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Close Down a Company
Foreign investors may decide to close down a company in China for numerous reasons. Sometimes the business may no longer be profitable, or shifting market conditions and unexpected economic downturns can lead investors to reconsider their strategic plans and choose to cease operations entirely.
However, choosing to close down a company in China is not as simple as halting business activities. It involves a meticulous legal process, requiring careful adherence to numerous procedures, including application submissions, official deregistrations, and detailed negotiations with various governmental departments.
Typically, the entire procedure to close down a company in China can take between 3 to 4 months or potentially longer, depending on individual circumstances. Essential stages in this process include formal dissolution, asset liquidation, and deregistration, each legally distinct yet interconnected. Among these steps, asset liquidation stands out as the most critical, involving complex tasks like asset valuation, settling outstanding liabilities, and addressing creditor concerns.
At GWBMA, we offer comprehensive, one-stop services to simplify your company’s closure in China. Our expert team supports you through every essential step, from accurately completing and submitting required documents, forming the mandatory Liquidation Committee, handling the deregistration of necessary licenses and certificates, to professionally communicating and negotiating with tax authorities to ensure a smooth and compliant closure process.
CLOSE DOWN A COMPANY IN CHINA
The most secure and reliable service of closing your company
- A quick and inexpensive method of closure
Voluntary dissolution is a quick and inexpensive method of closure. - The best plan alternative procedure.
Completely closing down the company removes it from the SAMR registry, allowing you to freely move forward. - Straightforward process
It’s a relatively straightforward process that can be managed by you as a Legal Representative or Director. - Closing a WFOE in 45 Working Days
For newly established startups, the comprehensive deregistration typically takes around 45 working days. - Expert Assistance and Guidance
Professional guidance reduces complexity, ensuring regulatory compliance and smooth communication.
Company Closure Process IN CHINA
Shut down a Foreign Invested company in 30-45 Working Days
Basic Documents Required
Documents required to Close down a company in China
License & Certificates
Business License and the other certificates, such as the Import & Export license (if you have). Golden Tax disc, USB key.
ID proof
The Photocopy of Passport or ID card of the company's Legal Representative.
Statement of Accounts
Fapiao collection and purchase book, Annual Reports, Annual Audit, Accounting reports, the tax returns monthly from setting up to now.
Stamps
Company stamp, Financial stamp, Invoice (Fapiao) seal and Legal Representative stamp
What do you get
What do you get after Company Deregistration
Tax Cancellation Certificate
You will receive the Tax cancellation certificate by Tax Bureau.
Company Deregistration Notification
You will receive the Chinese company cancellation Notification by SMAR
Frequently Asked Questions
Learn more about Company closure in China
How much does it cost to Close down a WFOE in China?
The Company closure cost depends on the company type, the business scale, and the business industries. Therefore, if you want to close down a company in China, just contact us directly. We’ll analyze your company situation and then provide the most cost-saving proposal.
What are the reasons to close down the company?
Most of the company closure reasons due to profit loss of their business in China, which has become too difficult and expensive to operate. Certainly, this situation can also happen due to an economic impact caused by the current COVID-19 pandemic.
What is the Liquidation Committee?
According to the Company law, Within 15 days of the decision to liquidate a company by the shareholders’ meeting, a Liquidation Committee must be formed. The committee will take responsibility for the liquidation procedures and report back to the shareholders.
Generally, the liquidation committee is comprised of at least 3 members including a chairman, which usually includes the Legal Representative.
What processes do I need to shut down a company?
The entire process of deregistration write-off for the company is generally about 5 to 7 months.
- State Administration for Market Regulation (SAMR) pre-filing.
- Newspaper billboard publication.
- The municipal taxation cancellation application.
- Go to the local tax bureau for cancellation.
- State Administration for Market Regulation (SAMR) cancellation fill submission.
- Social security cancellation.
- Bank write-off cancellation.
What is the government requirement for winding up the company?
According to the Company Law in China, the closure of companies is possible only after the company official submits a statement of Accounts, affidavit, indemnity bond, and bank closure certificate.
What are the legal consequences of the False announcement by the Liquidation Committee?
If the Committee publishes the false announcement and the company owes debts or liabilities when it closes and doesn’t go through the proper liquidation procedure, the legal representative and the member of the liquidation committee may be held personally and criminally liable.
What is the time taken to complete the company closure process??
If it is a newly established company that has just a little invoice issued, the complete company closure process takes about a minimum of 2 months.
Otherwise, the deregistration process takes about 3 to 6 months, depending on the accuracy and completion of the requirements.
What are the legal consequences of improper company closure?
According to the relevant laws and regulations of China, if a Foreign Invested Company didn’t take the right steps to close the business and clear all obligations, it might cause a lot of negative consequences and the mentioned company might attract penalties or even get blacklisted in China.
- If the companies are not declared to the tax authorities and annual inspection, they will be fined by the Tax bureau every year.
- The legal representative or the investors of the company will be put on the blacklist by SAMR, and they are unable to register a company again.
- The legal representative of the company will be put on the blacklist in China’s credit system and will not be able to buy an air ticket and High-speed rail ticket in China. and she/he might never get a visa from the Chinese Embassy again.
What are the related documents needed for company closure?
The following are the major legal documents required for company closure:
- Business License and related certificates
- Termination application form
- Liquidation report from a Chinese auditing firm
- Auditing report and related tax documents
- Separate application by the holding company
- Board resolution agreement or statement
- Certificate of approval from the Tax bureau
- Certificate of tax payment completion
- Deregistered bank accounts, registration certification, enterprise code certificate, and statistics certificates
- Notice of cancellation or dissolution
- Canceled commerce commission and seal
Could I stop renting the registered address during the company closure process?
The answer is No. Before the official deregistration certificate has been issued by the SMAR, a company will be required to maintain the office of registered address in the Business license the Company Closure process. Of course, you can negotiate with the Landlord of the office.