When a Chinese or Taiwanese company winds up its Japanese subsidiary: dissolution, liquidation, and the residence status and remittance on withdrawal

In short: when a Chinese or Taiwanese company winds up its Japanese subsidiary, it proceeds in order from the shareholders' resolution to dissolve, through liquidation by a liquidator, public notice to creditors in the Official Gazette and individual demands, confirmation and distribution of the residual assets, to the conclusion of liquidation (Articles 471, 475, 499 and 507 of the Companies Act). A manager who came to Japan on a Business Manager residence status loses the basis for that status through the company's liquidation, so immigration reviews a change to another status or a switch to departure preparation. Remitting the residual assets to the home country involves tax and a report under the Foreign Exchange and Foreign Trade Act. This article is general information organising the flow of withdrawal and the division of roles among professionals; it does not make specific legal judgements.

What do you start with when a Chinese or Taiwanese company winds up its Japanese subsidiary?

When winding up a Japanese company (a stock company), you start by determining how to make the company disappear (ordinary liquidation, or special liquidation or bankruptcy if insolvent). If the assets exceed the liabilities and there is a prospect of paying all debts in full, the ordinary-liquidation procedure of the Companies Act applies. The main items to organise before you begin are as follows.

To confirm before you begin	Content
Method of liquidation	Ordinary liquidation, or special liquidation or bankruptcy if insolvent (judging whether debts can be paid)
Officers and employees	Retirement of the representative and directors; dismissal notice to employees and loss of social-insurance qualification
Licences	Whether a notification of abolition or surrender is needed if the business holds a licence
Residence status	Treatment of officers staying on a status such as Business Manager
Assets	Assets such as real estate, deposits and receivables, and liabilities such as payables and borrowings

Because dissolution and liquidation move registration, tax, labour, residence status and overseas remittance in parallel, deciding the overall order before you begin is the key. The final judgement of which method should apply is made by a qualified professional such as a lawyer or judicial scrivener according to the state of the debts.

In what order do the dissolution/liquidation registration and the Official Gazette notice proceed?

The grounds for dissolution of a stock company are set out in Article 471 of the Companies Act, and dissolution by a shareholders' resolution (a special resolution under Article 309, paragraph 2 of the Companies Act) is common in practice. Once dissolved, the company must be liquidated (Article 475 of the Companies Act), and the liquidator completes current affairs, collects claims, pays debts, and distributes the residual assets. The skeleton of the order is as follows.

1. Resolve to dissolve at a shareholders' meeting and appoint a liquidator (Article 471 of the Companies Act)
2. Register the dissolution and register the liquidator (judicial scrivener)
3. Give public notice in the Official Gazette that creditors should state their claims within a certain period, and separately demand of each known creditor. This period may not be shorter than two months (Article 499 of the Companies Act)
4. After the period for stating claims passes, pay the debts and distribute the remaining assets (residual assets) to the shareholders
5. When liquidation affairs are finished, prepare a settlement report and obtain the approval of the shareholders' meeting (Article 507 of the Companies Act). With approval, liquidation concludes, and the conclusion of liquidation is registered (judicial scrivener)

The Official Gazette notice under Article 499 of the Companies Act is a procedure to protect creditors, and the period for stating claims must be two months or more. Because of this period, it takes at least several months from deciding on dissolution to the conclusion of liquidation, even when things go smoothly. Registration (dissolution, liquidator, conclusion of liquidation) is for a judicial scrivener.

What happens to the residence status of a manager who came to Japan on a Business Manager status after withdrawal?

The Business Manager residence status presumes activities of managing or administering a business in Japan. When you wind up the company and stop the business, the basis for those activities is lost, so maintaining the residence status as it is becomes impossible in principle. The options after withdrawal are divided as follows by the individual review of immigration (the Immigration Services Agency).

• If you continue another business or employment in Japan, apply for a change to the residence status that corresponds to it
• If you leave Japan, switch to the residence status for departure preparation (Designated Activities) while liquidation procedures or preparations for departure remain, and then leave

The period of the Designated Activities for departure preparation, and whether a change is permitted, are judged by immigration according to the progress of liquidation, whether residual work remains, and the individual circumstances. When the residence period is approaching but liquidation is not finished, or when there are several officers whose treatment differs, early confirmation is needed. Preparation of the application for a change of residence status or a switch to Designated Activities is handled by an administrative scrivener, and if the business is licensed, submission of the notification of abolition is also the administrative scrivener's role. The final grant or refusal is judged by immigration after its review.

What are the tax and foreign-exchange points when remitting the residual assets to the home country?

In liquidation, a tax return such as corporation tax is required for the business year up to the day of dissolution, each business year during liquidation thereafter, and the business year in which the residual assets are confirmed (the Corporation Tax Act). When distributing and remitting the residual assets to the shareholders (such as the home-country parent company), a tax organisation is essential, including whether withholding (taxation of deemed dividends, etc.) is required. The calculation of the tax and the filing are the role of a tax accountant.

For overseas remittance, under Article 55 of the Foreign Exchange and Foreign Trade Act (report of payments, etc.), when a resident or the like makes a certain payment toward a foreign country, a report is required except in cases prescribed by Cabinet Order. In practice, a report of payments routed through a bank or the like is made via the Bank of Japan, and payments exceeding a certain amount (payments exceeding the equivalent of 30 million yen) are treated as subject to the report (accessed 2026-10-30). Because the amount standard and the submission deadline are set by Cabinet Order and notification and the operation also changes, confirm the specific necessity at the time of remittance with the latest guidance of the financial institution and the Bank of Japan.

Item	Who handles / where to confirm
Tax returns for each liquidation business year and the residual-asset-confirmation business year; whether withholding is required	Tax accountant
Execution of the overseas remittance of the residual assets	Financial institution
Report of payments, etc. (Article 55 of the Foreign Exchange and Foreign Trade Act)	Confirm the necessity with the latest guidance of the financial institution and the Bank of Japan

Because tax and remittance change in conclusion with the amount and the application of withholding, this article stays with information on the framework of the system and does not judge any specific tax amount or whether a remittance is possible.

Who is assigned the liquidation registration, residence status, tax, and remittance?

Because the withdrawal of a Japanese company involves several procedures moving at once, it proceeds with the roles divided.

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• Application for a change of residence status or a switch to departure preparation (Designated Activities); notification of abolition of licences → Yotsuba Administrative Scrivener Office (administrative scrivener). We provide materials and information only and do not make specific legal judgements
• Registration of dissolution, of the liquidator, and of the conclusion of liquidation → judicial scrivener
• Tax returns for the liquidation business years and the residual-asset-confirmation business year; withholding and deemed-dividend tax → tax accountant
• Dismissal notice to employees; loss-of-qualification procedures for social insurance and labour insurance → labour and social security attorney
• Execution of the overseas remittance of residual assets and the report under the Foreign Exchange Act → financial institution
• Special liquidation or bankruptcy in insolvency, and disputes with creditors → lawyer
• Sale of company-owned real estate such as the head-office building → Yotsuba Real Estate Co., Ltd. (licensed real estate broker), a separate business

Registration of dissolution, of the liquidator, and of the conclusion of liquidation is for a judicial scrivener; the liquidation tax returns and withholding tax for a tax accountant; dismissal notice and loss of social-insurance qualification for a labour and social security attorney; and special liquidation or bankruptcy in insolvency and disputes with creditors for a lawyer, each contracting separately as an independent business. The sale of company-owned real estate is handled by Yotsuba Real Estate Co., Ltd., a separate business from Yotsuba Administrative Scrivener Office, under a separate contract as an independent business. Each field is on the premise that you contract separately with each counter or qualified professional, and our office receives no referral fee. Because withdrawal has a bearing on the residence period and filing deadlines, consult us from the stage of deciding the order. For the flow of engagement, see Engagement Flow; for fees, see Fee Schedule; and for the scope of work, see Scope of Services. For the entry/establishment side, see Registration of a Japanese branch or foreign company of a Taiwanese company, Business Manager residence status and company formation, and, for continuity of business at renewal, Business Manager renewal and proving the continuity of the business.

FAQ

Q. What do we start with to wind up our Japanese subsidiary?
A. First, determine whether all debts can be paid in full (ordinary liquidation, or special liquidation or bankruptcy if insolvent). For ordinary liquidation, start with the shareholders' resolution to dissolve and the appointment of a liquidator (Article 471 of the Companies Act), then proceed to registration of dissolution, public notice to creditors in the Official Gazette and individual demands (Article 499 of the Companies Act), payment of debts and distribution of residual assets, and approval of the settlement report and conclusion of liquidation (Article 507 of the Companies Act). Because registration, tax, labour, residence status and remittance move at once, it is important to decide the order before you begin.

Q. How long must the Official Gazette notice period be?
A. A liquidating stock company must give public notice in the Official Gazette that creditors should state their claims within a certain period, and separately demand of each known creditor. This period may not be shorter than two months (Article 499 of the Companies Act). Because of this period, it takes at least several months from dissolution to the conclusion of liquidation, even when things go smoothly. The notice adds that creditors who do not state their claims within the period are excluded from the liquidation.

Q. Does the Business Manager residence status lapse when we wind up the company?
A. Because the Business Manager status presumes activities of managing or administering a business, winding up the company loses its basis, and maintaining it as it is becomes impossible in principle. If you continue another activity in Japan, immigration reviews a change to the corresponding residence status; if you go home, a switch to Designated Activities for departure preparation. Because the residence period and the grant or refusal depend on the progress of liquidation and the individual circumstances, confirm early with an administrative scrivener and immigration.

Q. What should we watch for when remitting the residual assets to the home country?
A. A tax return such as corporation tax is required for each business year during liquidation and the business year in which the residual assets are confirmed, and distribution involves whether withholding (taxation of deemed dividends, etc.) is required (the Corporation Tax Act). The calculation and filing of the tax are the role of a tax accountant. Overseas remittance may be subject to the report of payments under Article 55 of the Foreign Exchange and Foreign Trade Act, and payments exceeding a certain amount are treated as subject to it. Confirm the specific necessity at the time of remittance with the latest guidance of the financial institution and the Bank of Japan.

Sources (Primary Information)

• e-Gov Law Search, "Companies Act" (Act No. 86 of 2005), Article 471 (grounds for dissolution of a stock company), Article 475 (causes for the start of liquidation), Article 499 (public notice to creditors, etc. = public notice in the Official Gazette to state claims within a certain period, and individual demand of known creditors; the period may not be shorter than two months), Article 507 (completion of liquidation affairs; the settlement report and approval of the shareholders' meeting), and Article 309, paragraph 2 (special resolution of the shareholders' meeting) (accessed 2026-10-30)
• e-Gov Law Search, "Foreign Exchange and Foreign Trade Act" (Act No. 228 of 1949), Article 55 (report of payments, etc. = when a resident or non-resident makes a payment, etc. from Japan toward a foreign country, a report is required except in cases prescribed by Cabinet Order; a report of payments routed through a bank, etc. is made via that bank, etc.) (accessed 2026-10-30)
• Guidance of a public body that, for the report of payments under Article 55 of the Foreign Exchange Act, when routed through a bank or the like the report is made via the Bank of Japan, and payments exceeding a certain amount (payments exceeding the equivalent of 30 million yen) are treated as subject to the report (confirm the specific amount standard and submission deadline with the Cabinet Order, notification, and the latest FAQ of the Bank of Japan) (accessed 2026-10-30)
• Tax returns under the Corporation Tax Act for the dissolution/liquidation business years and the residual-asset-confirmation business year (the specific tax amount, filing deadline, and application of withholding are judged individually by a tax accountant) (accessed 2026-10-30)

This article is general information and does not guarantee or judge the choice of liquidation method, the grant or refusal of a change of residence status or a switch to departure preparation, the content of tax returns, or whether a report on overseas remittance is required. Because procedures and amount standards differ by case and the Act, Cabinet Order and notifications are amended, always confirm with the latest provisions, a professional's individual judgement, and the latest guidance of immigration, financial institutions and the Bank of Japan. Registration of dissolution and liquidation is for a judicial scrivener, liquidation tax for a tax accountant, employee labour matters for a labour and social security attorney, special liquidation or bankruptcy in insolvency and disputes with creditors for a lawyer, and the sale of company-owned real estate for Yotsuba Real Estate Co., Ltd. (licensed real estate broker), a separate business, each as an independent business under separate contracts and procedures. Our office receives no referral fee. Specific legal judgements are made by a qualified professional such as an administrative scrivener after a meeting. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.