Representative office
in Hong Kong.

A representative office is an entity that is ideal for foreign companies seeking to study the market in Hong Kong for research and business development purposes.

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What is a representative office?

A representative office (RO) is an extension of the overseas company. Foreign companies that wish to gain market perception, experience and a better understanding of the Hong Kong business environment before setting up a full-fledged office can opt for establishing a representative office first.

It does not have independent legal standing in Hong Kong, hence the foreign parent company remains fully accountable for its debts and liabilities. A representative office often has foreign managerial personnel and locally appointed support staff.

Advantages and disadvantages of setting up a representative office.

Advantages.

There are no registration requirements with the Company Registry, no minimum capital requirements and no compliances like filing tax returns nor maintaining accounts. The only requirement is to register with the Inland Revenue Department and obtain a Business Registration Certificate.
It is not required for a representative office to file any financial or other statutory returns with the authorities in Hong Kong.
Low maintenance cost from a compliance perspective due to its operating limitation.

Disadvantages.

It has to limit itself to promotion and liaison activities, undertaking market research and organising activities on behalf of the foreign company.
It cannot be involved in profit-making activities and is not classified as a legal entity. It cannot sign or enter into any contracts, sign deals on behalf of the company, raise invoices or letters of credit nor engage in trading activities.

What do I need to set up a representative office?

There are no registration requirements with the Companies Registry for Representative Offices in Hong Kong. However, it must:

Apply for Business Registration Certificate with the Inland Revenue Department (within a month from its date of commencement). Required documents during registration:
- A certified true copy of the certificate of incorporation or equivalent document of the foreign company
- A certified true copy of the English or Chinese translation thereof if the original is not in English or Chinese

Post-registration steps.

Obtaining a Business Registration Certificate – the certificate will be issued on the next working day and must be collected in person. The Business Registration Certificate must be noticeably displayed on the office premises at all times. If the registered particulars of the business have changed, you must notify the Hong Kong Inland Revenue Department in writing within one month of the change. The Business Registration Certificate should be renewed one month before expiry on an annual basis or once every three years, depending on whether your Certificate is valid for one year or three years.
Opening of bank account – once the representative office has received the Business Registration Certificate from the Inland Revenue Department, you may open a bank account with any of the local or international banks based in Hong Kong.