How to close an overseas company that is no longer needed? A look at striking off, dissolution, liquidation, and post-closure matters.
When an overseas company is no longer needed, the worst thing is to 'leave it unattended'. Stopping annual fee payments usually leads to the registry 'striking off' the company, but striking off does not mean debts or liabilities are extinguished, and assets may be frozen while directors remain at risk. Formal closure should involve 'voluntary liquidation/dissolution', closing accounts, final filings, and home country (Taiwan CFC/AMT) filings. Below explains the differences and steps, with official sources.
Why you cannot simply 'stop paying fees' and let it go
Many assume that if a company is no longer needed, they can simply stop paying annual fees and let it disappear naturally—this is a high-risk approach. Most offshore registries impose penalties for non-payment and then 'strike off' the company. During the struck-off period, company assets (including bank account balances) may be frozen or even escheat to the local government, and directors and shareholders may not be relieved of prior obligations. Restoring the company or disposing of assets later becomes more difficult. The correct approach is to proactively and procedurally close the company.
Difference between striking off and voluntary liquidation
Both remove the company from the register, but they differ in nature. 'Striking off' is the registry removing an inactive or non-compliant company; the process is simple but often leaves unresolved liabilities and asset ownership issues. 'Members' voluntary liquidation' involves a liquidator formally settling debts, distributing remaining assets, and then applying for dissolution, offering greater protection to shareholders and directors. For companies with assets, ongoing operations, or those seeking a clean exit, formal liquidation is generally recommended over passive striking off. Actual procedures depend on the company law of each jurisdiction.
Source：Singapore ACRA — Striking Off / Winding Up
General Steps for Formal Closure
Common sequence: ① Settle all external liabilities and taxes, cease operations; ② Close bank and payment accounts (preferably while the company is still active, otherwise balances may be difficult to withdraw); ③ Complete final accounting, audit (if required by jurisdiction), and tax filings; ④ Apply for voluntary liquidation or striking off with the registry, obtain dissolution certificate; ⑤ Retain company records for the statutory period after dissolution. Missing account closure or final filings often leads to the most troublesome post-closure issues.
Source：BVI Financial Services Commission
Taiwan-side matters not to overlook: filings for dormant/dissolved companies
For Taiwanese shareholders, a foreign company 'not operating' does not mean no filing obligations. Under the Controlled Foreign Company (CFC) regime, a qualifying low-tax foreign company may be subject to taxation on undistributed earnings. If the company is liquidated, disposes of assets, or distributes residual assets during the year, it may generate foreign-source income subject to the Alternative Minimum Tax (AMT). Before deciding to close, consult a tax professional to confirm Taiwan filing requirements and potential tax liabilities for the year of liquidation, to avoid 'company closed, but taxes not settled'.
Source：Ministry of Finance, Tax Administration (Controlled Foreign Company CFC)
Frequently Asked Questions
What happens if an overseas company does not pay annual fees?
Typically, the registry first imposes penalties, and continued non-payment leads to 'compulsory striking off'. During the struck-off period, company assets (including account balances) may be frozen or escheat to the local government, and unsettled liabilities and responsibilities may not disappear. To close a company, proactively pursue liquidation/dissolution rather than simply stop paying.
After a company is struck off, are its debts automatically extinguished?
No. Striking off merely removes the company from the register; prior debts, taxes, and related liabilities may not be extinguished, and directors in some jurisdictions may still be held accountable. A clean exit typically requires formal liquidation to settle debts before dissolution. Actual rules depend on the company law of each jurisdiction.
What needs to be done to formally dissolve/liquidate an overseas company?
Generally: settle all liabilities and taxes, close bank and payment accounts, complete final accounting and tax filings, apply for voluntary liquidation or striking off with the registry, obtain a dissolution certificate, and retain company records for the statutory period. If the company has assets or ongoing transactions, formal liquidation is recommended over passive striking off.
If a company is dormant and not operating, does it still need to file taxes or returns?
Possibly. Some jurisdictions still require dormant companies to file annual returns or maintain a registered agent. For Taiwanese shareholders, under the CFC rules, a qualifying foreign company may be subject to taxation on undistributed earnings even if it is not operating or distributing dividends. Dormancy does not exempt filing obligations; confirm with a tax professional on a case-by-case basis.
Should bank accounts be closed before winding up the company?
It is advisable to close accounts and withdraw balances while the company is still active and documents are valid. Once the company is struck off or dissolved, accounts may be frozen and balances difficult to recover. Confirm the order of closing accounts and winding up the company with the bank and agent in advance.
Can a company be restored after being struck off?
Some jurisdictions allow an application for 'restoration' within a certain period, but usually require payment of arrears, penalties, and meeting conditions, with significant procedural costs. Rather than restoring later, it is better to proactively and procedurally close the company from the start. Exact restoration rules depend on the registry of each jurisdiction.
Official data sources
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