What is representative office (RO)?

A representative office (“RO”) is an office of a foreign enterprise set up in China for liaison with Chinese businesses and customers on behalf of its parent company. A RO is not a separate legal entity. It is not allowed to carry out direct revenue earning business activities. For example, it cannot enter into sales or service providing contracts and cannot receive payment for sales of products or provision of services. All revenue generating contracts should only be signed by the head office of the RO. Therefore, RO is office used as a tool to test Chinese market before a joint venture or wholly foreign owned enterprises is established in China.