Economy
How Do You Set Up A Representative Office In China
An increasing number of Western businesses are looking to establish operations in China in order to support their marketing efforts and get access to the Chinese market. A business can effectively market its services in China and draw customers by opening a representative office there.
Compared to foreign-invested corporations in China, it is simpler for international businesses to establish representative offices. As a result, China offers several chances for both new and current businesses to grow.
Companies who want to achieve that must pick the right legal framework for their operations in China. Each structure has benefits and drawbacks, so business owners and executives should carefully assess which best suits their aims and objectives.
What Is A Representative Office?
A representative office is a location set up by a business or other legal body to carry out marketing and other non-transactional tasks, typically abroad. Since they are not utilized for actual “business,” representative offices generally are easier to create than a branch or subsidiary (e.g., sales).
The organization that serves as the liaison between the Head Office and the Representative Offices abroad is the Representative Office. Foreign investors have made substantial use of them in developing nations like China, India, and Vietnam.
They are constrained since they cannot invoice locally for products or services. Foreign investors are frequently used in industries including product procurement, quality assurance, and liaison work.
Setting Up A Representative Office In China
Getting appropriate counsel is important for new business people because opening an office in China might be difficult.
The setup and registration procedure may begin once you’ve determined that a Rep Office is the best choice for your company.
Follow the steps given below to set up a Representative Office in China successfully —
1. Get Approval
Choosing a name is the first step in creating an office in China. All kinds of businesses must adhere to tight regulations regarding company names.
Confirming that a suggested name is available and does not break any special letters or word regulations is important. The local AIC (Administration of Industry and Commerce) will review and approve this when filed.
2. Rent Your Office Space
An acceptable leasing agreement must be supplied in order to apply for a representative office.
This has to be for at least a year, be in the city of registration, and be on a permitted commercial (non-residential) property. For a reasonable cost, FDI China may give this address for administrative needs!
3. AIC Application
The local AIC receives the application form and the necessary supporting papers. A business registration certificate typically takes 2 weeks to be granted if everything is in order. The representative office is now operational and properly licensed.
4. Carve Business Seals
As with every Chinese corporation, chops, or seals, are utilized for a representative office. These signify the top tier of business permission. The Public Security Bureau can provide the varied chops required in various locations (PSB).
5. Local Tax Office Registration
Taxes, often computed as a percentage of total costs, must be paid starting on the registration day.
6. Obtaining VISA Permits
The rep office chief representative and any other foreign employee must apply via the PSB and get visas (up to 4).
7. Open A Bank Account In China
For daily business expenses, a straightforward Chinese RMB account is required. We can also file for a foreign exchange registration certificate if foreign currency is necessary.
Advantages Of A Representative Office In China
The quickest and easiest way for foreign companies to begin operations in China is through a Representative Office (commonly abbreviated as Rep Office or RO).
It permits foreign businesses to do market research or run operations in China but prohibits them from making a profit. A Rep Office may often be established in a shorter amount of time than a WFOE.
Your business may maintain an official presence in China by establishing a rep office there. This enables you to host employees here, have a location for meetings with clients and suppliers, and organize work.
Most international corporations may quickly and easily open a rep office because there is no requirement for registered capital.
A representative office is capable of controlling marketing and advertising inside China. As a result, it is possible to find new clients and providers. Facilitated technological and idea exchange with regional groups.
You can carry out Quality Control and other advisory and regulatory tasks relating to the parent company’s business operations in China.
Just make sure to keep an eye on the security of the project. Add a tool or two if you can, and don’t forget to consult with a cybersecurity expert too. Just to be sure, you know.
Know The Limitations
A rep office is a parent business’s subsidiary that functions more like an extension of the parent company than a distinct legal entity.
Since a rep office cannot engage in commerce, it is not regarded as a legitimate enterprise in China. In addition, a parent company’s address must be in a commercial building and have been in operation for at least two years.
By Adedapo Adesanya
Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.
In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.
During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.
It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.
There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc also finished the session as the most active stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.
By Dipo Olowookere
The bullish run on the Nigerian Exchange (NGX) Limited continued on Friday with a further 1.00 per cent growth buoyed by gains recorded by Guinness Nigeria, Champion Breweries, and others.
Data showed that the consumer goods space expanded by 1.53 per cent during the last trading session of the week, as the insurance counter grew by 0.51 per cent, and the industrial goods sector marginally gained 0.01 per cent.
However, the banking index depreciated by 0.54 per cent due to a pocket of profit-taking, and the energy industry shrank by 0.09 per cent, while the commodity sector closed flat.
Guinness Nigeria gained 10.00 per cent to trade at N217.80, Morison Industries rose by 9.84 per cent to N4.69, Champion Breweries jumped by 9.69 per cent to N14.15, Austin Laz grew by 9.66 per cent to N2.27, and C&I Leasing appreciated by 9.62 per cent to N5.70.
Conversely, eTranzact lost 10.00 per cent to finish at N12.60, Chellarams slumped by 9.00 per cent to N13.20, Eunisell depleted by 9.89 per cent to N75.15, Africa Prudential moderated by 9.77 per cent to N12.00, and DAAR Communications decreased by 9.18 per cent to 89 Kobo.
The busiest stock on Friday was Access Holdings with 107.6 million units sold for N2.2 billion, Consolidated Hallmark traded 59.9 million units worth N245.8 million, Zenith Bank transacted 48.2 million units valued at N3.1 billion, Transcorp Power transacted 42.8 million units for N13.1 billion, and Champion Breweries exchanged 36.4 million units valued at N510.2 million.
At the close of business, a total of 602.8 million units worth N30.7 billion exchanged hands in 20,550 deals yesterday, in contrast to the 529.7 million units valued at N12.3 billion traded in 18,159 deals on Thursday, representing a surge in the trading volume, value, and number of deals by 13.80 per cent, 149.59 per cent, and 13.17 per cent apiece.
Business Post reports that the All-Share Index (ASI) soared during the session by 1,485.89 points to 149,436.48 points from 147,950.59 points and the market capitalisation moved up by N945 billion to N95.264 trillion from N94.319 trillion.
By Adedapo Adesanya
An intervention of the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market eased the pressure on the Naira on Friday.
The apex bank sold forex to banks and other authorised dealers in the official window to defend the domestic currency, helping to calm the FX demand pressure, with the Nigerian currency appreciating against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.11 per cent or N1.57 to sell at N1,454.50/$1 compared with Thursday’s closing price of N1,456.07/$1.
Also, the domestic currency improved its value against the Pound Sterling in the official market yesterday by N3.95 to close at N1,946.15/£1 versus the previous day’s N1,950.11/£1 but lost 10 Kobo on the Euro to quote at N1,706.46/€1 compared with the N1,706.36/€1 it was exchanged a day earlier.
At the black market segment, the Nigerian Naira maintained stability against the Dollar during the session at N1,470/$1 and also traded flat at N1,463/$1 at the GTBank forex counter.
Despite the sigh of relief, demand pressures outweighed the robust supply from the CBN and inflow from offshore players looking to participate at the OMO bills auction.
Gross FX reserves increased for the twenty fifth consecutive week, growing by a strong $396.84 million week-on-week to $45.44 billion.
As for the cryptocurrency market, it was down on Friday as pressure remained after Federal Reserve chair Jerome Powell’s speech on Wednesday, which hinted at a possible rate cut pause in January. As a result, markets now expect only two rate cuts in 2026 instead of three.
However, Chicago Federal Reserve President Austan Goolsbee, who was against a December rate cut, said he expects more in 2026 than the current median projection.
Ethereum (ETH) slumped by 5.1 per cent to $3,090.61, Solana (SOL) declined by 4.5 per cent to $132.79, Cardano (ADA) depreciated by 3.8 per cent to $0.4103, and Dogecoin (DOGE) dropped 2.5 per cent to trade at $0.1373.
In addition, Bitcoin (BTC) lost 2.4 per cent to sell at $90,342.74, Litecoin (LTC) tumbled by 1.9 per cent to $81.86, Binance Coin (BNB) fell by 0.6 per cent to $886.93, and Ripple (XRP) slipped by 0.5 per cent to $2.02, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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