Dissolution of foreign trader’s representative office in Vietnam

Representative office of foreign trader shall perform the functions of liaison office, market research, promotion and promotion of business investment opportunities of foreign trader in Vietnam. Representative office are obliged in accordance with the provisions of Vietnam Commercial Law. Therefore, in case of termination of operation, foreign trader shall carry out procedures for closure, also known as dissolution of representative office in accordance with Vietnamese law.

Legal bases

• Commercial Law 2005;
• Decree 07/2016/ND-CP details the Commercial Law on Representative Office and Branches of Foreign Trader in Vietnam.

Cases of dissolution of representative office of foreign trader in Vietnam

• At the request of foreign trader;
• When a foreign trader terminates its operation in accordance with the laws of the country or territory where such trader establishes or registers its business;
• Exceeding the operation term of 05 years under the license for establishing a representative office,  the foreign trader does not apply for extension or is not agreed to extend by the management agency;
• The license for establishing a representative office is revoked;
• Foreign trader, representative office and branches no longer satisfy one of the conditions for establishment license in Vietnam (as prescribed in Article 7 of Decree 07/2016/ND-CP).

Dossier of closure/dissolution of representative office of foreign trader in Vietnam

• Notice of termination of operation of a representative office according to the form of the Ministry of Industry and Trade signed by a competent representative of a foreign trader;
• List of creditors and outstanding debts, including tax debts and social insurance premiums;
• List of employees and current corresponding benefits of employees;
• Original Representative Office Establishment License
• A copy of the document of the Licensing Authority not to renew the license for establishment of a representative office or a copy of the decision on revocation of the license for establishment of a representative office (in case of non-renewal of the license)

Order and procedures for dissolution of representative office of foreign trader in Vietnam

Step 1: Make a decision to terminate the operation and pay obligations to the employee

Foreign trader shall issue decisions to terminate the operation of representative office, notify employees and settle labor regimes with office employees.

Step 2: Carry out procedures for invalidation of the tax code of the representative office

A dossier of invalidation of the tax code includes:

• A written request for invalidation of the tax code;
• Decide to terminate the operation of a representative office for the above reasons;
• A copy of the license for operation of a representative office, a copy of the tax code notice of the representative office.

The tax authority shall finalize the tax of the representative office and finalize the personal income tax for the head of the foreign representative office and employees working at the representative office.

Step 3: Close the bank account of the representative office

After the tax authority finalizes and issues a document to terminate the validity of the tax code of the representative office, the representative office shall close the opened bank account.

Step 4: Make a stamp return at the provincial/city police office.

A representative office return dossier includes:

• Letter of return of the Representative Office;
• Seal of the Representative Office;
• Certificate of registration of seal sample;
• A copy of the license for operation of a representative office;
• Decide to terminate the operation of a representative office for the above reasons;
• A copy of the Written termination of the validity of the tax code of the tax authority;

Time for stamp return procedures

The police agency shall receive the stamp return dossier and issue a Notice of cancellation of the seal by the representative office within 3-5 working days.

Step 5: Submit the application for termination of operation of the direct representative office at the management agency

Time for processing dossiers of termination of operation of representative office

Within 05 working days from the date of receipt of a complete and valid dossier, the agency issuing the operation license of the foreign trader’s representative office shall announce on its website the termination of operation of the representative office.

Note when closing/dissolving representative office of foreign trader in Vietnam

• State agencies shall not issue written confirmations of termination of operation of representative office, but shall announce on their websites the termination of operation of representative office.
• Foreign trader and representative office must publicly post the termination of operation at the head office of the representative office and perform other obligations as prescribed by law when the representative office terminates its operation.
• During the closure of the representative office, the tax authority shall inspect and finalize the tax, in case the representative office incurs violations, it will have to pay the full amount of tax and penalties if any before issuing a notice of invalidation of the tax code.

Some questions related to the procedure for dissolution of representative office of foreign trader in Vietnam

Upon termination of operation, does a representative office have to carry out tax finalization procedures?

Before submitting the application for termination of operation, the representative office of the foreign trader must submit an application for invalidation of the tax code and carry out tax finalization procedures, and the tax authority will finalize personal income tax for the head of the representative office and employees.

Where to file for termination of the foreign trader’s representative office?

• Department of Industry and Trade in case the head office of a representative office has an address outside industrial parks, export processing zones, delicate zones and high-tech parks.
• Management boards of industrial parks, export processing zones, economic zones and hi-tech parks (hereinafter collectively referred to as Management Boards) in case representative office are located in industrial parks, export processing zones, economic zones or hi-tech parks.

Is there a fee to terminate the operation of a representative office?

According to current legal provisions, procedures for termination of operation of representative office of foreign trader shall not be subject to state fees.

Competence to sign dossiers of termination of representative office of foreign trader?

Foreign trader shall sign termination dossiers and shall have to implement or authorize to complete procedures for termination of operation of representative office in Vietnam.

If you want to consult, use the service of dissolving foreign representative office, please contact  Viet An Law Firm for specific advice.