China Structure – Representative Offices

The RO can facilitate market entry and coordinate sourcing activities and marketing, but it is a toothless version of the possible foreign entities that has little control over the movement and sale of goods and services. ROs are the extended arm of overseas parent companies and can only interact
with Chinese businesses indirectly; however, less tangibly, they can offer a sense of the domestic market and help determine whether China?s 1.3 billion people and its complex business and legal
structure are profitably navigable for your company.

Do you need to control the process of invoicing locally for services or products? If not, and you simply need a local presence capable only of the following permissible activities, then perhaps the
RO is the most useful and inexpensive entity for your purposes.

ROs can be used for the following main purposes:

  • Conducting market research and surveys
  • Liaising with local contacts andsuppliers
  • Presenting and introducing a product to the China market
  • Exchanging technology

ROs can be very helpful in facilitating and establishing trade ties between your parent company overseas and your entities based in China. While ROs may not directly invoice for sales or services
in China, they can act as a liaison in matters relating to orders, shipping payments of taxes, repatriation of money from clients and so on. Beyond this, ROs are accessible to a variety of investors because they have no registered capital requirement and have low maintenance.

Read next :
Wholly Foreign-Owned Enterprises

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