Closing your company in Vietnam

After the establishment and operation of your company in Vietnam, but it is not successful and effective and you can not either find any development direction or no longer able to continue the business, besides temporary suspension for a certain period, permanently closing it may be a last resort.

Closing a company is understood as a process leading to termination of its existence when it is ensured to pay all its debts and other property obligations as well as termination of all rights and obligations to that company.

I. Reasons for closure of company:

Pursuant to Clause 1, Article 207 of the Enterprise Law 2020, a company may be dissolved under any of the following circumstances:

1. The operating period specified in the company’s charter expires without an extension decision;
2. The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);
3. The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;
4. The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.

II. Conditions for a company to be closed:

To close the company, the owner must:

• Complete all tax and financial obligations to the government to close the tax code of Company (if any);
• Make payment for all personal income tax, social insurance and health insurance of all employees, and get a certificate for finalizing such actions;
• Liquidate all employment contracts and other contracts such as office leasing contract, the contract with some suppliers; and
• Settle all outstanding debts.

III. Government agencies involved in your company closing:

• Department of Planning and Investment: carry out the procedures for announcing dissolution of company;
• Customs office for customs clearance procedures;
• Social insurance agency to complete the procedures for closing the insurance obligations and closing the insurance books;
• Tax Authority: Carry out the procedures for tax finalization and tax code closure;
• Department of natural resources and environment: if the company has activities affecting environment.
• Other relevant agencies.

IV. The closing procedures

1. Collecting relevant information and documents

Required documents and information include the Investment registration Certificate (IRC), the Enterprise Registration Certificate (ERC), expected dissolution date, reason for dissolution, etc.

2. Studying the case

After study, we shall provide you with legal advice in relation to closing the company.

3. Notifying company’s dissolution.

• Applications including:
• The resolution, decision and meeting minutes in relation to company dissolution.
• Debt settlement plan (if any).
• The licensing authority: Business registration Office where the company’s headquarters is located.
• Completion time: 05 to 07 working days
• Result: Approval on notification on company dissolution.

4.  Terminating the investment project.

• Applications including:
• Decision on termination of the investment project;
• Investment registration certificate.
• The licensing authority: Investment Registration Office where the company’s headquarters is located.
• Completion time: 15 – 20 working days
• Result: Notification on termination of the investment project.

5. Working with tax department

• Applications including:
• An application for closing the tax code;
• Decision on Dissolution of (i) the Company Owner; or (ii) Chairman of the Members’council/ Chairman of the Board of Directors of the Company;
• Accouting books and relevant documents.
• Relevant authority: Tax Division where the company’s headquarters is located.
• Time of completion: Depending on the accounting records of the company. If there are no tax issues related, it usually takes around 6 months.
• Result: Notification on tax clearance.

6. Registering company’s dissolution.

• Applications including:
• Notice of dissolution;
• Report on liquidation of company assets; the list of creditors and the amount of debt paid, including payment of all tax debts and payment of social insurance, health insurance and unemployment insurance for employees after the decision on dissolving the company (if any).
• Relevant authority: Business registration office where the company’s head office is located.
• Completion time: 05 to 07 working days.
• Result: Notice on company dissolution.

Where there is no choice but to close the company, foreign investors must also experience many complicated administrative procedures along with the language barrier. Understanding such concerns, ALB & Partners Law Firm is ready to assist Clients with this kind of service in a quick and cost-effective manner.

Should clients need further assistance in company dissolution service, feel free to contact ALB & Partners Law Firm via email: [email protected] or phone: +84 907008722.