New regulations on Rep. Offices in China

On 4 January 2010, the State Administration for Industry and Commerce and the Ministry of Public Security, jointly released a notice to strengthen the representative offices in China.

On 4 January 2010, the State Administration for Industry and Commerce, SAIC and the Ministry of Public Security, MPS, jointly released a notice to strengthen the administration and management of foreign enterprises' representative offices in China.

The changes specified in the Notice (which is so far only officially available in the Chinese language) are in effect from 15 January 2010. The new rules follow up on a regulation of Rep Offices that has become increasingly stricter in recent times.

Many foreign enterprises establish a Rep Office in China as a launch pad for building relationships and carrying out market research before further investing in China in the form of an incorporated subsidiary. In this way, Rep Offices continue to be key vehicles for foreign enterprises in China, and they have been used (and sometimes abused) by foreign enterprises to achieve a relatively straight-forward and yet effective presence in the burgeoning Chinese marketplace.

The Notice suggests a further step in the fundamental shift in attitude of the Chinese government towards Rep Offices.

To learn more about the new regulations, please download the Briefing from Eversheds Law Firm here.

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