Dissolute a FDI company in Vietnam

Currently, foreign investors are developing business into our country more and more strongly. However, for a number of reasons, foreign investors want to terminate operations in Vietnam; At that time, dissolution procedures must be carried out. Dissolution procedures for foreign-invested company are detailed in the Law on Investment 2020 and the Law on Enterprise 2020. With practical experience in this field, Viet An Law is always ready to support customers with quick procedures and reasonable costs.

 Conditions to dissolute a FDI company in Vietnam

• Finish the operation term stated in the company’s charter without a decision on extension;
• According to the resolution, the decision of the company owner for a limited liability company
• The Certificate of Business Registration shall be revoked , unless otherwise provided for by the Law on Tax Administration.
• An company may only be dissolved when it guarantees payment of all debts and other property obligations and not in the process of settling disputes at Court or Arbitration. The relevant manager and the company are jointly responsible for the debts of the company.
• A foreign-invested company is established to manage an investment project in which such investment project is subject to termination of operation.

Order and procedures to dissolute a FDI company in Vietnam:

Step 1: Termination of the investment project and return the investment registration certificate

• The company shall send the decision on termination of operation of the investment project (enclosed with the Investment Registration Certificate) to the Investment Registration Authority within 15 days from the date of decision.
• The estimated time to complete the termination of the investment project is 15 working days from the date of submission of a valid application.

Step 2: Approve the decision to dissolve the company

The decision on dissolution of an FDI company includes:

• Name and address of the head office of the company;
• Reasons for dissolution;
• Time limit and procedures for contract liquidation and payment of debts of the company; the time limit for debt payment and contract liquidation must not exceed 06 months from the date of adoption of the dissolution decision;
• Plan for handling obligations arising from the labor contract;
• Full name and signature of the legal representative of the company.

Step 3: Announce the decision to dissolve the FDI company

Within 07 working days from the date of adoption of the Dissolution Decision, the company must send the Decision to the following agencies:

• Send the Notice, Decision and a valid copy of the meeting minutes of the Members’ Council/ General Meeting of Shareholders to the Business Registration Office  for procedures for announcing the dissolution decision on the national information system on business registration.
• Send the Dissolution Decision and Meeting Minutes to tax authorities and employees in the company;
• Posting the dissolution decision at the head office, branch, representative office (if any) of the company.
• In case an company still has unpaid financial obligations, it must enclose the Decision on dissolution of the debt settlement plan to creditors, persons with related interests and obligations

Step 4: The company proceeds to liquidate company assets

Step 5: Carry out procedures to close the FDI company’s tax code

The company sends a letter to the tax authority (with a notarized copy of the Business Registration Certificate and Tax Registration Certificate) to apply for tax finalization and tax code closure.

Step 6: Procedures for submitting a notice of dissolution to the company registration authority

Within 7 days from the payment of all debts of the company, the legal representative of the company must send the dissolution registration dossier to the business registration office of the province where the company is headquartered or through the National Business Registration Portal at dangkykinhdoanh.gov.vn address.

A dossier of dissolution of an FDI company includes the following papers

• Notice of company dissolution;
• Report on liquidation of company assets; List of creditors and paid debts, including payment of all tax debts and debts for social insurance, health insurance, unemployment insurance contributions for employees after deciding to dissolve the company (if any).

Time of dissolution of FDI company

• Implementation time: after 180 days from the date of sending the dissolution decision to the Department of Planning and Investment if there is no objection of the parties.
• Time limit for settlement: Within 05 working days from the date of receipt of the dissolution dossier, the business registration agency shall update the legal status of the company on the National Business Registration Database;

Notes when dissolving FDI company in Vietnam

• In case an company uses a seal issued by a Public Security agency, the company shall return the seal and the Certificate of registration of the seal sample to the Public Security agency for issuance of the Certificate of revocation of the seal.
• The company examines and closes the foreign direct investment capital account in the process of company dissolution;
• Investors shall self-liquidate investment projects in accordance with the law on asset liquidation when the investment project terminates its operation, except for the case of handling land use rights and land-attached assets upon termination of operation of the investment project in accordance with the provisions of land law and other relevant laws official.
• In case an company has many investment projects, upon termination of one of the investment projects, only carry out procedures for termination of operation of the investment project without carrying out procedures for dissolution of the company.

Some questions related to the dissolution of FDI company

In what order are the debts of FDI company paid upon dissolution?

The debts of the company are paid in the following order:

• Arrears of salary, severance allowance, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under collective labor agreements and signed labor contracts;
• Tax liabilities;
• Other debts.

When dissolved, can FDI company transfer liquidated assets to the country?

After fulfilling all financial obligations to the Vietnamese State as prescribed by law, foreign investors may transfer abroad assets that are liquidators of investment projects;

When dissolving an FDI company, do you have to carry out procedures for termination of operation of branches, representative offices and business locations of the company?

Before FDI company carry out dissolution procedures, it is necessary to carry out procedures for termination of operation of branches, representative offices and business locations under the company.

What procedures must a company that has not separated its own Business Registration Certificate, but the business registration content still operates under the Investment Certificate when dissolved?

In case the Certificate of Business Registration has not been separated, before carrying out dissolution procedures, the company must issue and change it to the Certificate of Business Registration first. Then follow the dissolution steps as instructed above.

Service of dissolution of FDI company of Viet An law firm

• Advising on issues arising when dissolving FDI company: posting announcement of dissolution, account closure, social insurance finalization, tax finalization, confirmation of customs obligations, paying tax codes, paying stamps, sending notices of application for deletion of company names, application for termination of investment project operations, etc …
• Drafting dossiers of company dissolution in accordance with customer requirements and relevant laws;
• Proposing to terminate the tax code and tax finalization to dissolve the company, carry out procedures with the tax administration agency to close the tax code for the company;
• Pay company stamps;
• File for dissolution to update the legal status of dissolution of the company in the National Business Registration Database.
• Complete other legal documents according to the actual operation of the business.

Viet An Law Firm is always ready to exchange and support customers with necessary information related to procedures for dissolution of FDI company. Please contact  Viet An Law Firm  for specific advice.