The head office of a representative office (RO) shall apply for deregistration upon the occurrence of the following events: (1) the head office decides to close down its RO in China; (2) the RO will not continue its operation upon the expiration of its residence in China; (3) the head office ceases to exist; (4) the RO has been ordered to close down in accordance with the law.
The RO shall apply for deregistration with various registration authorities involved, such as the registry office, tax bureau, customs, foreign exchange administration bureau, opening bank and public security bureau. The detailed procedures are as follows:
Cancellation of Tax Registration
A tax audit conducted by a local Chinese CTA firm may be required by the tax bureau for the purpose of tax deregistration.
The time frame for the tax deregistration is subject to the schedule of the tax bureau. It may take approximately 10-20 working days if there are no unpaid taxes or other instances of non-compliance.
Applying for Certification from the Customs
An official certification from the Customs shall be obtained for the purpose of RO deregistration. It may take around 7 working days to get such certification from the Customs.
Applying for Certification from the Foreign Exchange Administration Bureau
An official certification from the Foreign Exchange Administration Bureau shall be obtained for the purpose of RO deregistration. It may take around 20 working days to get such certification from the Foreign Exchange Administration Bureau.
Please note applying for a certificate from both the Foreign Exchange Administration Bureau and the Customs 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.
Closing Bank Account
When applying for the closing of bank account, unissued checks and deposit slips will need to be returned to the bank and any funds remaining in the account should be transferred out. If the RO intends to transfer the funds to its head office, it will be required to provide reasons for doing so and seek approval from the bank. It may take around 10 working days to close the RMB basic account of the RO.
Cancellation of Business Registration
The RO shall submit a deregistration application to the registry office when it completes the foregoing procedures. It may take 5 working days to obtain a deregistration notification from the registry office.
Cancellation of Seals or Chops of the RO
The RO shall cancel its seals or chops with the local public security bureau after it receives the deregistration notification from the registry office.
The time needed for completion of the whole deregistration procedure of an RO in China will be around 3-6 months. The head offices shall be responsible for any remaining liabilities of the RO.
Notwithstanding various deregistration processes, it is important that the investor shall keep the originals of all accounting records and business documents after the closure of the RO. This is to safeguard its interest as the investor. In accordance with the relevant laws and regulations in China, the RO’s accounting books shall be kept by the head office for up to 10-30 years after winding up of the RO.
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
