Deregistering a Representative Office in China

By Rainy Yao, Dezan Shira & Associates

Posted: 10th October 2014 08:41

For foreign companies looking to expand into the Chinese market, a representative office (RO) is the easiest type of entity to set up, as it entails no requirements in terms of registered capital. However, investors should be warned that in China, deregistering a representative office can be even more time-consuming and complex than setting up a new one. In this article, we detail the full process of deregistering an RO and provide strategic guidance for doing so.
 
According to the “Administrative Regulations on the Registration of Permanent Representative Offices of Foreign Enterprises” revised in 2013 by the State Council, a foreign enterprise shall apply to the relevant registration authorities for liquidation within 60 days from the date of any of the following:
 
 - The foreign enterprise terminates its RO;
 - The RO no longer engages in business activities upon the expiry of its licensed duration;
 - The foreign enterprise terminates its business; or
 - The RO is required to shut down in accordance with the law.
 
The main deregistration procedure is as follows:
 
Step 1 — Prior to applying to deregister the RO, the company must apply to the tax bureau for a tax audit and deregistration. The company should submit to the tax bureau a board resolution affixed with the signature and seal of the chairman of the board of directors, as well as a cancellation application signed by the chief representative of the RO. This requires the following:
 
 - An application form
 - Business license
 - Proof supporting the change of registration
 - The original tax registration certificates issued by the taxation authorities (e.g., original copy and duplicate of the tax registration certificate and tax registration form)
 - Other relevant documents
 
Step 2 — The company must deregister with other departments and authorities including the State Administration of Foreign Exchange (SAFE), Customs, the State Administration of Industry and Commerce (AIC), the Quality and Technical Supervision Bureau and the Statistics Bureau. This step requires the following:
 
 - A written application for the cancellation of the RO’s registration
 - The cancellation certificate from the tax bureau, as obtained in Step 1
 - A certificate issued by Customs and SAFE proving that all the relevant matters have been completed
 - Other relevant materials required by the AIC
 
According to the AIC, the cancellation application will be processed within 10 workdays of receipt. If successful, the company will be issued a “Notice of Deregistration” and all the registration certificates will be cancelled.
 
Step 3 — The company should close its bank account.
 
The total time required for deregistration varies from six months to two years (or more) by region.
 
For a consultation on deregistering your representative office (or changing over to a wholly foreign-owned enterprise), please contact the legal professionals of Dezan Shira & Associates at china@dezshira.com.
 
This article was first published on China Briefing.
 
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
 
For further details or to contact the firm, please email info@dezshira.com or visit www.dezshira.com.

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