Do you need a representative in China? Representative office, subsidiary or contracted representative (2026)
Short answer: most UK and European companies that buy from China do not need a registered office there. A Representative Office cannot sell, invoice or hire staff directly, pays tax even with no income, and takes months to become fully operational. If what you need is someone who speaks to your suppliers in Chinese, visits factories and keeps orders on track, a contracted representative, hired by the project or by the month, is usually faster and far cheaper. Set up an entity only when you need to trade, employ or hold assets in China.
Your three options compared
| Representative Office (RO) | Subsidiary (WFOE) | Contracted representative | |
|---|---|---|---|
| What it is | A registered liaison office of your foreign company | A Chinese company you own | A firm or person working for you under a service contract |
| Can it sell, sign revenue contracts and invoice in China? | No | Yes, within its licensed scope | No, and it should not sign for you without written authority |
| Can it employ staff? | Not directly; staff are engaged through authorised HR agencies | Yes | Uses its own people |
| Tax | Usually taxed on a deemed profit of at least 15% of its expenses, even with no income | Corporate income tax on profits | You pay a fee; no Chinese entity of your own |
| Time to be fully operational | Typically 3–6 months | Typically 3–6 months | Days |
| Best for | Long-term market research and liaison where a formal presence matters | Selling, manufacturing or employing in China | Managing suppliers, visits, quality and sourcing |
(Timings and tax treatment from China Briefing's 2026 comparison; the RO rules are in the State Council's Regulations on the Registration of Resident Representative Offices of Foreign Enterprises.)
What a Representative Office can and cannot do
Under the regulations, an RO may not carry out profit-making activities. It may only do market research, display and promotion of its parent company's products, and liaison on sales, services, procurement and investment. Profit-making activity can be fined between RMB 50,000 and 500,000. An RO can have one chief representative and up to three other representatives.
That makes an RO useful as a visible, formal presence. It does not make it a cheap way to have "someone in China".
Can you just hire a person in China?
Not directly. A Chinese law firm writing in 2026 notes that a foreign company without a Chinese entity generally does not qualify as an employer under Chinese labour law. Employer-of-record services exist, but the same firm warns they can create risks: the foreign company may be treated as the real employer, the work may look like unregistered representative activity, and it may create a taxable presence. It suggests using them only short term.
When a contracted representative is the right answer
- You buy from several Chinese suppliers and need someone to call them in Chinese, chase schedules and resolve problems.
- You want factory visits, production checks and sample collection without sending your own staff every time.
- You are qualifying a new supplier or managing a first order and need help for a defined period.
- You plan to visit China and want the meetings arranged and someone at your side who speaks the language.
Make sure the contract says who pays the representative (only you), what they may and may not commit you to, and how they report.
Visiting China yourself in 2026
UK ordinary-passport holders can enter China without a visa for up to 30 days for business, tourism, family visits, exchanges or transit, from 17 February 2026 until 31 December 2026, according to the Chinese Visa Application Service Centre in London. China's 240-hour visa-free transit scheme also covers UK nationals travelling on to a third country through designated ports. Check the current rules before you book: they change.
How we help
We act as UK and European companies' representative in China: by project, on a monthly retainer from £1,500, or for a China visit where a member of our team travels with you from London or meets you in China. We are paid only by you and never by suppliers.
Frequently asked questions
How much does it cost to keep a Representative Office in China?
Beyond rent and staff costs through an HR agency, an RO is normally taxed on a deemed profit of at least 15% of its expenses. China Briefing estimates the effective tax at around 11–12% of total expenses, payable even though the office earns nothing.
Can my representative sign contracts for us?
Only if you authorise it in writing for a specific task. A contracted representative should not be able to commit you by default.
Do I need a Chinese entity to buy from Chinese factories?
No. Most foreign buyers contract with Chinese suppliers directly from their home company.
Is this legal advice?
No. For a decision on setting up in China, take advice from a lawyer qualified in Chinese law.
Sources
- China Briefing: Representative office vs subsidiary in China (29 September 2026)
- Regulations on the Administration of Registration of Resident Representative Offices of Foreign Enterprises (Chinese text)
- SL Shaohe Law Firm via Mondaq: employing staff in China without an entity (15 July 2026)
- Chinese Visa Application Service Centre London: visa-free entry for UK citizens (4 December 2025)
- National Immigration Administration: 240-hour visa-free transit (20 August 2026)