Closure of a Representative Office of a Foreign Trader in Vietnam

The process of terminating the operation of a foreign Representative Office (RO) in Vietnam is not merely the return of the License, but rather a comprehensive review of legal compliance and financial obligations throughout its entire period of operation.

• Cases of termination: The Representative Office (RO) shall terminate its operations upon request of the foreign trader, upon expiry of its License without renewal, or upon revocation of the License due to non-operation for more than one year or failure to submit periodic reports for two consecutive years.
• Administrative procedures: The application dossier shall be submitted to the Department of Industry and Trade. The competent authority will review the dossier within three working days and publish the termination decision on the official online portal within five working days from the receipt of a valid and complete dossier.
• Tax obligations – the practical “bottleneck”: This is the most complex step, particularly where foreign employees are involved or the Chief Representative is a foreign national. The tax authority will closely examine the finalization of Personal Income Tax obligations (including worldwide income, where applicable) and cross-check compliance with applicable Double Taxation Avoidance Agreements. In practice, the time required to complete tax obligations often exceeds the statutory processing timeline of the Department of Industry and Trade.
• Post-termination inspection risks: Prior to closing the tax code, the authorities will review the entire history of periodic reporting. If violations or missing reports are identified, the foreign trader must fully settle any administrative fines (which may be substantial) before the termination can be formally recognized.

1. When does a Representative Office terminate its operations?

Unlike a company with legal entity status with legal entity status in Vietnam, a Representative Office of a foreign trader is governed by commercial law and managed by the Department of Industry and Trade. Therefore, matters relating to its establishment, amendment, or termination fall under the authority of the Department of Industry and Trade. In practice, the reasons for terminating a Representative Office commonly include cases where the foreign trader determines that the Vietnamese market aligns with its business strategy and therefore decides to establish a legal entity to conduct business activities. For management convenience, the trader will typically terminate the Representative Office before establishing the legal entity in Vietnam. There are also many cases where the foreign trader concludes that the business environment in Vietnam is not suitable, and thus chooses to terminate the Representative Office prior to the expiry of its License, or elects not to apply for renewal the license upon its expiry. However, the termination of a Representative Office of a foreign trader is not a simple procedure and often requires a considerable amount of time. The timeline largely depends on the level of compliance that the Representative Office has maintained throughout its operation in Vietnam.

According to regulations, a Representative Office of a foreign trader shall terminate its operations in the following cases:

• At the request of the foreign trader.
• Where the foreign trader terminates its operations in accordance with the laws of the country or territory where it is incorporated or registered.
• Upon expiry of the operation term stated in the License for Establishment of the Representative Office, where the foreign trader does not apply for an extension.
• Upon expiry of the operation term stated in the License for Establishment of the Representative Office, where the licensing authority does not approve the extension.
• Upon revocation of the License for Establishment of the Representative Office. Accordingly, such License shall be revoked where: (i) the Representative Office fails to operate for one year and has no transactions with the licensing authority; (ii) it fails to submit activity reports for two consecutive years; or (iii) it fails to submit reports as prescribed to the licensing authority within six months from the reporting deadline or from the date of a written request.
• Where the foreign trader or the Representative Office no longer satisfies one of the statutory conditions, meaning the conditions required by law for the competent authority to permit the establishment of a Representative Office in Vietnam.

For each termination case, in addition to the generally required dossier, there will be specific documents that the foreign trader must prepare depending on the particular grounds for termination.

2. Procedures for Termination of a Representative Office of a Foreign Trader

To terminate the operation of a Representative Office, the foreign trader should be aware of and prepare the following documents:

• A notice of termination of the Representative Office, in accordance with applicable regulations by the authorized representative of the foreign trader;
• A copy of the written notice from the licensing authority refusing to extend the License for Establishment of the Representative Office, or a copy of the Decision on revocation of the License for Establishment of the Representative Office;
• Reports of the Representative Office submitted to the Department of Industry and Trade up to the time of termination;
• The seal specimen registration certificate;
• A list of creditors and outstanding debts, including tax liabilities and social insurance contributions;
• A list of employees and their current corresponding benefits;
• The original License for Establishment of the Representative Office;
• A notification from the Tax Department regarding the tax identification number and matters relating to the tax obligations of the Chief Representative and employees of the Representative Office, together with other documents depending on the specific case.

The termination dossier shall be submitted to the Department of Industry and Trade. Within three working days from the date of receipt of the dossier, the licensing authority shall review the application and request supplementation if the dossier is incomplete or invalid. Such a request for supplementation may be made only once throughout the entire processing period. Within five working days from the date of receipt of a complete and valid dossier, the licensing authority is responsible for publishing the termination of operation of the Representative Office on its official website.

Based on our practical experience in handling the termination of Representative Offices for foreign enterprises, we have identified several issues that foreign traders should take into consideration in order to anticipate potential difficulties and the time required to close a Representative Office in Vietnam, specifically as follows:

Although the statutory timeline for processing the dossier at the Department of Industry and Trade is relatively short, the authority will only recognize the termination once the enterprise has fully completed its tax obligations. The main difficulties arise from the following:

Personal Income Tax (PIT) finalization for foreign individuals: The tax authority will carefully review the residency status (resident or non-resident) for tax calculation purposes. In particular, determining the worldwide income of the Chief Representative often leads to disputes regarding supporting documents evidencing income earned overseas. With respect to Double Taxation Avoidance Agreements, the application of such agreements requires highly complex documentation and may take considerable time for the tax authorities of both countries to review and verify.

During their operation, many Representative Offices do not pay sufficient attention to submitting annual activity reports to the Department of Industry and Trade. When carrying out dissolution procedures, the authority will review the entire reporting history. If reports are missing, the foreign trader will be subject to administrative penalties for each year of non-compliance before being allowed to terminate operations. With cumulative fines, the total amount may become significant.

Many Representative Offices that have operated for a long period (10–15 years) may have misplaced the original License or the old seal specimen registration certificate. The requirement to re-apply for issuance of such lost documents prior to initiating termination procedures prolongs the process and increases unnecessary costs.

As a Representative Office does not have independent legal entity status, any unpaid debts (such as office rent, utilities, or third-party service fees) are directly associated with the reputation of the parent company abroad. Failure to settle these civil and commercial obligations may prevent the competent authority from confirming the termination of operations.

In the process of terminating a Representative Office, the greatest obstacle often lies in the completion of tax obligations, particularly where foreign personnel are involved. This complexity arises from the tax authority’s need to thoroughly assess residency status in order to determine the scope of taxable income, which in turn leads to the examination of global tax finalization obligations. The process requires not only transparent documentation of income earned in the home country but also coordination and verification under applicable Double Taxation Avoidance Agreements, resulting in implementation timelines that frequently extend beyond initial expectations.

In addition to tax-related pressure, the competent authorities also conduct a comprehensive review of the Representative Office’s legal compliance throughout its entire operational lifecycle. Before issuing a termination decision, any shortcomings in periodic reporting obligations or other administrative violations will be strictly examined and required to be fully remedied. Given the relatively high current penalty framework, insufficient operational governance and compliance control may create significant financial and legal barriers at the exit stage. Therefore, establishing a robust internal compliance and control mechanism from the outset of establishment is the optimal solution for foreign traders to maintain proactive management and ensure legal certainty when deciding to cease operations in Vietnam.

• Advisory email: info@cdlaf.vn

• Hotline: (+84) 909 668 216

Time of writing: 10/02/2026

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

• New regulations on foreign e-commerce platforms operating in Vietnam
• E-commerce Law 2025: Mandatory Obligations for Platform Management Entities from July 2026
• 05 new points of the Law on investment 2025 effective from March 01, 2026
• State-owned enterprises’ management of subsidiaries and Capital contributions
• Salary, remuneration and bonus regime in state-owned enterprises (2026)