Handling Capital After Dissolution for FDI Enterprises: Conditions for Closing the DICA Account and Legally Remitting Funds Abroad

Authors: Truong Trong Minh – Senior Associate, Nguyen Dinh Sac – Paralegal.

For foreign investors, the matter of concern is not limited to the administrative procedures for dissolving an enterprise, but also extends to the question of “how to legally repatriate the investment capital and profits.” Many investors assume that once the tax code is closed, funds may be freely withdrawn and remitted home; in reality, however, this constitutes a separate procedure governed by the regulations on management of foreign direct investment capital flows, which falls under the responsibility of the bank. Any prior violations relating to the enterprise’s foreign exchange obligations may serve as a potential ground for prolonging the processing time and creating obstacles to closing the account.

This article by CDLAF Law Firm analyzes the conditions, procedures, and common risks encountered when closing the DICA account and remitting capital and profits abroad during the post-dissolution phase.

1. Why is DICA the “sole legal channel” for repatriating capital?

The Direct Investment Capital Account (DICA) is a mandatory account that enterprises with foreign direct investment capital must open at a licensed bank in order to carry out transactions related to direct investment activities — including capital contribution, capital increase, capital transfer, receipt and distribution of profits, and remittance of lawful capital, profits, and income abroad.

The legal significance of DICA extends beyond that of an ordinary bank account: it serves as the mechanism through which the foreign exchange management authority controls and verifies the lawful origin of cash flows. The entire amount of initial contributed capital entered Vietnam through the DICA; therefore, upon completion of the project, the remaining capital and profits must likewise flow out through that same channel, so that the bank and competent authorities can reconcile and confirm the transaction. Should the enterprise attempt to remit funds through an ordinary payment account, the bank is entitled to—and in practice generally will—refuse to process the transaction, on the grounds that there is no basis to establish that the funds constitute lawful investment capital. In practice, however, enterprises face even greater difficulties where such funds are not channeled through the DICA, as the enterprise may be subject to consideration for administrative sanctions before the bank will proceed further with the account-closing procedure.

2. Three cash flows to be clearly distinguished upon dissolution

One of the most common misconceptions is to lump together all remaining funds within the enterprise as capital to be repatriated, when in fact each cash flow differs in legal nature and in the conditions governing its treatment:

Flow 1 — Refund of the remaining contributed capital. This is the portion of the initial investment capital (or additional contributed capital) that remains unused, or that remains after the liquidation of assets and settlement of debts. In principle, this constitutes assets belonging to the investor; however, it must still be accurately determined through audited financial statements and may not be remitted prior to the fulfillment of tax obligations.

Flow 2 — Lawfully distributed profits. This is the after-tax profit, distributed in accordance with the law and the company’s charter, as determined through audited financial statements. Remittance of this amount is subject to the supervision of the directly managing tax authority prior to transfer.

Flow 3 — Proceeds from the liquidation of assets or the transfer of rights. This arises where the enterprise sells machinery, equipment, or inventory, or transfers land use rights and assets attached to land (if any). With respect to land and assets attached to land in particular, the treatment thereof upon termination of the project must comply with the law on land.

Although all three cash flows are ultimately channeled through the DICA for remittance abroad, the supporting documentation required, the point in time at which remittance is permitted, and the manner of explanation to the bank differ for each. Failure by the enterprise to distinguish between them is a common cause of the bank requiring repeated supplementation of documents and further clarification of the remittance dossier.

3. Mandatory conditions for remitting funds and closing the DICA

In order to remit capital and profits abroad and close the DICA account upon dissolution, an enterprise must satisfy all of the following conditions concurrently:

• Full completion of all financial obligations in Vietnam. This is the most important and prerequisite condition, encompassing tax obligations, late-payment interest (if any), obligations toward employees, and other outstanding debts.
• Possession of a written confirmation or decision on invalidation of the tax code issued by the tax authority, or documentation confirming completion of tax obligations.
• Completion of the liquidation of assets and of the investment project.
• Notification having been given to the tax authority regarding the remittance of profits abroad.
• Consistency among the financial, accounting, and banking records: the figures for contributed capital, profits, and the DICA balance must be consistent with the liquidation financial statements and the dissolution resolution/decision; this serves as the basis on which the bank will conduct verification prior to executing the remittance order.

4. Procedure for processing the DICA upon dissolution

Step 1 — Determine the balance and the composition of the remaining cash flows in the DICA. Reconcile the account balance against the audited financial statements, separating out the remaining contributed capital, the distributed profits, and the proceeds from asset liquidation.

Step 2 — Complete tax obligations and obtain the written confirmation/decision on invalidation of the tax code. This is a prerequisite condition for the entire procedure; without this document, the bank will, in practice, be unable to process the outward remittance order.

Step 3 — Notify the tax authority of the remittance of profits (with respect to the distributed profits) prior to requesting the bank to execute the transfer.

Step 4 — Prepare the dossier and liaise with the bank at which the DICA is held. As each bank maintains its own internal requirements regarding documentation, the enterprise should confer directly with the bank managing the DICA on the required list of documents before proceeding with preparation.

Step 5 — Execute the remittance order and close the DICA account. Once the bank has confirmed the dossier is valid, the enterprise remits the entire lawful balance abroad, and thereafter requests the bank to close the account.

5. Recommendations from CDLAF Law Firm

• Identify early the composition of the three cash flows (remaining contributed capital, distributed profits, and asset liquidation proceeds).
• Do not remit funds prior to obtaining written confirmation of the completion of tax obligations.
• Liaise early and directly with the bank managing the DICA.
• Separately review assets attached to land (if any).

CDLAF’s Advisory Services for the Dissolution of FDI Enterprises

CDLAF Law Firm is committed to accompanying and supporting enterprises in carrying out the dissolution procedure safely, lawfully, effectively, and with well-controlled risk, including:

• Reviewing and assessing the legal status, accounting records, social insurance, and labor situation before dissolution; proposing appropriate options and a roadmap.
• Carrying out the enterprise dissolution procedure, drafting the dossier, and representing the enterprise in working with the business registration authority, the tax authority, and the social insurance authority throughout the dissolution process.
• Advising on legal matters arising throughout the enterprise’s 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

You can refer for more information:

• • Abandoning an FDI Legal Entity in Vietnam: The Risk of Exit Suspension and the Liability of the Foreign Director
  • Tax Finalization upon Dissolution of an FDI Enterprise: 4 Cost-Disallowance Risks and Solutions for a Safe Tax Code Closure
  • Termination of Operations of an FDI Enterprise in Vietnam — Dissolution Procedure and Tax Code Closure
  • Costs of Corporate Dissolution: Economical Yet Effective
  • 5 Steps to Dissolve a Business Quickly and in Full Compliance in 2026