How to close a foreign-owned company in Vietnam

As for some reasons, a foreign investor wants to wind up his company in Vietnam, he must complete all the procedures for company dissolution in accordance with provisions of the Enterprise Law. As per our expertise in this area, ALB & Partners Law Firm (ALB) shall assist clients in such a prompt, professional and cost-effective manner.

I. Legal bases

• The Law on Enterprises 2020;

• Decree no. 01/2021/ND-CP dated January 04^th, 2021;

• Circular no. 01/2021/TT-BKHDT dated March 16^th, 2021.

II. Terms and Conditions of closing a foreign-owned company (FOC)

Under the prevailing Vietnam’s laws and regulations, the procedures for dissolution of an FOC is the same as a domestic one. Accordingly, clients shall be obliged to comply with the provisions of the Corporate Law, the Investment Law and the Tax Administration Law as well.

For further clarification, the following terms and conditions must be met:

• The company is obliged to fulfill the payment of all debts and other relevant obligations;

• The company is not involved in any dispute at a Court or Arbitration center.

III. Cases where FOC are dissolved

Pursuant to Clause 1, Article 207 of the Enterprise Law 2020, there are explicitly dissolution cases of an FOC, in which:

• 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 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);

• 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;

• The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.

IV. The dissolution procedures

1. ALB shall obtain/ collect information provided by clients

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

2. ALB shall study the case

After study, ALB shall provide clients with legal advice in relation to the dissolution of an FOC.

3. ALB shall represent clients to process notification for 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. ALB shall give legal advice and represent clients to to terminate 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. ALB shall represent clients to work 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.

The licensing 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. ALB shall represent our client to process the registration of the 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).

The licensing authority: Business registration office where the enterprise’s headoffice 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.