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Termination of Operations of an FDI Enterprise in Vietnam — Dissolution Procedure and Tax Code Closure

Authors: Truong Trong Minh – Senior Associate, Vo Thi Anh Nhi – Paralegal.

Withdrawing from the Vietnamese market is not simply a matter of closing a tax code or filing a dissolution dossier. For an FDI enterprise, this process is also tied to terminating the investment project, completing tax obligations, liquidating assets, handling labor matters, and lawfully repatriating the investor’s capital and profits.

Below are the main contents and common risks in the enterprise dissolution process, compiled by the team of Lawyers and Tax Experts of CDLAF, to help enterprises clearly visualize the sequence of steps to be carried out, limit errors, and be more proactive regarding the time needed to complete the procedure.

Source: Pexels

1. Dissolution procedure and tax code closure

Step 1 — Assessing the investment project and enterprise records

Review the Investment Registration Certificate, the status of periodic investment supervision reports, accounting books, and tax obligations to determine an appropriate termination roadmap.

Step 2 — Terminating the investment project

File the notification of termination of the investment project with the investment registration authority. The investment registration authority issues a decision terminating the project and simultaneously revokes the Investment Registration Certificate. The Investment Registration Certificate ceases to be effective from the date this decision takes effect.

Step 3 — Filing the dissolution notice with the business registration authority

Prepare the dissolution decision and related documents to file the dissolution notice with the business registration authority, officially commencing the enterprise dissolution process.

Step 4 — Liquidating assets, settling debts, and handling obligations to employees

Organize the liquidation of assets, settle debts both domestically and with foreign partners, terminate labor contracts, and carry out procedures related to work permits and temporary residence cards of foreign personnel.

Step 5 — Tax finalization and tax code closure

Carry out tax finalization procedures, close the tax code at the managing tax authority, and obtain confirmation of completion of tax obligations.

Step 6 — Transferring remaining capital and profits abroad

After obtaining confirmation of completion of tax obligations and the asset liquidation report, carry out the procedure to transfer the remaining contributed capital, profits, and assets (if any) abroad through the direct investment capital account (DICA). After completing the transfer of profits/capital back to the home country, the enterprise carries out the procedure to close the DICA account — this step must be completed in full before filing the official dissolution dossier, to avoid the account remaining active while the enterprise has already ceased to exist.

Step 7 — Filing the dossier to complete the dissolution procedure

File the notification of completion of financial obligations with the business registration authority, receive the result, and officially terminate the existence of the enterprise.

2. Common risks when dissolving an FDI enterprise

  • Investment supervision reports not yet completed, causing the project termination dossier to be required to be supplemented, prolonging the timeline, and potentially even leading to administrative penalties for failure to comply with periodic reporting.
  • Transferring capital and profits abroad not in accordance with the proper sequence and foreign exchange regulations, resulting in funds being held up or the process having to be redone from the beginning.
  • Work permits and temporary residence cards of foreign experts not yet fully resolved, affecting the departure of management personnel from the country.
  • The legal representative being temporarily banned from leaving the country if tax obligations or other financial obligations have not been completed.

Does your FDI enterprise need to terminate its investment project, close its tax code, and dissolve in the correct sequence, ensuring the foreign investor can smoothly transfer capital and profits back to their home country?

Please leave your contact information, and the Lawyers and Experts of CDLAF will proactively contact your enterprise to advise on an appropriate solution.

Consultancy & implementation of enterprise dissolution procedures service at CDLAF

CDLAF Law Firm supports enterprises to carry out dissolution procedures in a legally safe manner and on schedule, including:

  • Reviewing and assessing the legal status, tax obligations, debts and asset liquidation plan of the enterprise before dissolution; proposing appropriate plans and roadmaps for each enterprise.
  • Drafting dossiers, representing the enterprise to work with competent state agencies during the dissolution process.
  • Advising on legal situations arising during the dissolution process.

📩 BOOK A CONSULTATION WITH CDLAF’S LEGAL TEAM

Do not let procedural errors disrupt your business plans. Contact CDLAF today to receive a preliminary risk assessment from our team of Lawyers:

Hotline/Zalo: [+84 909 668 216]

Email: info@cdlaf.vn

Why choose CDLAF’s service?

  • We provide effective and comprehensive legal solutions that help you save money and maintain compliance in your business;
  • We continue to monitor your legal matters even after the service is completed and update you when there are any changes in the Vietnamese legal system;
  • Our system of forms and processes related to labor and personnel is continuously built and updated and will be provided as soon as the customer requests it;
  • As a Vietnamese law firm, we have a thorough understanding of Vietnam’s legal regulations, and grasp the psychology of employees, employers, and working methods at competent authorities;
  • CDLAF’s team of lawyers has many years of experience in the field of labor and enterprises, as well as human resources and financial advisory.
  • Strict information security procedures throughout the service performance and even after the service is completed.

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