What are the rules governing the formation and operation of a representative office in China?

The rules governing the formation and operation of a representative office in China depend on the business venture structure. Representative offices are a type of business venture in China that is suitable for companies with limited resources and is the most basic and inexpensive type of venture. Any foreign company that wishes to open a representative office in China must first get approval from the Chinese Ministry of Commerce (MOFCOM). An application must then be filed along with any other required documents, including a business license from the home country. Once approved, the representative office can begin operations. Representative offices in China may not generate profit, but they may engage in market research, coordinate international trade activities, and promote sales. Representative offices are not allowed to independently engage in any direct contracting. However, they can facilitate transactions between two parties and may engage in such activities as receiving and despatching goods, making payments, conducting customs clearance and advertising. Representative offices in China must follow the guidelines of the Ministry of Commerce and the Chinese government when conducting business. They are also subject to periodic inspections by the Chinese government to ensure compliance with the relevant laws. Failing to comply with the regulations may result in fines or other punishments.

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What are the rules governing the formation and operation of a representative office in China?

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