A representative office in China of a foreign insurance company is in fact not a true commercial presence in China because a representative office and its employees are only allowed to conduct non-business activities in Chinese insurance market such as liaison, market research and are prevented from conducting or engaging in any business activities and providing insurance services. On the other hand, if an insurance company has a commercial presence in China, this means it can provide insurance services in China. But establishing a commercial presence such as foreign invested insurance company by a foreign insurance in China shall be subject to have a representative office in China for over two years. Therefore, setting up a representative office in China is the first step for a foreign insurance company who want to establish a commercial presence in China.
