According to Xinhua, on November 25, 2010, China published "Regulations on the Registration of Foreign Companies’ Representative Offices (as opposed to subsidiaries) in China." The regulations, which go into effect March 1, 2011, include rules on registration, establishment, cancellation of registration, and legal responsibilities of the representative offices of foreign companies. According to the regulations, such representative offices may only conduct non-business activities, including market surveys, product display and promotion, and liaising on behalf of their parent companies on product sales, customer service, and procurement and investment in China. The regulations also apply to the representative offices that companies from Hong Kong, Macao, and Taiwan set up in Mainland China.
The representative offices must not conduct activities that endanger China’s state security or social benefits. Offices violating the rules face up to a 500,000 yuan fine.
Source: Xinhua, November 26, 2010