A Comprehensive Guide to Dissolving a Company in Vietnam for Foreign Investors

Dissolving a company in Vietnam as a foreign investor involves a precise set of steps and adherence to legal regulations outlined in 'The Law on Company 2020,' 'Decree 01/2021/NĐ-Cp,' dated January 01, 2021, and 'Circular 01/2021/TT-BKHĐT,' issued on March 16, 2021. This guide provides a clear understanding of the process, conditions, and expected timeframes.

2. Conditions for Dissolving a Company

The dissolution of a company in Vietnam may occur under various circumstances, including:

• Expiration of Operating Period: If the company's charter specifies a fixed operating period without an extension decision.
• Resolution or Decision: If the company is dissolved through a resolution or decision by the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members, and the owner (for limited liability companies), or the GMS (for joint-stock companies).
• Inadequate Number of Members: If the company fails to maintain the minimum number of members as prescribed by law for six consecutive months without converting to another type of business.
• Certificate of Company Registration Revocation: Unless otherwise specified by the Law on Tax Administration, the company may face dissolution if the Certificate of Company Registration is revoked.

Please note that a company can only be dissolved after all debts and liabilities are fully settled, and it is not involved in any court or arbitration disputes. Both relevant executives and the company bear joint responsibility for the company's debts in such cases.

3. Sequencing the Procedure for Company Dissolution with Foreign Capital

Step 1: Company Approval of Dissolution Decision

A dissolution resolution or decision should include the following key information:

• Company's name and headquarters address.
• Reason for dissolution.
• Timeline and procedures for finalizing contracts and debt payments (not exceeding 6 months).
• Plan for settling obligations under employment contracts.
• Full name and signature of the relevant authority (owner, Chairman of the Board, etc.).

Step 2: Submitting Dissolution Documents to Competent State Agencies

Within seven working days of ratification, the resolution or decision on dissolution, along with the meeting minutes, should be sent to the business registration authority, tax authority, and the company's employees. It should also be posted on the National Company Registration Portal and displayed at company offices.

If the company still has unpaid debts, the resolution, decision, and debt payment plan should be sent to creditors and other relevant parties. The debt payment plan should specify creditor names, debts, repayment details, and a method for settling creditor complaints.

Step 3: Liquidating Company Assets

In this step, the company's authorized entities are directly responsible for liquidating assets unless the Company's Charter specifies the establishment of a separate liquidation organization.

Step 4: Closing the Company's Tax Code

The time required for closing the tax code may vary depending on the company's accounting practices and can take six months or more. During the tax finalization procedures, the company should reduce labor and settle the relevant employee benefits as stipulated in the Labor Code.

Step 5: Returning the Company's Seal (Round Sign)

The company's seal, issued by the police department, must be returned following specific procedures at the local police department.

Step 6: Submitting Documents to Update the Business Registration Certificate

The company's legal representative must apply for dissolution with the Business Registration Authority within five working days of fully settling the company's debts.

4. Expected Timeframes for Company Dissolution

After 180 days from submitting the dissolution decision to the Department of Planning and Investment, provided there are no further comments or objections, the business registration authority will update the company's status in the national company registration database.

5. Termination of the Investment Project

In addition to the dissolution of the company, foreign investors need to announce and re-submit the Investment Registration Certificate to the Investment Registration Authority within 15 days of terminating the investment project.

6. Required Documents for Company Dissolution

The company dissolution documents include:

• Notification of the company's dissolution.
• A report on the liquidation of the company's assets, including a list of creditors and debt payments, such as tax debts, social insurance, health insurance, and unemployment insurance (if applicable).
• Confirmation of Tax authorities regarding the closure of the tax code.
• The police department's certificate for the returned seal.
• The resolution or decision, along with a copy of the minutes from the relevant meeting.
• A debt payment plan (if applicable).

7. Steps to Implement Company Dissolution

The process involves the following six steps:

• Company approval of the dissolution decision.
• Announcement of the dissolution decision on the National Business Registration Portal.
• Asset liquidation and payment of all company debts.
• Termination of the tax identification number; Finalization of taxes and settlement of employee benefits.
• Return of the company's seal (if any).
• Submission of dissolution documents to update the legal dissolution status of the company on the National Enterprise Registration Database.

For expert legal guidance on closing a company in Vietnam or company dissolution in Vietnam, consider consulting with Viet An Law Firm. They can assist you in addressing all legal aspects, from posting the dissolution announcement to finalizing tax obligations, closing tax codes, returning seals, and updating the dissolution legal status of your company. They also ensure compliance with other legal requirements based on your specific business operations.

In conclusion, dissolving a company in Vietnam as a foreign investor requires adherence to specific legal procedures and conditions. Seeking expert advice from a reputable law firm is crucial to ensure a smooth and compliant dissolution process.