Opening a Representative Office in China: Follow These Tips to Choose the Right Location

For an SME wanting to establish a direct presence in China, the simplest and most affordable method is to open a Representative Office.

A Representative Office cannot engage in profit-generating activities (such as issuing or receiving invoices), but it can carry out essential activities that will help your company get to know the market and build relationships with institutions, clients, and potential partners.

You’ll also be able to control promotion of your brand and products— something that's much harder to do if you're relying solely on local distributors.

However, I’ve often seen companies set up Representative Offices that, in practice, failed to carry out any of these key activities.

Why?

There are basically two main reasons:

1. They chose the wrong location
2. They hired the wrong personand most importantly, they didn’t provide enough support

I’ll talk about how to choose the right people for your business in China and how to support them in an upcoming newsletter.

Now, let me give you some advice on choosing the right location for your Representative Office.

Italian companies usually choose first-tier cities like Shanghai, opting for central and prestigious areas—hence, very expensive.

But in reality, the first and most important criterion for selecting the location of a Representative Office proximity to your clients.For SMEs operating in the B2B sector, it’s unlikely their clients are actually based in Shanghai.

So choosing a location assumes you’ve already done an analysis of the Chinese market, as explained in Newsletter No. 14 a few weeks ago.

Once you’ve selected the region, you’ll need to look for suitable office space..

Absolutely do not go the DIY route, and be cautious with real estate agencies.

If possible, rely on trusted individuals familiar with China, or contact the Italian Chamber of Commerce in China or other institutions that offer equipped offices, such as Sales or Business Incubators. Sales o Business Incubators.

These facilities provide access to shared services like reception, meeting rooms, and in some cases, product display areas and showrooms.

Follow these tips to find a suitable location for your Representative Office.

When you’re ready to take the next step in your business development strategy in China—and need larger spaces—you’ll need to make additional considerations.

I’ll cover that in a future newsletter.

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