Cost for setting up a Representative office in Shanghai

For a starter your RO cannot conduct business transactions through its account, you are limited to receiving money from your parent company (HK) and paying rent/utilities/taxes etc.

The truth is, it's not worth doing an R/O anymore. They've gutted the advantages, the disadvantages are still there or worse, Shanghai in particular has made it clear that they don't want R/O's. Unless your hobby is fighting with the Bureaucracy 24/7, it's a bad deal. I'd look into something else. What the hell, while I'm here ... Set up costs used to be about 5,000 rmb. Might be a bit higher now since they are requiring more stuff. It's not so difficult to do but like all things Chinese, the first time you do it it's a nightmare (except for the KTV girls.) If you have all your ducks in a row it's not so bad ... but now an R/O license is only good for a year. So bye-bye to that advantage. The "services" are pretty useless. You do the work, they take the money. Good deal for someone. Health insurance and social insurance is not a problem. You can only hire through FESCO or similar. Fesco charges a fee each month and they add roughly 50% to the salaries to cover health insurance, social insurance, all that. So it's not your problem. Taxes and filings, for a small r/o you can find a nice retired lady to do the books. Come in once a week or so, charge you 800 a month. More if you are bigger but no reason to pay some flake a bunch of money for nothing. Your tax will be 10% of your costs. You must have a lease in a Class A building to get the license. So you can't squeak by with a funky office in a cool old building like computer solutions has. You're screwed on this. Then you get to pay roughly 10% of everything you spend, including employees you already paid a tax on. Many of the "advantages" turn out to be a sham, underlaid with invisible fine print and unexpected gotchas ! that makes them worthless. R/O's are not cheap. Except for very very special circumstances, the r/o is like most stuff in China - looks pretty, tastes bad. See if there's another way to do what you want.

No accountant needed for an RO except for the annual filing (and that be done for CNY 4-5K). All the tax/legal and bookkeeping stuff costs about 2-3 hours per month + a few days for all the licence renewals (costs another CNY 3-4K if outsourced). Doing this for a couple of years and never had any issues. Tax is indeed around 11% on all costs, see keep a sizeable chunk of your costs offshore (not so difficult if you do this on declaration basis). Before it was possible to get taxed on your revenues (which are legally 0, so no tax), but those days are gone now. Most important: make sure you get good relations at the local tax bureau.