Dissolving a foreign-invested enterprise (FDI) in Vietnam is a complex process that requires businesses to fully comply with legal regulations to avoid risks and legal liabilities. Understanding the procedures, documentation, and related obligations will help businesses carry out the dissolution process smoothly and in accordance with regulations. DNP Vietnam Law Firm will provide FDI enterprises with the order, documents, and procedures for dissolving businesses in Vietnam.
1. Concept of Business Dissolution:
Business dissolution is the termination of operations and existence of a business, ending its legal status and related rights and obligations in the economic market. After a company declares dissolution, it is no longer allowed to operate or conduct business under the company’s name.
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2. Cases of Business Dissolution:
Legal Basis: Clause 1, Article 207 of the Enterprise Law 2020
Accordingly, FDI enterprises can be dissolved for one of the following reasons:
a) The operating term stated in the company’s charter expires without a decision to extend it;
b) According to the resolution or decision of the private enterprise owner, the members’ council for a partnership company, the members’ council or the company owner for a limited liability company, or the general meeting of shareholders for a joint-stock company;
c) The company no longer has the minimum number of members as prescribed by the Enterprise Law for each type of business for a continuous period of 6 months without carrying out procedures to convert the type of enterprise;
d) The business registration certificate is revoked, except where otherwise provided by the Law on Tax Administration.
3. Conditions for Business Dissolution:
Legal Basis: Clause 2, Article 207 of the Enterprise Law 2020.
When dissolving, foreign-invested companies must meet the following conditions:
- Firstly, FDI enterprises may only proceed with dissolution when they ensure full payment of all debts and other property obligations.
- Secondly, they must not be in the process of resolving disputes at a Court or Arbitration body.
- Finally, in cases where the business registration certificate has been revoked, the related managers and the FDI enterprise must take responsibility. They are jointly liable for the company’s debts.
4. Dossier for Business Dissolution:
Legal Basis: Clause 1, Article 210 of the Enterprise Law 2020
- Firstly, a notice of business dissolution (Appendix II-22 issued together with Circular No. 01/2021/TT-BKHĐT) must be submitted.
- Secondly, a report on the liquidation of the company’s assets is required.
- Thirdly, a list of creditors and paid debts must be provided. This includes the full payment of tax debts. In addition, it must include debts for social insurance, health insurance, and unemployment insurance for employees. These payments, if applicable, must be made after the decision to dissolve the business.
5. Order and Procedures for Business Dissolution:
5.1 Voluntary Dissolution of Enterprises
In Cases Specified in Points a, b, and c, Clause 1, Article 207 of the Enterprise Law:
Legal Basis: Article 208 of the Enterprise Law 2020, Article 70 of Decree No. 01/2021/ND-CP.
| Step | Content | Details |
| Step 1 | Making a dissolution decision | – The Members’ Council, General Meeting of Shareholders, or company owner issues a decision on business dissolution. – The content of the dissolution decision must fully state: Name and head office address of the enterprise; reasons for dissolution; deadline and procedures for liquidating contracts and paying debts; liquidation period (not exceeding 6 months from the date of the decision). – The dissolution decision must be sent to the business registration agency, tax agency, employees, and publicly posted at the head office. |
| Step 2 | Liquidating assets and paying obligations | – The enterprise establishes an asset liquidation team (unless otherwise stipulated in the company’s charter). – Perform payment of obligations such as: salaries, social insurance, tax debts, credit debts, other loans (in the order prescribed in Clause 5, Article 208 of the Enterprise Law 2020). |
| Step 3 | Submitting the dissolution dossier | – Before submitting the dossier for business dissolution registration, the enterprise must carry out procedures to terminate the operation of its branches, representative offices, and business locations at the Business Registration Office where the branches, representative offices, and business locations are located (Clause 4, Article 70 of Decree No. 01/2021, Article 213 of the Enterprise Law 2020) – After completing asset liquidation and financial obligations, the enterprise submits the dissolution dossier to the Business Registration Office where it is registered. – The dossier includes: + Notice of dissolution (Form II-22 of Circular No. 01/2021/TT-BKHĐT); + Minutes of meeting/Decision on dissolution; + Report on asset liquidation; + List of creditors and confirmation of completed financial obligations; + Written confirmation from the tax agency regarding the completion of tax obligations. |
| Step 4 | Updating legal status on the National Business Registration Portal | After receiving a complete dossier, the business registration agency will update the legal status of the enterprise to “dissolved” in the national database. |
| Step 5 | Returning the seal to the competent authority | For enterprises using seals issued by the Police authority, the enterprise is responsible for returning the seal and the Certificate of Registered Seal Sample to the Police authority as prescribed when carrying out dissolution procedures. |
5.2 Compulsory Dissolution of Enterprises
In Case of Revocation of Business Registration Certificate or According to a Court Decision:
Legal Basis: Article 209 of the Enterprise Law 2020, Article 71 of Decree No. 01/2021/ND-CP.
| Step | Content | Details |
| Step 1 | Competent authority issues a decision on revocation or dissolution | – The Business Registration Agency or the People’s Court issues a decision to revoke the Business Registration Certificate or issues a legally effective judgment or decision on the dissolution of the enterprise. – This decision is a mandatory legal basis for the enterprise to carry out dissolution, even if the enterprise does not wish to do so voluntarily. |
| Step 2 | Business registration agency notifies dissolution status | Immediately after the decision is issued, the business registration agency announces the status of “in the process of dissolution” of the enterprise on the National Business Registration Portal. Furthermore, it sends information about the business dissolution to the Tax Agency |
| Step 3 | Enterprise liquidates assets and fulfills financial obligations | FDI enterprises are responsible for: + Liquidating all assets; + Paying all debts, including: salary debts, insurance, taxes, and other financial obligations in order of priority (Clause 5, Article 208 of the Enterprise Law 2020); + Settling the rights of employees in accordance with labor law. |
| Step 4 | Submitting the dissolution dossier | – The legal representative of the enterprise sends the business dissolution dossier to the Business Registration Office within 05 working days. – The dossier includes: + Decision on revocation of the Business Registration Certificate or the Court’s decision; + Report on asset liquidation; + List of creditors and confirmation of completed payment obligations; +Written confirmation from the tax agency regarding the completion of tax obligations. |
| Step 5 | Updating the status to “Dissolved” | – After receiving and fully verifying the dossier, the business registration agency updates the status to “Dissolved” in the National Business Registration System. – The legal personality of the enterprise terminates from the time the business registration agency updates this status. |
The information above is for reference only. If you require further details, please contact us using the information below.
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