Obtaining Dormant Company Business Status in China During Trade Difficulties: What You Need to Know | Dezan Shira & Associates

Since the outbreak of the COVID-19 pandemic, some small-scale enterprises have been impacted heavily and unable to bear the daily operation costs, such as rent and employee salary disbursals. However, compared with closing the company permanently, some companies are more willing to put their business on hold and get their second wind after surviving difficult times.

To minimize the impact of the pandemic and improve conditions in the business environment, China’s authorities have launched a “business suspension policy”, also commonly known as “dormant company policy” in other jurisdictions. Business suspension or company dormancy allows enterprises to take a temporary break and return to the market when they are financially and operationally stable. The policy is expected to stimulate the vitality of the market and consumption potential. 

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