business license which must be renewed annually. It is important to note that you must complete the registration within 30 days of your approval from stage 2. The application together with the supporting documents is required to be submitted to the local State Administration of Industry & Commerce (SAIC and the process normally takes about 1-2 months time. Stage 4 - Post Registration Procedure Firstly, In China, it is expected for your representative office to register the office location with the local police (Public Security Bureau) and to register with local and

4. national tax bureaus. Secondly, you should make financial and corporate seals as it is a practise in China to use them on official documents. Thirdly, opening a foreign exchange bank account will aid to facilitate overseas fund transfer. Fourthly, to import the relevant equipments or materials, remember to complete the relevant customs registration. Lastly, get a FESCO to assist you in recruiting of Chinese staff. Once all this is done, your representative office is set to establish its presence in China. However before getting to this stage, a good market research study is required to ensure that your products or services are viable in the Chinese market. 1 A representative office may, however, negotiate contracts that are later signed in the name of the home office located outside China. 2 The application letter should contain, in part, the following: a description of the company’s history, business and scope; the names of the Chairman of the Board, the General Manager and directors; the names of its major trading partners in China; its business volume; the proposed name of the representative office; the purpose for setting up the representative office and the scope of its activities; the duration of the office and its chief representative. 3 Head office incorporation documents include certified copies of the company’s business registration certificate, the certificate of incorporation, the memoranda and articles of association, etc. 4 Other post registration formalities include: registering with the tax bureau; opening a bank account; completing a residence application with the with the local Public Security Bureau; applying to the Customs Administration for permission to import office equipment and daily necessities for use by the representative office and its personnel; appointing a FESCO to recruit local Chinese employees; etc. Set Up a Representative Office in Beijing is a big project by itself, which requires financial and time commitments, business management knowledge and China

5. expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls Since 2006, Tommy China Business Consulting has been focusing on consulting services for our clients to Setting up a Representative Office (RO) in Beijing. Please visit http://www.tommyconsulting.com/CorporateFormation.html Email: tomlee@tommyconsulting.com, Skype: tomleeli WhatSapp/Wechat/Cell Phone: +86 18926401128