Representative Office Market Entry
One of the easiest ways for a business to enter China is through a Representative Office(RO). The Rep Office requires very little to setup on the part of the parent company while providing maximum outcome.
But what is a representative office (RO), as they’re commonly known, and what benefits do Representative Offices have?
What is a Representative Office?
A Representative Office is established by a foreign company allowing them to send foreign staff to China to undertake business activities that may be beneficial.
Notwithstanding growing ties between China and the rest of the world, the vast distances involved can make communication and control difficult.
The Rep. Office acts as of your business place where clients and associations can meet you. This site allows your company to exercise authority over your brand, marketing, and supply chain in China.
Rep offices permits the company to hire foreign staff and locals which is necessary for day to day activities.
In the simplest way of explaining what an RO is, a Rep. Office is a physical site which gives autonomy over its activity in China.
What are the Benefits of a Representative Office?
Rep Offices have multiple benefits for setting up a business in China.
- No registered capital is needed to set up a rep office. This means that it is fast to set up and convenient to most foreign companies.
- Permits companies to perform market research in China.
- Authorized to manage marketing and promotions within China.
- Being able to perform quality control, advisory and regulatory activities for the parent company.
- Locate new suppliers and clients.
- Quick setup due to restrictions in scope, there is less to be checked when aiming to set one up.
- You can hire staff
- Parent company having a physical presence and office in China
Foreign companies that would like to set up Rep. Office should be clear what their goals are. Companies that want to do more than just monitor and control this is not your best option. The Companies that are focusing primarily on marketing, promoting of product and service here, or even for networking, then having a representative office in China is the best thing for the organization.