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Foreign Invested Enterprises FAQ's

I set up a representative office for my international company in China, but things have not worked out. How do I go about closing the office down and discontinuing my business?

Closing down a representative office in China can be a lengthy process if it is not handled in the correct way. This is especially so if the office was not originally established entirely in accordance with the law, but rather through "back-door" connections. China's legal system is becoming more and more transparent and administrative bodies are increasingly enforcing the law, so it pays to do things the right way. Simply walking out of the country is not the way to go!

There are several steps required to close down an office. First, various documents need to be prepared and provided to the relevant authorities. A cancellation form needs to be submitted to the Industrial and Commercial Bureau, and a detailed explanation needs to be provided as to why the office is closing. Application must also be made to the local Commission of Trade and Economic Cooperation (COFTEC) or FETC. Both the representative office manager and the general manager of the parent company must sign the form. A separate application also needs to be made on the holding company's letterhead, and be stamped with the holding company's seal. There must also be a board resolution that agrees to the closure of the office or at least a statement to close the office signed by the chairman of the parent company.

Further, the bank must provide a notice that confirms cancellation of the office's bank account. Tax payment certificates and receipts from national and local tax bureaus must also be furnished to the authority responsible for closing the office, along with a brief statement about the settlement of debts and credits. The Tax Bureau will require the closure audit report to be approved by a Certified Public Accounting firm. The office seal, financial seal and the business license must be returned to the Industrial and Commercial Bureau. If all the necessary documents are provided and taxes have been paid, the closure procedure should take roughly two weeks.


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