The process of setting up a representative office can be trying, particularly if the foreign company has only one representative in China to handle all set-up tasks. Representatives of foreign companies that are new to China should provide, at the outset, a detailed explanation of the registration process to the home office. In either case, the timeline for the entire process should be set by the representative in China, with input from the home office. For example, a China-based representative's priorities, as communicated to the home office, might consist of completing registration formalities and locating and furnishing an office within several months, then establishing an accounting system, followed by hiring local staff. The representative and the home office also should agree in the beginning on a comfortable budget and a flexible accounting system so that the China-based representative is not forced to pinch pennies or hunt for receipts.
Unexpected costs are inevitable.
The representative should provide the home office with regular progress reports and resist the temptation to complain about every hassle encountered. The office search At the same time that the China representative is handling the bureaucratic side of opening an office in Shanghai, he or she cannot ignore other necessities, such as locating suitable office space. But thanks to Shanghai's oversupply of commercial real estate, finding a home for the firm's office is no longer one of the most difficult aspects of setting up in the city. In fact, real estate agencies estimate that there will be 7 million sq m of office space available in Shanghai by the end of 1999. Almost all foreign companies rent rather than purchase office space in Shanghai, not least because there is virtually no secondary market for office space.