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advantages
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  • 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
setup requirement
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  • 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 required 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
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    • One to Foreign Economic Relations & Trade Commission
    • Another one to Administrative Council of Industry & Commerce

tax implication

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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
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Click here to find out our charges for the above mentioned services or call us at 852.2736.4745 for more information.
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