Closing Down Representative Offices

The closure of a company may often provoke strong emotions and feelings of uncertainty for many of those involved and the interests of a number of "stakeholders" need to be properly protected and balanced - shareholders, employees, customers, creditors and debtors, and the local authorities as regulators and tax bureau. As long as a representative office has no overdue taxes or other issues to be reported to the authorities, then the de-registration procedure can begin.

The first step is to obtain the approval certificate from customs together with a declaration on the reasons behind the decision to wind up operations in China (the same written explanations shall be given to all other bureaus involved in the closing procedures). This is required in order to clear up all records at customs involving any office equipment, car or samples imports.

Subsequently, applications shall be made at the tax bureaus (both local and national) with related papers and RO closure resolution of the parent company, with the director's signature and parent company's chop. In most of the cases the following documents need to be provided:

• An audit report up to the current month
• The ROs tax returns
• Ledgers and vouchers
• Tax registration certificates (original and copy with RO chops)
• If the RO is not subject to taxation then a tax exempt notice from the tax bureau confirming this status has to be presented

After the RO legal code certificate is cancelled and the check book, the chops and other related docs are cancelled then it is possible to close the same account and withdraw or send back to the holding company the remaining funds.

The final step is the cancellation of the business license. In order to do so, all the previous approvals notices from customs and state and local tax bureaus shall be shown to the Administration of Industry and Commerce together with a board resolution from the holding company.

To read the full version of this article, please purchase the February 2010 issue of China Briefing, which can be found in the Asia Briefing Bookstore. Companies requiring assistance may contact any Dezan Shira & Associates' nine national offices at china@dezshira.com for advice or visit www.dezshira.com.