How to Suspend or Dissolve a FDI Enterprise in Vietnam

I. Suspending an Enterprise in Vietnam

1. Purpose: Suspension allows you to temporarily put your business on hold without permanently closing it.

2. Common Scenarios:

- Moving overseas temporarily.

- Focusing on other projects.

- Uncertainty about business traction.

3. Advantages:

Relieves the company from most tax and compliance obligations.

4. Procedure:

- Legal representative notifies the local Department of Planning and Investment at least 3 business days before the proposed suspension date.

- A template form is available for this purpose.

- Suspension is often approved for a maximum of 1 year, extendable for another year.

- After that, reactivate or permanently close the company.

II. Dissolution of Enterprise in Vietnam

1. Legal Grounds:

Expiry of the operating period mentioned in the company’s charter or license.

Written decision or resolution by company owners to close.

Failure to update company type after adding/removing members for six consecutive months;

2. Steps:

A. Terminating operation of a company:

(i) Finalize and pay all tax and financial obligations, settle personal income tax, social insurance, and health insurance for employees

(ii) Obtain a confirmation letter from relevant authorities.

(iii) Deregister the company.

 1. A resolution or decision on the dissolution is issued. Such a resolution or decision shall contain the following information:

a) The enterprise’s name and headquarters address;

b) Reasons for dissolution;

c) Time limit and procedures for finalization of contracts and payment of the enterprise’s debts;

d) Plan for settlement of obligations under employment contracts;

dd) Full name and signature of the owner of the sole proprietorship, the company’s owner, the President of the Board of Members, the President of the Board of Directors;

2. The owner of the sole proprietorship, the Board of Members or the owner, the Board of Directors, directly organizes the liquidation of the enterprise’s assets, unless the company's charter requires establishment of a separate liquidation organization; Within 07 working days from the ratification date, the resolution or decision on dissolution and the minutes of the meeting shall be sent to the business registration authority, tax authority and the enterprise’s employees. The resolution or decision shall be posted on the National Enterprise Registration Portal, displayed at the enterprise’s headquarters, branches and representative offices.

3. If the enterprise still has unpaid debts, the resolution or decision and the debt payment plan shall be sent to the creditors and persons with related rights, obligations and interest. The debt payment plan shall contain the creditors’ names, debts, repayment time, location and method; method and time limit for settling creditors’ complaints;

4. The business registration authority shall post a notification that an enterprise is undergoing dissolution, the dissolution resolution or decision and debt payment plan (if any) on the National Enterprise Registration Portal right after the resolution or decision is received (if any);

5. An enterprise’s debts shall be paid in the following order of priority:

a) 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;

b) Tax debts;

c) Other debts;

6. After the dissolution costs and debts have been fully paid, the remainder shall be divided among the owner, members/partners, and shareholders in proportion to their stakes/shares;

7. The enterprise’s legal representative shall apply for dissolution to the business registration authority within 05 working days from the day on which the enterprise’s debts are fully paid;

B. Terminating the Foreign Project:

An investor shall terminate their investment activities and/or investment project in the following cases:

a) The investor decides to terminate the project;

b) The project has to be terminated according to the conditions set out in the contract or charter of the enterprise;

c) The project duration is over.

Investor shall send the termination decision to the investment registration authority within 15 days from the date of making the decision together with the investment registration certificate.

This process takes from 20-30 working days.

Seeking professional advice during this process is crucial. Closing a business is a significant decision, and understanding the legal requirements ensures a smooth transition. If you have any further questions, feel free to ask.

 

This information contained herein is of a general nature and is intended to provide updates on the Laws for information purposes only. DB Legal shall not be liable for any use or application of the information for any business purpose.

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