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  • Casual Articles - Setting Up a Representative Office in China - Restrictions

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    f: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are pri
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    Chinese foreign investment law does not permit a Representative Office to carry out direct business activities. It is limited to activities such as market research, product promotion, and liaison. It may not charge fees for its services or engage in profit-making activities such as direct sales or marketing.

    A Representative Office should take special care when performing the following activities:

    Billing Procedures: A Representative Office may neither collect money for its parent company nor invoice clients directly - this must be handled by the parent company. This is a tricky and ambiguous area, and it would be wise to subject your Representative Office’s billing procedures to the scrutiny of a competent professional in China to ensure that it is not operating outside of its scope of business.

    Signing Contracts: All contracts must be signed by the parent company, although a Representative Office can negotiate contracts that are later signed by its parent company.

    Employing Staff: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are pri

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    it-making activities such as direct sales or marketing.

    A Representative Office should take special care when performing the following activities:

    Billing Procedures: A Representative Office may neither collect money for its parent company nor invoice clients directly - this must be handled by the parent company. This is a tricky and ambiguous area, and it would be wise to subject your Representative Office’s billing procedures to the scrutiny of a competent professional in China to ensure that it is not operating outside of its scope of business.

    Signing Contracts: All contracts must be signed by the parent company, although a Representative Office can negotiate contracts that are later signed by its parent company.

    Employing Staff: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are pri

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    invoice clients directly - this must be handled by the parent company. This is a tricky and ambiguous area, and it would be wise to subject your Representative Office’s billing procedures to the scrutiny of a competent professional in China to ensure that it is not operating outside of its scope of business.

    Signing Contracts: All contracts must be signed by the parent company, although a Representative Office can negotiate contracts that are later signed by its parent company.

    Employing Staff: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are pri

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    t it is not operating outside of its scope of business.

    Signing Contracts: All contracts must be signed by the parent company, although a Representative Office can negotiate contracts that are later signed by its parent company.

    Employing Staff: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are pri

    The ABC Of Negotiation - The Three Golden Rules To Become A Negotiator Over Night
    In my 30 years doing negotiations at all levels, I realise that these three rules are really what matter for achieving great results in any type of negotiations. The wonderful thing about these three golden rules is that even unskilled negotiators can win big time using these rules. They are the ABC of negotiation.1) Aim Big 2) Be P
    f: Unlike Joint Ventures and Wholly Foreign Owned Enterprises, a Representative Office cannot directly hire employees - it must use an authorized human resources agency. Although most of these agencies are affiliated with local governments, a few are private. Many Representative Offices get around some of the inevitable inconveniences by independently seeking employment candidates, having the HR agency ‘refer’ these candidates to them, negotiating salary, etc. directly with these candidates and then having the HR agency make the official hiring referral to the Representative Office. The HR agency would then take a percentage of the employee’s salary each month. Although the above-described flexibility with the rules is common, it is best not to go any further in treating the HR agency as a formality because a number of Representative Offices that have tried to skirt these requirements have been closed.

    A draft Labor Contract Law is widely expected to be enacted soon. Assuming that the enacted law is identical to the draft that is currently in circulation, Representative Offices will be allowed to contract directly with employees during the employees’ first year of service.

    Activities Outside the Normal Scope of the Parent Company: Even th

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