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Shenyang Representative Office (RO) Setup

Shenyang Representative Office(RO)Setup is to setup a legal presence in Shenyang and it is the easiest and most economic way. It is an office of a foreign enterprise set up for the purpose of liaising with Chinese businesses and customers on behalf of its parent company. The examination and approval procedure for a representative office is simple, without requiring registered capital. But a representative office cannot carry out operating activities directly. In fact, it can only carry out business liaisons, product introduction, market research and technical exchange on behalf of an offshore company within the scope of their operations. A representative office does not qualify as a legal entity, so its civil liability shall be undertaken by the offshore company it represents.

Functions of Shenyang Representative Office
1. It can handle market research, sourcing, project investigation, quality control for parent company, liaison with customers and suppliers
2. It cannot enter into purchase/sales contracts and receive payment for services, issue invoices.
3. A RO can open bank accounts and employ staff for above- mentioned purposes.
4. Apply for work permit and residence permit.
5. A RO is still subject to tax liability, so monthly tax return should be carried out regularly.
6. If a RO is set up in Shanghai, it is qualified to get a car without entrance tax.

Advantages of Shenyang Representative Office(RO)Setup
Using a representative office as Shenyang entry form has the following advantages:
1. Affordable: no paid capital required, government and service fees are usually lower than what is needed for WFOEs.
2. Quicker registration process (usually within one month or so), and easy to control than others business type in human resources or taxes issues
3. The quickest, relatively inexpensive and easy to set up.

More Tips for Shenyang Representative Office(RO)Setup
Tip One: Pick the right entity when you are setting up business in Shenyang.
For certain activities and for certain company, a Representative Office (RO) will be the right choice, for other cases this choice might be a waste of time and money, as the purpose of an RO is quite clear but very limited.
Why? Because you cannot directly change the status of an RO into a WFOE in the future if you want to really get your feet into Shenyang and thus you need to register the WFOE separately and close the RO! This implies that you should have a clear plan of what you want to accomplish when setting up a business in Shenyang. The set up process, starting from collecting all necessary documents to opening the bank account at the end, will take between eight to twelve weeks. Please consider that all ROs have the same limited business scope, that is: “engage in non-profit activities related to its parent office”.

Tip Two:Analysis your company market and allocate your target customers carefully.
Usually an RO is used as a basis for doing market research within Shenyang and other not for profit seeking activities like e.g. meeting and researching / acquiring suppliers and potential customers. It is thus the easiest way to officially step into the Chinese market but also a quite efficient one, if you just want to improve supplier or customer relations quickly. Of course there are some disadvantages coming with it. As you can imagine there are certain activities, which you will not be allowed to do and thus create a trade-off between quick and cheap market entry versus limited commercial activity options. In the following chart you can see the opportunities you will have after setting up an RO but also some limitations of a Representative Office.

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