Rep Fitness: From Employer of Record to Representative Office Registration
China
Challenge
Rep Fitness, a gym equipment company that manufactures and retails multiple lines of machines, weights, and gym accessories, needed to establish operations in China. Founded in 2012 in Denver, Colorado, the company had grown from a 2-man team to over 150 employees and needed to expand into the Chinese market. Initially, they faced the challenge of hiring local employees without having a legal entity in China. Later, they needed to transition from using an Employer of Record service to establishing their own legal presence in China to have more control over their operations and employee management.
Solution
FDI China provided a phased approach to Rep Fitness's China market entry. Initially, in November 2019, we provided Employer of Record services, allowing Rep Fitness to hire local employees in Shanghai through FDI China's legal presence via a two-way contract structure between the employees and FDI China, and between FDI China and Rep Fitness. In September 2020, when Rep Fitness decided to establish their own entity, we assisted with Representative Office registration in Shanghai. We managed the complete registration process and helped open their corporate bank account at HSBC China, navigating the extended timeline due to COVID-19 travel restrictions that required the legal representative's physical presence for the bank interview.
Results
Rep Fitness initially requested our Employer of Record service for hiring employees in November 2019. In the absence of a legal entity in China, Rep Fitness hired local employees in Shanghai through FDI China's legal presence. In October 2020, the Rep Fitness representative office was fully registered. Once the business license was issued, we assisted with opening their corporate bank account at HSBC China. In March 2021, the EOR employees hired by FDI China on Rep Fitness's behalf in 2019 and 2020 were successfully transferred to the Rep Fitness entity in China, providing them with full control over their Chinese operations.
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