They are established by a foreign company to represent the parent company to carry out business liaison, arranging guest receptions, strengthening the parent's relationship with local companies and the government as well as handling local matters such as quality control, product promotion, market research and technology exchange.
An RO can only incur expenses in China and cannot receive revenue.
For foreign investors who are in the early stages of investing in China and who may be unfamiliar with the local market establishing a representative office, with a small number of employees (generally under 10), could be beneficial to initially explore the market, discover business opportunities, expand a corporate image and establish partnerships.
For foreign companies who have already established preliminary contacts with Chinese companies a RO can be set up for the purpose of supervision and daily contact.
To read more about Representative Offices please click here.