Affected by the COVID-19 pandemic 2020, many companies are unable or will not be able to continue operating their business in China. For companies facing such problems, we recommended that you cancel the company as soon as possible in accordance with the law, so as to prevent the company from being blacklisted by the Administration for Market Regulation and Tax Bureau due to abnormal operations which may cause you additional costs or affect your reputation negatively. After the company is properly canceled, the subject qualification of the company will be terminated legally, all claims and debts of the company will end after liquidation.
According to the principles of law application that established by the “Implementation Opinions on Several Issues Concerning the Application of the Law on the Approval and Registration of Foreign Invested Companies”, relevant provisions of “Company Law” and “Regulation on Administration of Company Registration” should apply for Dissolution, Liquidation and Cancellation of foreign invested companies.
For Chinese-foreign joint venture company the provisions of the “Regulations on the Implementation of the Law on Chinese-Foreign Joint Ventures” and for Chinese-foreign cooperative company the provisions of the “Implementation Rules of the Law on Chinese-Foreign Cooperative Enterprises” shall also apply.
In case of foreign joint venture company or wholly foreign-owned company, the provisions of “Implementation Rules of Law on Foreign Invested Enterprises” for Dissolution and Liquidation of foreign invested company shall also apply.
The general procedure for the cancellation of foreign invested company is as following:
- The board of directors passed the resolution on cancellation of the company.
- Investors (Shareholders) approved such resolution.
- Approval of cancellation by the Foreign Trade and Economic Cooperation Bureau
- Set up a liquidation team for Liquidation, make announcements and issue “liquidation report”
- Cancellation of tax registration certificate by national and local tax bureau
- Approval of cancellation by customs, finance department and statistics department
- Cancellation of foreign exchange registration certificate by Administration of Foreign Exchange
- Cancellation of Business License by Administration for Market Regulation
- Cancellation of company account by bank
- Cancellation of social insurance and housing fund
- Others
* The procedure may slightly vary for different industries.
For cancellation of company, the following documents and material will be required by the authorities:
- The Business License and its all duplicates
- All company seals
- Account book
- Tax declaration device
- Un-issued VAT invoice (Fapiao)
- Company Certificate U-Key and its password
*The requirements could be different for different locations. We will assist you to successfully cancel the company according to the relevant local requirements.
If you need help to shut down your business in China, do not hesitate to contact us.