Provisions of the Shanghai Municipal People's Government on the Administration of Resident Representative Offices of Foreign Enterprises

· Document Number：Order No.42 of the Shanghai Municipal People's Government

· Area of Law： Foreign Economy and Trade

· Level of Authority： Local Government Rules

· Date issued：06-21-2016

· Effective Date：09-01-1986

· Status： Effective

· Issuing Authority： People's Government of Shanghai Municipality

Provisions of the Shanghai Municipal People's Government on the Administration of Resident Representative Offices of Foreign Enterprises (for Trial Implementation)
(Issued by the Shanghai Municipal People's Government on August 6, 1986, and amended according to the Decision of the Shanghai Municipal People's Government on Amending148 Municipal Government Rules Including the Interim Provisions of Shanghai Municipality on Handling Agricultural Machinery Accidents (Order No.52, Shanghai Municipal People's Government) on December 20, 2010 and amended and reissued according to the Decision of the Shanghai Municipal People's Government on Amending 12 Municipal Government Rules Including the Provisions of the Shanghai Municipality on the Administration of Resident Representative Offices of Foreign Enterprises (for Trial Implementation) (Order No.42, Shanghai Municipal People's Government) on June 21, 2016)
Article 1 In order to facilitate the development of international economic and trade contacts and technical exchange and to conduct administration of resident representative offices of foreign enterprises, corporations and other economic and technical institutions (hereinafter referred to as “foreign enterprises”) in Shanghai, these Provisions are developed in accordance with the Interim Provisions of the State Council of the People's Republic of China on the Administration of Resident Representative Offices of Foreign Enterprises and in light of the actual circumstances in Shanghai.
Article 2 Resident representative offices of foreign enterprises in Shanghai (hereinafter referred to as “resident representative offices”) are the organizations that do not engage directly in business operations and whose only role is to make business contacts and render services on behalf of the enterprises dispatching them. However, if there are relevant agreements between government and government, the resident representative offices shall function in accordance with the provisions of the said agreements.
Article 3 To set up a resident representative office, a foreign enterprise shall, in accordance with the relevant provisions of the state, go through relevant registration formalities with the industrial and commercial administrative department.
Article 4 The staff of a resident representative office and their family dependents shall abide by the Law of the People's Republic of China on the Entry and Exit of Foreign Nationals and other relevant provisions and shall go through the formalities of residence or household registration with the Shanghai Municipal Public Security Bureau in a timely manner.
Article 5 When conducting business activities, the representative of a resident representative office shall hold a representative certificate issued by the registration authority. When the representative leaves office, the resident representative office shall go through the modification formalities with the industrial and commercial administrative department and return the representative certificate.
Article 6 A resident representative office shall open an account with the Bank of China or any other bank approved by the State Administration of Foreign Exchange on the strength of the registration certificate in accordance with the relevant provisions of China on foreign exchange administration.
Article 7 A resident representative office and its staff shall go through the formalities of tax registration with the Shanghai Municipal Tax Bureau and pay taxes in accordance with the tax laws of China.
Article 8 When importing or exporting for their own use articles for office or daily use and means of transportation, a resident representative office and its staff shall, in accordance with the provisions of the Chinese Customs, go through the import or export formalities.
Article 9 A resident representative office whose business activities require the installation of commercial telecommunications equipment shall apply to the municipal administrative department of telecommunications for its installation. No resident representative office may set up radio transceivers.
Article 10 The employment of Chinese working staff by a resident representative office shall be entrusted to foreign affairs service entities or other entities designated by the Chinese government.
A resident representative office shall not engage personnel inside China by itself.
Article 11 A resident representative office and its staff shall abide by Chinese laws, decrees and relevant regulations. The Shanghai Municipal People's Government shall, in accordance with the law, protect the lawful rights and interests of resident representative offices and their staff and provide convenience for their normal business activities.
Article 12 The business activities of a resident representative office shall be subject to the supervision and inspection of the industrial and commercial administrative department and other relevant authorities.
Article 13 Where a resident representative office and its staff violate these Provisions or conduct other illegal activities, the industrial and commercial administrative department shall have the authority to conduct an investigation and deal with such cases in accordance with the law, and may, depending on the seriousness of the circumstances, impose such punishments as warning, fines, confiscation of illegal income, cancellation of representative status and cancellation of registration certificate.
Article 14 When, at the expiry of its allowed term of residence or as a result of a decision to terminate its business activities ahead of schedule, a resident representative office is to be cancelled, it shall, 30 days ahead of the expiry or the termination of its business activities, submit a written report to the Shanghai Municipal Commission of Commerce. After such matters as debts and taxes are completely settled, the resident representative office shall go through the deregistration formalities with the industrial and commercial administrative department and hand in its registration certificate for cancellation.
The foreign enterprise concerned shall continue to be responsible for any of the unsettled matters in respect of its resident representative office in Shanghai.
Article 15 Where a resident representative office changes its name, its chief representative or other representatives, its scope of business, its term of residence or its address, it shall go through the formalities of modification registration with the industrial and commercial administrative department. In the case of change of the location or staff and their family dependents, the resident representative office concerned shall also go through the modification formalities with the public security authority.
Article 16 These Provisions shall apply, mutatis mutandis, to the applications made by the enterprises owned by overseas Chinese or by Hong Kong and Macao enterprises for the establishment of resident representative offices.
Article 17 These Provisions shall come into force on September 1, 1986.