Dissolution of FDI enterprise in Vietnam

Currently, foreign investors are developing their business in our country more and more strongly. However, for some reason, if foreign investors want to terminate their operations in Vietnam; then they must carry out dissolution procedures. Dissolution procedures for FDI companies are specified in detail in the Investment Law 2020 and the Enterprise Law 2020. With practical experience in this field, Viet An Law is always ready to support clients in the dissolution of a FDI company in Vietnam with quick procedures and reasonable costs.

Conditions for dissolution of FDI enterprises

Belong to one of the following cases:

• The term of operation stated in the Company Charter ends without a decision to extend;
• According to the resolution, the decision of the company owner for the limited liability company
• Enterprise Registration Certificate is revoked, except in cases where the Law on Tax Administration provides otherwise.
• A foreign-invested enterprise is established to manage an investment project that is subject to termination of operations.

Condition

An enterprise can only be dissolved when it ensures that all debts and other financial obligations are paid and is not in the process of resolving disputes at Court or Arbitration. The relevant manager and the enterprise are jointly responsible for the debts of the enterprise.

Procedures for dissolution of a FDI company in Vietnam

Step 1: Terminate the investment project and return the investment registration certificate

• The Company shall send the decision to terminate the investment project (attached with the Investment Registration Certificate) to the Investment Registration Authority within 15 days from the date of the decision.
• Estimated time for completion of investment project termination is 15 working days from the date of submission of valid documents.

Step 2: Pass the decision to dissolve the enterprise

The decision to dissolve an FDI company includes the following contents:

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

Step 3: Publish the decision to dissolve the FDI company

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

• Send the Notice, Decision, and valid copy of the Minutes of the Board of Members/General Meeting of Shareholders to the Business Registration Office to carry out the procedure of announcing the dissolution decision on the national information system on business registration.
• Send the Dissolution Decision and Meeting Minutes to the tax authority and employees in the enterprise;
• Post the Dissolution Decision at the head office, branches, and representative offices (if any) of the enterprise.
• In case the enterprise still has unpaid financial obligations, it must send along with the Dissolution Decision a debt settlement plan to creditors and persons with related rights and obligations.

Step 4: Liquidation of corporate assets

The minutes of asset liquidation must be made in writing to be submitted with the dissolution notice.

Step 5: Close the FDI company tax code

Enterprises send an official dispatch to the tax authority (with notarized copies of the Enterprise Registration Certificate and Tax Registration Certificate) to request tax settlement and tax code closing.

Step 6: Procedure for submitting dissolution notification to the business registration authority

Within 7 days from the date of payment of all debts of the company, the legal representative of the company must submit the dissolution registration dossier to the provincial business registration authority where the company has its head office or through the National Business Registration Portal at dangkykinhdoanh.gov.vn.

The dossier for dissolving an FDI enterprise includes the following documents:

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

Time to dissolve FDI company

• Implementation time: 180 days from the date of sending the dissolution decision to the Department of Planning and Investment if there is no objection from the parties.
• Processing time: Within 05 working days from the date of receiving the dissolution dossier, the Business Registration Authority shall update the legal status of the enterprise on the National Database on Business Registration;

Notes when dissolving FDI enterprises

• In case an enterprise uses a seal issued by a police agency, the enterprise shall return the seal and the Certificate of Seal Sample Registration to the police agency to be issued a Certificate of Seal Revocation.
• Enterprises check and close foreign direct investment capital accounts during the process of enterprise dissolution;
• Investors shall liquidate their investment projects following the provisions of the law on liquidation of assets when the investment project terminates its operation, except for the case of handling land use rights and assets attached to land when the investment project terminates its operation following the provisions of law on land and other relevant provisions of law.
• In case an enterprise has many investment projects when terminating one of the investment projects, it only needs to carry out procedures to terminate the investment project without carrying out procedures to dissolve the enterprise.

Some questions related to the dissolution of FDI enterprises

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

The company’s debts are paid in the following order:

• Debts of wages, severance pay, social insurance, health insurance, unemployment insurance as prescribed by law, and other benefits of employees according to collective labor agreements and signed labor contracts;
• Tax debt;
• Other debts.

When dissolving an FDI company, can liquidated assets be transferred back to the country?

After fully performing financial obligations to the State of Vietnam by the provisions of law, foreign investors are allowed to transfer abroad assets that are liquidation proceeds of investment projects;

When dissolving an FDI company, do we have to carry out procedures to terminate the operations of the company’s branches, representative offices, and business locations?

Before an FDI company carries out dissolution procedures, it must carry out procedures to terminate the operations of branches, representative offices, and business locations affiliated with the company.

What procedures must be followed when dissolving a company that has not separated its Enterprise Registration Certificate but whose business registration content is still operating under the Investment Certificate?

In case the Enterprise Registration Certificate has not been separated, before carrying out the dissolution procedure, the enterprise must be issued a new Enterprise Registration Certificate first. Then follow the dissolution steps as instructed above.

Dissolution of a FDI company in Vietnam service by Viet An Law Firm

• Consulting on issues arising when dissolving FDI enterprises: publishing dissolution publications, closing accounts, settling social insurance, settling taxes, confirming customs obligations, closing tax codes, returning stamps, sending notices requesting to delete enterprise names, requesting to terminate investment project activities, etc.
• Drafting business dissolution documents by customer requirements and relevant legal regulations;
• Propose to terminate tax code and tax settlement to dissolve the enterprise, carry out procedures with tax authorities to close the tax code for the enterprise;
• Return company stamp;
• Submit dissolution documents to update the legal status of dissolution of the enterprise in the National Database on Business Registration.
• Complete other legal documents according to the actual operations of the business.

Viet An Law is always ready to discuss and support customers with necessary information related to the procedures for dissolving FDI enterprises. Please contact Viet An Law for specific advice.