Chine

Actualités juridiques - New requirements on registration and administration of representative offices of foreign companies in China

The State Administration for Industry and Commerce and the Ministry of Public Security have jointly issued a circular on 4 January 2010, imposing new requirements on registration and
administration of representative offices of foreign companies in China.

The State Administration for Industry and Commerce and the Ministry of Public Security have jointly issued a circular on 4 January 2010, imposing new requirements on registration andadministration of representative offices of foreign companies in China. 

New Requirements

1- When applying for establishment or change of name, the representative office shall submit to the competent administration for industry and commerce (“AIC”) the registration Certificate of the foreign company proving the existence of the foreign company for at least 2 years as well as the bank credibility letter, both of which should be legalized by the Embassy of China after being notarized by a notary of country/region where the foreign company is located.

Comments
 The requirement of the existence of the foreign company for at least 2 years is a new conditionThe requirement of notarization and legalization of the bank credibility letter is a new condition. 

2- When applying for renewal, the representative office shall submit to the competent AIC the document proving the existence of the foreign company issued by the relevant authority of the country/region where the foreign company is located. 

Comments
Generally, such document proving the existence of the foreign company should be the valid registration certificate of the foreign company. According to the oral reply of Shanghai AIC, such document should be notarized and legalized too.

3- The valid term of the registration certificate of representative office granted by the AIC at the time of establishment or renewal of the representative office shall be 1 year only instead of 3 years. 

Comments
The representative office which already obtained a registration certificate with valid term of more than 1 year is not mandatorily required to shorten the valid term. However, all existing representative offices will now have a one-year valid registration certificate when they renew or change their current registration certificate. It means that the representative office shall be renewed every year by submitting the notarized and legalized valid registration certificate of the foreign company

 

4- The number of the representatives (including the chief representative) in a representative office shall not exceed 4 people. 

Comments
The representative office which already has more than 4 representatives is not mandatorily required to reduce the number of representatives. However, such representative office is not allowed to add new representative. The Circular does not mention the nationality of the representatives. According to the oral reply of Shanghai AIC, the restriction on the number of representatives applies to both foreign representatives and Chinese representatives. At current stage, there is no restriction on the number of Chinese employees in a representative office. 

5- The competent AIC shall carry out on-site check within 3 months after issuance of registration certificate of representative office.

Comments
The main purpose of on-site check is to prevent “fake” registered address, i.e. the representative office is not actually located at its registered address. However, the AIC may also examine the operation of the representative office. If the representative office is found to carry out business operation and receive any kind of turnover, it will be punished based on the regulation of business operation without a license. If the situation is serious, even the public security organ may be involved. The representative offices that are discovered to have moved without updating their registered address will also be subject to strict scrutiny by the authorities.[...]

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Une publication du Cabinet UGGC
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