A Representative Office, commonly known as a Rep Office, serves as a non-profit entity established by foreign companies to engage in market research, promotion, and liaison activities in Hong Kong. This is a strategic way for international businesses to explore the local market and establish a presence without engaging in profit-generating activities.
Purpose of a Representative Office
Rep Offices are not considered separate legal entities from the mother company, which remain legally responsible for all the activities conducted in Hong Kong. Also the legal name of the rep office is the same name as the mother company’s one, unless the name is already in use in Hong Kong.
A Rep Office is not permitted to engage in profit-generating activities, direct sales, or transactions, it serves only as a platform for foreign companies to:
- Conduct market research and gather information about the local business landscape.
- Promote the parent company's products, services, and brand presence.
- Facilitate communication and coordination with local partners, clients, and government agencies.
- Build relationships and explore potential business opportunities.
To proceed with the activities in Hong Kong, A local agent or sponsor is required to assist with the Rep Office's registration and liaise with Hong Kong government authorities. This Agent can be moved in Hong Kong from the mother company, or chosen from the local market.
As Representative Offices are not incorporated entities, they are exempt from obligations related to filing, accounting, and other regulatory requirements, such as the maintenance of statutory records.
These offices, which do not generate income, are not obligated to submit tax returns to the Inland Revenue Department. Nonetheless, they are required to apply for a Business Registration Certificate from the Inland Revenue Department.
Registration and Setup Process
Registering with the Companies Registry is unnecessary for Representative Offices in Hong Kong. However, they are required to seek a Business Registration Certificate from the Inland Revenue Department within a month of their establishment. The following documents need to be submitted during the registration process:
- Completion of the designated application form
- Identification proof for the chief officer of the Representative Office in Hong Kong
Upon successful application, the Business Registration Certificate will be issued on the subsequent business day and must be collected in person. This certificate must be prominently displayed within the office premises at all times. In case there are alterations to the registered details of the business, you must promptly inform the Hong Kong Inland Revenue Department in writing within a month of the changes. The Business Registration Certificate requires renewal annually or every three years, depending on the validity period (one year or three years), and renewal should be initiated one month before its expiration.
Conclusion
Establishing a Representative Office in Hong Kong offers international companies an avenue to explore the local market, promote their brand, and build valuable connections. While Rep Offices do not engage in profit-generating activities, they serve as a strategic stepping stone for foreign companies aiming to understand and engage with the dynamic business landscape of Hong Kong.
If you are planning of setting up a Rep Office, consult with our professionals who specialize in company registration and compliance to ensure a smooth and successful establishment process.