Register RO or WFOE Company in Guangzhou ? It’s A Question!
Sunday, 19 January, 2020 Reply to:
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The difference between RO and WFOE
Legal Status: No
Business scope: Can not be engaged in business
Register capital: No
hiring authority: Can entrust a human resource agency for hiring and pay the insurance.
Tax: Can't issue invoice, pay tax according to the cost.
Legal Status: Independent legal person
Business scope: Business activity
Register capital: Yes
hiring authority: Can sign labor contract with your employees.
Tax: Can independent issue invoice, pay value added tax and business tax according to actual billing.
Difference in Tax Policy on Ro &WFOE
The representative offices can be divided into 3 categories:
1.Representative offices established by for foreign law firms, auditors, consulting companies, financial companies etc. in China. These companies belong to a special category, which are allowed to purchase invoices and pay taxes based on the normal rate of taxation.
2.Representative offices established by foreign company in the fields of services, trade and agent business (belonging to the representative offices in common sense)
Representative offices of this category are not entitled to sign contracts and collect payment. They mainly focus on the market promotion and commercial liaison with the tax payable calculated based on the their expenditures
3.Representative offices of foreign governments or non-profitable international organizations in China or those which can present certifying documents to show that they handle their own products instead of products of other companies.
After going through the tax exemption verification by the tax authorities, such representative offices are entitled to apply for tax exemption.