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Since the start of its reforms in the early 80’s of last century, China’s economy has been developing rapidly with a growth rate of more than 8% year on year, transforming the Chinese economy into the world’s second largest economy in terms of size. Over the years, China has acquired an increasingly prominent role in international trade, which is expected to continue to increase in the years to come. Its importance cannot be ignored and is further underlined by the fact that during the current economic slowdown, China’s economic developments are the driving force behind worldwide economic growth.
An increasing number of foreign companies are doing business with China. As business continues to develop, companies at a given time will have to make a strategic decision whether to establish a representation in China in order to be able to act adequately on the opportunities the Chinese business environment has to offer. The decision to set up an office in China and decide in which form is not to be taken lightly.
The Representative Office is the most basic of Foreign Invested Enterprises (FIE’s) in form. The absence of capital requirements, a straightforward incorporation process in combination with a relatively short timeline and minimal requirements on overhead investments, makes Representation Offices an excellent means to test the market in terms of looking for Chinese suppliers, customers, for coordinating the foreign parent companies’ activities in China as well as for conducting market research required for developing a long term strategy for China. All factors considered it is a relatively safe first step into the Chinese market.
Focus in this book goes out to the organizational, personnel, legal and compliance aspects of setting up a Representative Office in Mainland China. The information provided aims to support entrepreneurs with relevant insights to successfully establish their office in China.