SHANGHAI CHINA (RO) company:

THE GUIDE TO INCORPORATE REPRESENTATIVE OFFICE IN SHANGHAI

OVERVIEW ABOUT SHANGHAI
Shanghai is an international finance metropolis of world. Its highly developed finance, trade, travel, fields such as shipping, information, real estate catch up with the world standard day by day. The complete legal system, in accord with the market rule of the international practice builds a fine investment environment for Shanghai day by day. If you can take full advantage of good opportunity of Shanghai and jump onto this block of large platforms, you will get more extensive development space.
Characteristic of establishing representative offices in shanghai (RO)
Representative offices (RO) are established by foreign companies to engage in business liaison. Production promotion, market research, exchange of technology and other permitted activities in China (AIC)
ROS are not allowed to directly engage in operational activities. The AIC usually specifies in the business scope .as shown in the business license of RO. That a RO should not engage in direct operational activities therefore RO is not a form of foreign investment in China.
However, some RO are engaged in operations in a lawful or tacitly permitted way and constitute one of the direction foreign investment forms in china.
In practice, many RO that are established by foreign consulting companies directly engage in consulting activities. Chinese government does not prohibit them in practice and this is reflected by the fact that the tax authorities collect business tax from these ROS.
The lawful operational activities engaged in by RO refer to those business activities permitted pursuant to the bilateral treaties between China and other countries. In the event that a bilateral treaty provides that certain types of RO are permitted to engage in operational activities, these bilateral treaties should prevail over Chinese domestic.
The representative office can’t work in the following activities:
◆Direct engage in any business for profit;
◆ Sign contracts or deals on behalf of the parent company;
◆ Represent any firm other than its parent company;
◆ Collect money or invoice organizations or individuals within China for services or products;
◆ Buy property or import production equipment.

BUSINESS SCOPE
It is of key importance to note that a representative office (RO) is not a separate legal entity. Rather, it is an extension of its parent company. A representative office may only engage in non-profit making activities.
It is free to carry out the following functions:
Conduct research and survey for its general company in the local market;
◆ Liaise with local and foreign contacts in China on behalf of the general company;
◆ Conduct research and provide data and promotional materials to potential clients or trading partners;
◆Act as a coordinator for the general company's activities in China;
◆Make travel arrangements for general company representatives and potential Chinese clients;
◆ Other non-direct profit making business activities;
APPLICATION PROCEDURES:
Foreign companies are not allowed to directly submit the application documents to the relevant authority. They must retain a PRC entity that is authorized or permitted by relevant authorities to act as a sponsor. The sponsor will submit all documents to the examination and approval authority on behalf of the foreign enterprise.
After the foreign enterprise obtains approval from the relevantauthority, documents must be submitted to the relevant AIC for registration of the RO. This step is completed when the AIC issues a RegistrationCertificate for Representative Offices of Foreign Enterprises. Aftera RO is registered with the AIC, it must handle registration andother procedures with banks, customs office, tax authorities, and other authorities.
Step 1: Register in Shanghai Industry and Commerce Authority
Step 2: Apply for the Representative Office's seals and chops
Step 3: Apply for the Organization Code License
Step 4: Register in Shanghai Statistical Bureau
Step 5: Open the bank account of the Representative Office
Step 6: Register in Shanghai Taxation Bureau
Step 7: Physical Examination and Obtain Health Certificate
Step 8: Apply for the Working Permit for the Chief Representative
Step 9: Apply for the Residence permit for Chief Representative
Step10: Register in Shanghai Custom
Required documents:
Foreign enterprises apply to establish resident representative office;following documents are requested to provide:
◆Application letter for establishing RO (original)
the application letter should briefly describe the foreign company and introduce its business activities in China. The following information must be addressed in the application letter:
An introduction to the foreign company and its business activities inChina;
The name of the RO;
The purpose of the RO;
The business scope of the RO;
The name of the chief representative;
The duration of the RO;
The address of the RO.
The application letter should also include a list of the documents tobe submitted. If the foreign enterprise believes that any documentsother than those requested by the approval authority should be submitted, such additional documents should also be listed in the application letter.

(i) The name of the foreign company;
(ii) The normal deposit amount or average daily balance for a period of six months or  one year:
(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.
◆ 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 authorized to act as the chief representative of the RO. The appointment letter should be printed on the letterhead paper signed by the chairman. general manager or other responsible officials of the foreign company of the foreign company.

◆ The resumes, photocopies of the passports and passport size photos of the chief representative and other representatives.
It is required that the resume starts 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.
◆ One company constitution (copy)
◆ Contract of rent or purchase office location (copy).
Certificate of residence for office location issued by leaser (original)
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.
◆ Application Form for the Establishment of 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 ROS to be established.
◆ Application Form for Personnel of 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.
◆ 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.
◆ Company brief introduction
◆ Provide other application material which is defined as necessary by the examination and approval authorities.
ATTENTION:
A. The application, the certificate of entrustment, the certificate of authority and the resume of the authorized should be written on the official letter paper of the enterprise, and affixed with seal and signed by the chairman of the board or the general manager of the enterprise.
B. The copy of the business license should be signed by the chief of the company and also be stamped.
C. The certificate of capital credit issued by the bank should by affixed seal and signed by the chief of the bank.
D. As to the chief representative, his or her passport or the home-return card for compatriot is needed.