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Dissolution of FDI enterprise in Vietnam

Currently, Foreign Investors are investing grow up business in our country more and more powerful. However, due to some reasons, foreign investors want to terminate operating in Viet Nam; then foreign investors have to implement a dissolution procedure. Dissolution procedure with the company with foreign capital was stipulated in detail in The Law On Investment 2020 and The Law On Enterprise 2020. With practical experience in this field, Viet An Law Firm always assists Clients with quick procedures and reasonable fees.

Dissolution of FDI enterprise in Vietnam

Conditions for dissolution FDI (Foreign Direct Investment) company

  • The operating period specified in the company's charter expires without an extension decision;
  • The enterprise is dissolved under a resolution or decision of the Board of Members and the owner (for limited liability companies);
  • The Certificate of Enterprise Registration is revoked unless otherwise prescribed by the Law on Tax administration;
  • A company may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. The relevant manager and the enterprise are jointly responsible for the enterprise’s debts;
  • Company with foreign capital established to manage an investment project but the investment project is subject to termination of the operation.

Sequence, dissolution procedure FDI company

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

  • The company will submit the decision to terminate the operating of the investment project (attached Investment registration certificate) to the Investment registration authority within 15 days from the date of the decision.
  • The estimated time to complete the termination of the investment project is 15 working days from the date of submitting valid documents

Step 2: Approval dissolution decision company

Dissolution decision of FDI company includes the following contents:

  • Company’s name and headquarters address;
  • Reasons for dissolution;
  • Time limit and procedures for finalization of contracts and payment of the enterprise’s debts; payment term debt, liquidation of contracts must not exceed 06 months;
  • Plan for settlement of obligations under employment contracts;
  • Full name, the signature of Legal Representative of the company.

 Step 3: Announcement of dissolution decision FDI company

Within 07 working days from the date of approval Dissolution decision, the company has to send the Decision to States agency as follows:

  • Send the announcement, decision, and valid copy of a copy of the minutes of the meeting of the Board of Members/ General Meeting of Shareholders to the Business Registration Office to complete the procedures for announcing the dissolution decision on the National Enterprise Registration Portal.
  • Send the dissolution decision and meeting minutes to the tax authority and the company’s employees
  • Posting the dissolution decision at the company’s headquarters, branches, and representative offices (if any).
  • In case the enterprise still has unpaid debts, a decision and the debt payment  plan shall be sent to the creditors and persons with related rights, obligations, and interest

Step 4: The company will implement liquidating its assets

Step 5: Implementing the procedure to close the FDI company tax code

The company sends an official letter to the tax authorities (attached with a notarized copy of the Business Registration Certificate and the Tax Registration Certificate) to request tax finalization and tax identification.

Step 6: Procedures for submitting the notice of dissolution to the Business registration authorities.

Within 7 days from the date of payment of all debts of the company, the legal representative of the company must send the dissolution registration documents to the provincial Business registration authorities where the company's headquarters is located or through the National Business Registration Portal at dangkykinhdoanh.gov.vn.

Documents for dissolution of FDI company includes the following as:

  • The notification of the company’s dissolution;
  • The report on liquidation of the enterprise’s assets; list of creditors and paying debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any)

Time to dissolve FDI company

  • Procedure time: after 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.
  • The time limit for settlement: Within 05 working days from the date of receiving documents for dissolution, the business registration authority shall update the enterprise’s status on the national enterprise registration database;

Notes on the dissolution of FDI company

  • In case the company uses the seal issued by the police agency, the company have to return the seal, the certificate of seal sample registration to the police office to be issued a certificate of seal withdrawal
  • The company checks and closes the foreign direct investment capital account during the dissolution of the company
  • Investors liquidate their own investment projects under the law on asset liquidation when the investment project terminates its operation. Except for cases where the handling of land use rights and land-attached assets shall comply with the provisions of the land law and other relevant laws.
  • In case the company have many investment projects when terminating one of the investment projects, only procedures for terminating the operation of the investment project shall be carried out without implementing procedures for dissolution

Some questions related to the dissolution of the FDI company

What is sequence are the debts of an FDI company paid upon dissolution?

The company’s debts shall be paid in the following order of priority:

  • Unpaid salaries, severance pay, social insurance, health insurance, unemployment insurance premiums, and other benefits of employees under the collective bargaining agreement and concluded employment contracts;
  • Tax debts;
  • Other debts.

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

After fulfilling financial obligations to the State of Vietnam following the law, foreign investors may remit overseas assets that are liquidation of investment projects;

When dissolving an FDI company, do the company has to carry out procedures to terminate the operation of branches, representative offices, and business locations of the company?

Before the FDI company implementing the dissolution procedures, it’s necessary to complete the procedures for terminating the operation of branches, representative offices, and business locations under the company.

The company has not separated the Certificate of Business Registration but the business registration contents still operate according to the Investment Certificate, upon dissolution, what procedures must be implementing?

In case the Business Registration Certificate has not been separated, before carrying out the dissolution procedures, the enterprise must issue and change it to the enterprise registration certificate first. Then do the dissolution steps as mentioned above.

Service of dissolution of FDI company of Viet An Law Firm

  • Consulting on issues arising when dissolving FDI company: posting the dissolution announcement, closing accounts, finalizing social insurance, tax finalization, confirming customs obligations, closing tax codes, return seals, send a notice requesting to delete the name of the company, to terminate the operation of the investment project, etc.Soạn thảo hồ sơ giải thể doanh nghiệp phù hợp với yêu cầu của khách hàng và quy định của pháp luật có liên quan;
  • Proposing termination of tax identification numbers and tax finalization for business dissolution, carrying out procedures with tax authorities to close tax identification numbers for businesses
  • Implementing return seals;
  • Submit dissolution documents to update the dissolution legal status of the company in the National Business Registration Database
  • Completing other legal documents according to the actual operation of the business

Viet An Law is always ready to exchange and assists customers with the necessary information to open a company in Vietnam or terminate a company in Vietnam. Please contact Viet An Law Firm for specific consultancy.

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