The mainland parent company is operating abnormally, can it register a Meidan subsidiary?

The domestic parent company is listed in the list of abnormal operations, and it is possible to obtain a business license from the registration level of Dubai Meidan Free Trade Zone. However, domestic ODI Filing, capital exit and overseas bank account opening will all encounter major obstacles. It is not a safe choice to directly use the abnormal mainland parent company to hold Meidan Company. Enterprises cannot only value the registration license and ignore the subsequent compliance problems.

"Business anomalies" in different situations

the mainland parent company is included in the list of business anomalies, not all cases will directly block the overseas subsidiary registration process, the key depends on the specific type of anomaly. Common business anomalies are divided into several categories:

first, there are minor procedural violations such as address loss and failure to publicize the annual report on time.

Second, there are substantive risks such as administrative penalties, large tax arrears and judicial litigation.

Third, it is a serious anomaly that is included in the list of persons who have broken their promises and are in a state of liquidation or bankruptcy. The impact of different anomalies on registered foreign subsidiaries varies greatly and cannot be generalized.

Dubai Medan Registration Link

the US-Dan Free Trade Zone belongs to the UAE's territorial management agency and will not take the initiative to obtain data from the Chinese national enterprise credit information publicity system, but only review the parent company's business license, articles of association, directors' resolutions and credit certification documents after notarization and embassy certification.

If only the annual report is missing and the registered address is missing, the business license has not been revoked, and there is a chance to pass the examination and approval after submitting the registration materials, but the examination and approval cycle is lengthened, the examination and approval personnel will additionally check the authenticity of the parent company's business and require the provision of business planning and financial proof. If the parent company has administrative penalties, judicial disputes, and is included in the list of serious dishonesty, Medan will directly refuse the registration application.

Although the registration can be completed, the bank will carry out strict anti-money laundering due diligence when opening an account in a local bank in the UAE and applying for an employee visa at a later stage. If the parent company is found to be operating abnormally, it will probably refuse to open a corporate account. Even if you get a license and don't have an account, the overseas company can't collect payments, it's just a shell enterprise, losing its actual operating value.

Domestic compliance level

according to the regulations of the Ministry of Commerce and the Administration of Foreign Exchange, Chinese enterprises must complete the ODI overseas investment record before they can normally purchase foreign exchange and remit the investment funds to the Dubai company's account. This is the most critical level for domestic enterprises to go to sea.

First, at the review stage of the Ministry of Commerce, the list of business anomalies is the key veto item. The commerce department inquires about the national enterprise credit information publicity system. As long as the parent company is in an abnormal state, it will directly return the filing application. Even if the address is abnormal and the annual report is not on time, the examination and approval department will judge the enterprise's credit instability and loose management and will not pass the filing. Only after the business exception is removed can the filing process be started.

Second, the foreign exchange level constraints are significant. Without the ODI Filing certificate, the mainland parent company cannot transfer investment funds to the public. If the cross-border payment is forced through personal exchange, the foreign exchange bureau will judge the violation, and the subsequent enterprises and individual shareholders will be restricted from foreign exchange business. Even if the company is registered by chance, the local bank in the United Arab Emirates will refuse to open a company account when it sees that the parent company has a record of dishonesty. Later payments cannot be made and overseas companies are like empty shells.

Registration Advice

complete rectification for abnormal reasons: make up the annual report of the enterprise, change the registered address, clean up the administrative penalty records, apply for removal from the list of abnormal business operations, wait for the 1-2 month publicity period to end, the credit of the enterprise will return to normal, and then handle ODI Filing and registration of Meidan subsidiaries in turn. The path process compliance, later account opening, visa, capital exit without obstacles, is the most secure way to long-term layout overseas.

Zhuoxin Enterprise provides agency services such as domestic and foreign company registration, bank account opening, annual tax return, agency bookkeeping, trademark registration, ODI Overseas Investment Filing, etc. If you have any business needs in this area, please feel free to consult our online customer service!