If a foreign company arbitrarily sets up a representative office or engages in operation, without registration, the registration office is entitled to stop its activities and levy a penalty of from 50,000 yuan (about $7,262) to 200,000 yuan.

If the company 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, and other assets, as well as a penalty of 50,000 yuan to 500,000 yuan. If sufficiently serious, the registration certificate shall be canceled.