In Feb.2021, the overseas headquarter of A foreign company had decided to deregister the Shanghai WFOE, it had stopped all businesses and dismissed the staff. In order to save costs, the A foreign company had also begun to stop paying rents for office space in the place of registration. But it had encountered obstacles in the tax cancellation process, the tax bureau had required the company to make up its accounts, and tax, even accept penalties. As a result, the tax cancelation couldn’t finish in the end. Due to the foreign company had stopped to pay rent fee for three months, the landlord had complained to the Bureau of Industry and Commerce(BIC) of the place where the company had been registered after communicating with the overseas headquarter. The A foreign company had immediately listed as an abnormal state by the BIC, resulting in the inability to continue the cancellation procedure.

Dongjin Remind:

For the period of enterprises cancelation, time is difficult to control, rent arrears to the registered place may be listed as abnormal by the BIC and cancelled. If enterprises want to save costs and do not pay for the rents of original offices, we suggest that find a low-cost temporary registration place near the place and then change the registration place. If you have any problems, please consult with us.

Mike Chang

Partner

mikechang@shanghaiinvest.com