Deregistering a company means that you do not have to continue your obligations as an officeholder. It's a good idea to consider deregistering a company if it's no longer trading. Representative office (RO) is not a legal entity, therefore an RO will be deregistered rather than liquidated. Other types of foreign invested enterprises, such as a WFOE, would be required to be liquidated because they are legal entities and this liquidation process would be, similar to, but more complicated than the deregistration process.
Conditions on RO deregistration
According to the “Administrative Regulations on the Registration of Permanent Representative Offices of Foreign Enterprises” revised in 2013, a foreign enterprise shall apply for deregistration if:
- The RO is required to shut down in accordance with the law;
- The RO no longer engages in business activities upon the expiry of its period of residence;
- The foreign enterprise terminates its business (meaning the parent company is being closed);
- The foreign enterprise terminates its RO (as would be the case if the RO is being closed because the company is leaving China or if the RO is being closed because the company is converting the RO to a WFOE).
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Deregistration process
The tax deregistration, or tax closure, is the first step in the deregistration process and the official deregistration certificate for the RO cannot be issued by the AIC until the tax deregistration has been completed with both the Local Tax Bureau and the State Tax Bureau.
The tax deregistration phase is typically the longest and perhaps most difficult part of the deregistration process, as tax authorities will be looking to see that all taxes have been paid correctly and in full.
Should any unpaid taxes or other irregularities be found by tax authorities at any point during this process, an RO may be required to submit additional documentation, pay penalties, or settle any unpaid taxes with authorities.
After the RO has completed the tax deregistration process, the RO will typically close its bank account. At this point the RO will also need to deregister with the State Administration of Foreign Exchange (SAFE) and with customs authorities. Obtaining a deregistration certificate from both SAFE and customs authorities is a mandatory part of the RO deregistration process, regardless of whether the RO has ever obtained a registration certificate from either of these authorities.
Additionally, the office lease of the RO will also need to be valid up until the official deregistration notification has been issued. Having completed all these steps, the RO will then need to officially deregister with the municipal bureau of the AIC.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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