Set Up a Representative Office in Chongqing China, Establishing Representative Office (RO) in Chongqing

As located at the geometrical center of China, Chongqing has become a transportation hub on the upper reaches of Yangtze River. Chongqing extends its highway in all directions; Chongqing Jiangbei International Airport, one of the top ten airports in China, and the largest port on the upper reaches of the Yangtze River are both located in Chongqing. The completed Three Gorges Project improves the navigation capacity. Through the golden waterway, Chongqing is directly linked to the rivers and seas.

Once an old industrial base, Chongqing has rapidly emerged as one of the fastest growing and fastest urbanising cities in China and, according to some reports, the world. Located in China’s west, the municipality of Chongqing boasts a population of over 30 million (one of the largest in China) and a GDP growth rate of 11% year on year (also one of the fastest of China). It is also the centre of China’s ‘Go West’ Strategy which has created a unique business and investment environment for foreign companies. Despite its profile, Chongqing still remains largely unknown to the West who often look to Beijing and Shanghai when entering the China market. For foreign companies wanting to launch into the China market, we believe that Chongqing should be there next destination. 

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When investors have plans on establishing representative office in Chongqing , it is better for them to acquire more information in order to run a successful business in Chongqing . Setting up a representative office is the most inexpensive entry form for foreign enterprises to enter the Chinese market. And about 20% of investing clients have chosen Representative Office as their Chongqing business entity since setting up a representative office is cost efficient and it requires no capital investment. A representative office basically is to serve as a liaison office between a foreign company and its business partners in Chongqing , and to coordinate the parent enterprise activities in Chongqing  (travel arrangements, promotion etc.). 

Representative offices are applicable for many industries: trading, shipping, consulting, etc. The Chinese government has a name format for anyone who wants to setup a representative office (RO) in China, the format is: country (area) + parent company name +Chongqing  Representative Office.

Chongqing Representative Office Setup-Procedures
Preparing all the needed documents→ fill out the application form→ sign the agreement with TCBC→ pay for the services→ submit all the needed documents→ name reservation→ apply for the business license and work card→ go to the public security bureau for stamp-make→ apply for Organization Code License & card→ apply for Setup license of the Local & National Taxation Bureau.

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. 

Set Up a Representative Office in Chongqing is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls

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