What are the legal consequences that a foreign company sets up arbitrarily permanent representative office in China and engages in profitable operation?

If a foreign company sets up arbitrarily a representative office or engages in operation, without registration, the registration office is entitled to stop its activities and levy a penalty of RMB 50,000–200,000.

If the representative offends against regulations by engaging in profitable operation, the registration organ will order correction and confiscation of illegal income as well as instruments, equipment, raw materials, products, etc. in addition to a penalty of RMB 50,000 to 500,000. If sufficiently serious, the registration certificate shall be canceled.