FDI (Foreign Direct Investment) enterprises in Vietnam may temporarily suspend business operations for various reasons such as financial difficulties, restructuring, or strategic changes. To ensure compliance with regulations and protect legal rights, enterprises need to fully understand the process and necessary considerations. DNP Viet Nam Law Firm will help foreign investors gain a clearer understanding of the procedures for temporarily suspending business operations of FDI enterprises and their accompanying legal obligations.
1. Legal Basis for the Temporary Suspension of Business Operations of FDI Enterprises
FDI enterprises intending to temporarily suspend business operations in Vietnam must refer to the following legal documents:
- Law on Enterprises 2020 (Law No. 59/2020/QH14);
- Decree No. 01/2021/ND-CP on enterprise registration;
- Law on Investment 2020 (Law No. 61/2020/QH14);
- Decree No. 31/2021/ND-CP guiding the implementation of the Law on Investment.
2. Duration of Business Suspension for FDI Enterprises
According to Article 206 of the Law on Enterprises 2020: Enterprises must notify the Business Registration Authority in writing no later than 03 working days prior to the date of suspension or the date of early resumption of business activities.
- An enterprise may suspend its operations multiple times consecutively, provided that it sends a written notice to the Business Registration Office where its head office is located at least 03 working days before the expiry of the previous suspension period.
- Each notice of temporary business suspension must not exceed 01 year.
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3. Procedures for Business Suspension of FDI Enterprises
3.1. Required documents
- A written notification on the registration of temporary business suspension.
- A resolution, decision, and a copy of the meeting minutes of the Members’ Council (for multi-member limited liability companies and partnerships), or of the Board of Directors (for joint stock companies).
- A resolution or decision of the company owner (for single-member limited liability companies) on the suspension of business.
Legal basis: Clauses 1 and 2, Article 66 of Decree No. 01/2021/NĐ-CP on enterprise registration.
3.2. Suspension procedure
- The enterprise must submit the written notification and accompanying documents as listed above to the Business Registration Office where the enterprise’s head office is located, no later than 03 working days prior to the intended date of business suspension or early resumption.
- If the enterprise wishes to continue the suspension beyond the previously notified period, it must send a new notice to the Business Registration Office no later than 03 working days before the extension date begins.
- Upon receiving the application, the Business Registration Office shall issue a receipt, verify the validity of the documents, and issue a confirmation of registration of business suspension within 03 working days from the date of receipt of a valid application.
- The Business Registration Office shall update the legal status of the enterprise, as well as the status of all its branches, representative offices, and business locations in the National Business Registration Database to reflect the suspension status.
Legal basis: Article 66 of Decree No. 01/2021/NĐ-CP on enterprise registration.
4. Obligations of Enterprises During the Suspension Period
According to Clause 3, Article 206 of the Law on Enterprises 2020, during the suspension period, FDI enterprises must still fulfill the following obligations:
- Fully pay any outstanding amounts of taxes, social insurance, health insurance, and unemployment insurance;
- Settle outstanding debts with partners, customers, and employees, unless otherwise agreed by the parties;
- Perform any remaining contractual obligations unless such obligations have been lawfully postponed or terminated pursuant to legal agreements.
The information above is for reference only. If you require further details, please contact us using the information below.
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