In 2022 for the fist Chinese govenment introduced new law according to which businesses registered in China can apply for a dormant status.
Foreign-invested companies in China impacted by the post-Covid-19 business environment and geopolitical tensions that are unable to bear the daily operation costs can now put their business on hold, instead of closing the company permanently.
Click here to read more about company liquidation in China.
You can also download our China Company Liquidation Checklist.
Once a company is registered as dormant, it can stay in this status for an indefinite period of time. To resume business operations, the company simply needs to update its status with the government.
Beyond reducing administrative costs the dormant status brings the following benefits:
- Protection of business name, branding or other intangible assets;
- Reserve the special license or pre-approval; no need to re-apply;
- Historical losses are saved to offset future profits.
Obligations and requirements for registering as dormant company vary depending on the region and industry in which the company operates. Contact us to determine an appropriate solution for your specific circumstances.
S.J. Grand is a full service accounting firm focused on serving foreign-invested enterprises in Greater China. We help our clients improve performance, value creation and long-term growth.
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