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How to Close Down Your Business in China

Normally, we have three ways to close down a foreign-invested Company in China.


1.      Formally dissolving the Company. After the Company pays up all the salaries and social insurances to its employee, taxes to the authority, debts to other companies or individuals, it can submit dissolution application with the authorities one by one including but not limited Commerce Bureau, Administration of Industry and Commerce, Statistic Bureau, Finance Bureau, Tax Bureau, State Administration of Foreign Exchange etc. It will take like around 1 year and is very complicated. This is the safe way for the Shareholder the dissolve the Company this way though it is time consuming. Because if the Shareholder just leaves the Company alone, there is a good chance that the Shareholder can not establish a new business in China again.


2.      Filing for bankruptcy liquidation. If the Company is in bad finance situation and can not pay up the salaries, taxes or debts, then that is the way the Company can be closed down.


3. An informal petering out. Due to the time and costs involved in the above two scenarios. This option makes the most sense for those companies that decide to back out from China and no plan to establish a new business in China in the near future. This option involves the Company to do the following at minimum:

(1) Terminating all the employees of the Company.

(2) Paying all the taxes, pensions.


After completing the above, the Company still exists and shall pay the taxes every year which will be minimal. The advantage of this option is that if you do eventually decide to revive your business in China, there is a Company ready.

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