Establishing and dissolving a business are two common stages in the business lifecycle. In certain situations, dissolution becomes essential to formally end a business’s legal existence and the responsibilities of its owner and legal representative.
Below is a detailed guide by 68 SOLUTIONS on the steps required to dissolve 100% Vietnamese-owned enterprises and foreign-invested enterprises in Vietnam.
Understanding Business Dissolution
What Is Business Dissolution?
Business dissolution refers to the process of legally terminating the existence of a business entity, provided it is capable of fulfilling or settling all its financial obligations.
It is an administrative procedure carried out by the authorized person of the company through the Business Registration Authority. The filing party is the enterprise itself.
How Is Dissolution Different from Bankruptcy?
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Dissolution is an administrative procedure initiated by the business itself.
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Bankruptcy is a judicial procedure decided by a competent court upon receiving a valid petition. It involves various legal actors: the People’s Court, People’s Procuracy, administrators, and asset management/liquidation units.
When Can a Business Be Dissolved?
According to Vietnamese law, a business may dissolve in the following four cases:
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End of business term as stated in the company charter with no decision to extend.
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Voluntary decision by the business owner (sole proprietorship), board of members (LLCs/partnerships), or shareholders (JSCs).
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Insufficient number of members as per the Law on Enterprises (e.g., a JSC with fewer than 3 shareholders for more than 6 months).
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Revocation of the Business Registration Certificate, except for specific exemptions under the Tax Administration Law.
Who Can File for Dissolution?
The right to initiate dissolution belongs to:
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The business owner (for sole proprietorships)
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The Board of Members or company owner (for limited liability companies)
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The General Meeting of Shareholders (for joint stock companies)
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All general partners (for partnerships)
Dissolution is classified into two categories:
Voluntary Dissolution
This is based on the will of the owners or shareholders and includes:
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Reaching the end of the business term with no extension
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A resolution or decision from the company’s governing body
Compulsory Dissolution
Ordered by state authorities when the business violates applicable laws:
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Failure to maintain the required number of members without transitioning to a different legal form
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Revocation of the business registration certificate
Procedure for Business Dissolution
Step 1: Submit a Notice of Dissolution
The initial step requires the company to submit a formal notification of dissolution together with the decision on the enterprise to the business registration office in the city or province where it is headquartered. Once the notice is submitted, the enterprise’s legal status on the National Business Registration Portal will be changed to ” undergo dissolution procedures.” The information regarding the enterprise’s dissolution is also relayed to the tax authority by the Business Registration Office.
Step 2: Undertake Tax Audits and Settle Tax Liabilities
In this critical phase, the company must undergo tax audits and fulfill any outstanding tax obligations with the tax authorities. Important documents include a written request to invalidate the tax code, a decision on the dissolution of the enterprise, and documents related to the tax obligations of the enterprise as required by the tax authorities. The duration of this process depends on the complexity and level of compliance, typically ranging from 3 to 12 months.
Step 3: Submit a dissolution application to the Business Registration Office
Within five working days of receiving the application for registration of dissolution, the Business Registration Office updates the legal status of the enterprise in the National Enterprise Registration Database to the “dissolved”. Simultaneously, the office also issues an official notice of the enterprise’s dissolution. During this step, it is crucial to comply with any requirements and not encounter objections from relevant parties to proceed smoothly.
Step 4: Termination of Social Insurance
Closing the social insurance books is a vital procedure to conclude the payment of social insurance premiums for employees. Employers must follow the prescribed steps, including issuing a labor reduction notice and providing the necessary documents such as the social insurance book and the decision to terminate the labor contract, as outlined in Decision 595/QD-BHXH.
Step 5: Bank Accounts Closure
After receiving the notification of the enterprise’s dissolution status update on the National Enterprise Registration database, the company can proceed to close its bank accounts. For more information, enterprises are required to work together with the bank to carry out the required procedures. In case there is not any bank account opened, a letter of commitment confirming the absence of debts with any banks may be required.
Step 6: Termination of the investment project at the Investment Registration Office
As the final step, once all debts and dissolution costs are settled, the FDI company must file an application dossier to terminate the investment project with the licensing authority, typically the Department of Planning and Investment. If no objections or concerns from relevant parties are raised, the licensing authority will confirm the termination of the investment project.
Prohibited Activities After Dissolution Decision
Once the dissolution decision is made, company managers and stakeholders are prohibited from:
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Hiding or disposing of assets
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Forgoing debts or reducing claims
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Converting unsecured to secured debts
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Signing new contracts (except those related to dissolution)
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Pledging or donating company assets
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Halting performance of valid contracts
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Raising capital in any form
Violators may face administrative or criminal penalties, and civil compensation in cases of damage.
Dissolution of Foreign-Invested Enterprises (FIEs)
While the basic dissolution procedure for FIEs is similar to that of Vietnamese businesses, it includes additional steps related to investment registration:
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Termination of the investment project and/or Investment Registration Certificate (IRC)
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Transfer of remaining investment capital and profits abroad via the authorized bank account
How long does it take to dissolve a company in Vietnam?
When seeking to wind up, or liquidate, a company in Vietnam, care needs to be taken to appreciate the tax process and exposures that arise. The winding up stage represents the last opportunity for authorities to obtain taxes, penalties or outstanding payments from investors in Vietnam, and the authorities take this very seriously. Further, as the process is dependent on tax authority clearance, the timing for finalisation is often hard to predict and can stretch out for over 12 months in cases.
At 68 SOLUTIONS, we offer full-service business dissolution support for local and foreign-invested enterprises in Vietnam. With years of expertise and hands-on experience, we ensure compliance, transparency, and smooth procedures.
Our services include:
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Legal consultation and document preparation
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Liaison with tax, business registration, and investment authorities
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Case-by-case guidance for liquidation and exit plans
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Confidentiality and cost transparency guaranteed
Contact our team today for personalized assistance via hotline: (+84) 963 580 958
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68Solutions – Legal & Travel
Consulting & Partnerships Department
Address: 6th Floor, 67 Yen Lang Street, Trung Liet Ward, Dong Da District, Hanoi, 100000
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Hotline/ WhatsApp/ Zalo: (+84) 963 580 958
Email: sales@68solutions.vn
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