What is Liaison Office in China?
Set-up a Liaison Office in China
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A foreign entity usually establish a liaison office in China-without engaging in direct commercial activities or generating revenue there. The primary function of a liaison office is to act as a communication and coordination hub between the parent company and the local market.
Key Functions of a Liaison Office in China
Communication Hub: It serves as a point of contact between the parent company and local clients, partners, or regulatory authorities.
Market Research: The office can conduct market analysis, gather local business intelligence, and assess market conditions.
Networking: It helps in building and maintaining relationships with local businesses, government bodies, and other stakeholders.
Promotional Activities: The office may promote the parent company’s products or services, although it cannot engage in sales.
Business Liaison: It facilitates coordination and cooperation between the parent company and local entities, ensuring smooth operations.
Key Features of a Liaison Office in China
1. Non-Commercial Activities:
The office can perform tasks such as market research, networking, and managing communications, but it cannot participate in any income-generating activities.
2. Capital Requirement:
The Liaison offices do not have capital requirements like LLC & JSC companies.
3. Taxation:
Since the liaison office does not engage in commercial activities, it is generally not subject to Corporate Income Tax in China. However, it must still comply with other regulatory requirements, such as filing annual reports.When the liaison office purchases goods or services in China, it must pay VAT. It is not possible to get refund it.
4. Staffing:
The office can hire local or foreign staff, but their salaries are typically paid as FX from the parent company outside of China. These salaries are exempt from income and stamp duty within the scope of state incentives. However, there is no social security exemption, they must pay SGK premiums.
5. Approval and Registration:
Establishing a liaison office requires approval from the China Market Supervision and Administration Bureau. The process includes submitting necessary documents, such as the parent company’s financial statements, a board resolution to establish the office, and a lease agreement for the office space.
6. Duration:
The initial approval is usually granted for three years, with the possibility of extension upon application.
Get in Touch With Us to Register a Liaison Office in China
Liaison offices are a common strategy for global companies & foreign enterpreneurs that want to explore the China market without committing to a full-scale commercial operation.
ATAHK GROUP is a China Accounting and Tax Consultancy company specialized in providing end-to-end Liaison Office formation Services for especially global companies and foreign entrepreneurs which wants to walk into to China Market
We continue to offer cost-effective solutions to global investors and individual entrepreneurs who is willing to enter the China and Asia markets smoothly and quickly, to facilitate full compliance with local legislation and to provide access to tax and social security incentives.
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·Company Registration in China
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