Hong Kong Representativ Office In China

$\\\"advantages\\\"$	$\\\"top\\\"$
Least capital injection required. As RO is not a legal entity, actually no minimum share capital is required. Can hire local staff . Can handle market research, sourcing, project investigation for mother company, who in turn to execute trading function.
$\\\"disadvantages\\\"$
Limitation in activity. No trading or invoicing is allowed Local staff should be hired via government admitted agents Although not profit center, cost expenses still attract tax liability(ies)
$\\\"setup$	$\\\"top\\\"$
Takes around one (1) month to apply A chief representative (CR) is to be appointed Company should be able to present bank reference letter showing 6 digit average balance in past 6 months (in HK$ terms). An office premise rental agreement (or ownership document) which is valid for foreign investor use. The term should be at least 12 months long.
$\\\"documents$	$\\\"top\\\"$
Applicant company
Certificate of Incorporation Member register Director register Last filed return to company registry Last filed return to tax department Company/Business profile and reason of setting up RO Minutes of board meeting to setup RO Minutes of board meeting to authorize chief representative Bank reference letter
Chief representative
Valid Passport copy Photos Resume
Application letter	$\\\"top\\\"$
One to Foreign Economic Relations & Trade Commission Another one to Administrative Council of Industry & Commerce
$\\\"tax$	$\\\"top\\\"$
Although a RO is not to conduct business, it attracts tax on:
Chief representative and local staff\\\'s individual income tax (IIT) Business tax base on monthly operational expenses (BT) Income tax base on annual operational expenses (IT)
IIT above depends on salary amount while BT 7 IT roughly amounts to 10% of annual operational expenses.
$\\\"cost\\\"$	$\\\"top\\\"$
License renewal - RO license has to be applied again once permit is expired. Maximum 3 years approval will be granted and depends on rental lease terms.
$\\\"accounting\\\"$
Tax filing has to be done on monthly and annual basis. Moreover, there are statutory audit on the expenses account and foreign currency back account Service fee for monthly accounting and tax filing starts from RMB 2,500 while annual audit starts from RMB 5,00