We are in this situation with one of our companies, would like to see if anyone has similar experience: we have appointed someone as legal rep, simply because we trusted him more than anyone else. His job is actually with sales in another country than China. He receives some payment for his role in China via a consulting service agreement between HK entities. Finally the WFOE has been setup and our accountant asks how we should pay this guys tax.
Should we change his scheme and have him paid (and taxed at source) in China? Is it normal to have an unpaid legal rep (I have had this in previous company, basically the legal rep had a full time job in another country but was appointed to the China board and we couldnt trust anyone else to be legal person)? Could it get us questions during audits?