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How Foreign Companies are Leaving China Legally?



How Foreign Companies are 

Leaving China Legally?



1

Foreigners Open Companies in SH


In recent years, foreigners have been enthusiastic about investing in China and most of them choose to set up their companies in Shanghai, even as the global economy has taken a slow pace.


According to Shanghai's 40-year foreign investment performance survey in 2020, there are about 60,000 foreign companies, with a total investment of 270 billion US dollars.



But some companies are inevitably affected by the pandemic and others and preparing to shut down for good. Weve even received letters from several old clients, seeking help to close the same company wed helped to register. 


So this is the instruction on how do you legally close your company.



2

Instruction on Closing Your Company


01

Circumstances in Which 

Company Cannot be Closed

Check your company's status to make sure it's not in one of the following circumstances:

Certificate is not complete 

Tax abnormal;

Stock rights have changed but tax has not;

No vouchers/books/statements;

Branch or subsidiary has not been cancelled;

Company operating abnormal.


02

Normal Cancellation?

Simple Cancellation?

Simple Cancellation

Company cancellation procedure is further simplified in 2021, especially for micro and small companies.


Choose simple cancellation when your company is in one of those circumstances:

No tax-related business has been done after registration;

Did not use invoices after doing tax-related business;

Used invoices but has not got any debts or has paid off debts.

Otherwise, normal cancellation is all you can do.


Search this website, log in to submit your cancellation application, and check the progress.

http://yct.sh.gov.cn/repeal_yct_portal/


Source: State Taxation Administration.

General Administration for Market Regulation.


03

Go Through this Procedure

in Right Order


Normal Cancellation  &  Simple Cancellation

Source: State Taxation Adminstration, Anyhelper


04

Companies Cancellation 

in Shanghai 


Here are some specific notes of foreign companies cancellation in Shanghai during the pandemic:

1 At present, the liquidation group of foreign companies in Shanghai is set up online.

Application from overseas or other cities: mail the material, then submit it offline ( can not be handled online ).

Simple Cancellation: Individual industrial and commercial households with combined Business License and Tax registration certificates can go through a simplified procedure without a liquidation group and a commitment letter. 

Or you can contact us and we will let you know what materials should be prepared at what time, and get all the paperwork done for you.


3

Consequences of Not Processing

There are serious consequences of not processing the company cancellation.


Your company will be influenced:

1. If you do not declare tax for a long time, the tax bureau will conduct an inspection;

2. The company will be fined 2,000 to 10,000 yuan by the tax bureau every year.


The legal person and shareholder of the company will be influenced:

1. Your credit in China will be damaged. You may be rejected by Chinese customs, and cannot enter the Chinese market for investment;

2. You will be put on a black list by the industry and commercial bureau, and cannot be a director, supervisor, and manager of other company within three years;

3. The legal person cannot receive endowment insurance, or buy a house with a bank loan;

4. The legal person will be prevented to exit China because of the companys unpaid tax, and cannot take a plane or high-speed rail.

Follow the procedure above and your company will be closed legally within 45 to 90 days.


If you still don't know how to close your company or have any questions about the whole procedure, please contact our consultants.


4

Do Have Faith


Those topics weve been talking about lately arent that pleasant, as we are taking actions to help you with not outsized gains but avoidance of losses. How shall we expect flowers to bloom when sitting on this pandemic volcano?





A non-profit volunteer project, held by a bunch of college kids, just to help their classmates from overseas to live and study easier in China.

Thats the prototype of our company.

The volunteer program is still going on, and more new blood is signing up, young and passionate.

So please dont stop putting your faith in us.




END


If you have any questions about China visa applications(work visa, PU letter, company registration and more), please contact our visa consultant Anna (WeChat ID: AnyHelper_Anna).


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Follow our Official WeChat to get the latest policy of China Visa.



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