China Branch Office

China branch office is belong to branch organization, it don’t have Independent Legal Entities qualifications. The branch organization governed by head office in the business, financial, personnel and other aspects. Economically and legally lack of independence. Thus there’s no requirement of registered fully funded. The branch tax returns can be independent accounting or non-independent accounting. Its business scope may not exceed the business scope of head office.

First, the main characteristics of the branch :

1. The branch is legally established by the affiliated companies, and affiliated companies is unified accounting in the economy, its liabilities in the business activities is responsible for the affiliated companies. Its actual possession and use of the property is part of the head office property in the balance sheet of the the Corporation.

2. Establishment of the branch is not the same with company, it can be established as long as the performance of a simple registration and business formalities. Not independently bear civil liability, without article of incorporation, no board of directors of company making decision and business execution office.

3. The branch has no independent name, as long as name branch after the Corporation.

Second, the branch should have the conditions:

Branch refers to the company established outside the residence to engage in business activities, the branch is not qualification of enterprise legal person. Set up branches shall have the following conditions:

1. Article 47 of the China registration regulations branch registration items include: name, place of business, in charge person and business scope. Names should comply with the relevant provisions of the Country:Name of the branch  must be full name.

2. The operating range must comply with the relevant provisions of the Country: Branch shall not exceed the scope of the company's business scope;

3. Have a fixed place of business and necessary conditions for production and operation: the company can not operating in the same place with branch.

Third, benefits of the branch  :

1. Branch is facilitate to the management, requirements of financial accounting system are relatively simple;

2. The branch is not a independent legal entities, then paid in location of the turnover tax, profits paid by the Corporation consolidated tax. In the beginning of the companies are often take a loss, but losses may be used to offset profits of the Corporation, to reduce the tax burden;

3. The branch profits delivered to the Corporation generally not subject to  provision for income tax;

4. The capital transfer between branch and the Corporation, no need to burden of tax, because there's no involve of the ownership changes, there is a big difference between corporation tax benefit and the branch, companies business strategy highly enhance operational flexibility.