Closing a Business in China: What is the Simplified Deregistration Procedure?

Recent years have seen China reforming its enterprise registration and deregistration system to invigorate the market and improve the efficiency of its government services. In 2017, the government introduced a simplified deregistration procedure to facilitate certain types of enterprises to exit the market more quickly.

Compared with the normal deregistration process, the simplified deregistration procedures can reduce the time and cost of market exit.

In this article, we introduce China’s latest policies on simplified business deregistration (also known as “e-deregistration”), including the simplified State Administration for Market Regulation (SAMR) deregistration procedure and simplified tax deregistration procedure.

Simplification of documentation and procedures

The tax bureaus will facilitate and optimize the tax deregistration process through the following measures:

• Simplify the information required: Taxpayers who have conducted real name authentication are exempted from providing tax registration certificates and personal identification documents.
• Open a special window: A special service window for tax deregistration will be set up with the tax authorities and the number of these windows will be adjusted according to the situation.
• Offer a ‘combo’ service: Integrate the pre-approval items for tax deregistration, plus the service of acceptance at one window, internal circulation, and completion of handling tax-related affairs within a prescribed time limit.
• Strengthen the ‘first asking duty system’ and ‘one-off notification’: When the taxpayer goes to the tax authorities to handle tax deregistration, the tax collector approached first is responsible for asking the situation, distinguishing the matters and complexity, classifying the relevant notice that needs to be handled, communication, and counseling.
• Optimize internal work and duties: It is necessary to innovate working methods, simplify the process, have division of labor, achieve interconnectedness, and handle within a time limit.

Although these policies have been implemented to different degrees in various regions, eligible foreign companies may seek advice and expertise from local experts or local authorities to take advantage of simplified deregistration procedures.

If you wish to deregister an enterprise in China, or have further questions about the company deregistration process, please feel free to contact us at china@dezshira.com.

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