Closing Your Business in Vietnam: Guidelines and Procedures

Introduction

Closing a company in Vietnam is a formal legal process governed primarily by the Enterprise Law 2020, Decree No. 01/2021/ND-CP on enterprise registration, and related tax administration regulations.

Business dissolution refers to the legal termination of an enterprise’s existence after all financial and legal obligations have been fulfilled. This includes the settlement of debts, completion of tax obligations, and resolution of employee rights.

Companies cannot simply stop operating to terminate their legal existence. Instead, they must complete a structured dissolution process with the Business Registration Office, tax authorities, and other relevant state agencies.

This guide explains the legal conditions, required documents, and step-by-step procedures involved in dissolving a company in Vietnam. The information is particularly useful for:

• Domestic Vietnamese enterprises
• Foreign-invested companies
• Investors exiting the Vietnamese market
• Corporate managers responsible for compliance

Reasons for Closure of Company

According to Article 207 of the Enterprise Law 2020, enterprises may be dissolved under the following circumstances:

1. Expiration of the Company’s Operating Term

If the operating period specified in the company’s charter expires and the shareholders or owners decide not to extend it, the enterprise must proceed with dissolution.

2. Voluntary Dissolution by Owners or Shareholders

Companies may voluntarily dissolve when business owners determine that the enterprise should cease operations. This decision must be approved in accordance with the company’s governance structure.

For example:

• Single-member LLC: decision by the owner
• Multi-member LLC: decision by the Members’ Council
• Joint stock company: resolution of the General Meeting of Shareholders

3. Failure to Maintain Required Membership

If the company does not maintain the minimum number of members or shareholders as required by law for a certain period without converting its business type.

4. Revocation of Enterprise Registration Certificate

Authorities may revoke a company’s registration certificate due to serious legal violations, including:

• Fraudulent registration information

• Failure to operate at registered address

• Failure to submit mandatory reports

In such cases, the enterprise must proceed with dissolution procedures.

5. Strategic Business Restructuring

Many companies dissolve subsidiaries as part of:

• mergers and acquisitions
• corporate restructuring
• strategic market exit

Conditions for a Company to be Closed

Under Article 207 of the Enterprise Law 2020, a company may only be dissolved when the following conditions are satisfied:

1. All Debts Must Be Fully Paid

The enterprise must settle all financial obligations, including:

• commercial debts
• supplier payments
• bank loans

2. Tax Obligations Must Be Completed

The company must complete tax finalization procedures with the tax authority before dissolution is approved.

3. Employee Rights Must Be Settled

This includes payment of:

• salaries
• severance allowances
• social insurance obligations

4. No Pending Legal Disputes

A company cannot be dissolved while involved in unresolved disputes at court or arbitration.

Preparing the Necessary Documents and Procedures for Business Dissolution

Proper documentation is essential to complete the dissolution process.

Business Dissolution Notification File

Typical documents include:

• Notification of enterprise dissolution
• Resolution or decision on dissolution
• Minutes of the meeting approving dissolution
• Power of attorney (if submitting through a representative)

Business Dissolution Registration Documents

The dissolution registration dossier typically includes:

• Liquidation report
• List of creditors and debt settlement status
• Confirmation of tax obligations
• Confirmation of social insurance completion

Resolution to Dissolve the Enterprise

The dissolution resolution must clearly state:

• company name and address
• reason for dissolution
• timeline for debt settlement
• asset liquidation plan

• employee settlement plan

The resolution must be signed by the legal representative.

Step-by-Step Process to Dissolve a Company in Vietnam

Step 1: Internal Decision to Close

The company’s governing body must approve the dissolution decision and issue a formal resolution.

Step 2: Notify the Business Registration Office

The enterprise must notify the Business Registration Office where it is registered.

Step 3: Public Disclosure

The dissolution decision must be published on the National Business Registration Portal.

Step 4: Form a Liquidation Board

The enterprise establishes a liquidation team responsible for:

• asset liquidation

• debt settlement

Step 5: Notify Creditors and Employees

Written notifications must be sent to all creditors and employees regarding the dissolution plan.

Step 6: Tax Finalization

The company must complete tax finalization procedures with the tax authority.

This step is often the most time-consuming part of the dissolution process.

Step 7: Liquidate Company Assets

Assets may be sold, transferred, or distributed to settle outstanding liabilities.

Step 8: Close Bank Accounts

All company bank accounts must be officially closed.

Step 9: Submit Final Closure Documents

Once all obligations are settled, the company submits the final dissolution dossier.

Step 10: Official Deregistration

The Business Registration Office updates the enterprise status in the national database as “Dissolved.”

Common Mistakes and Delays in Company Dissolution

Several issues commonly delay dissolution procedures:

• incomplete tax filings
• unpaid tax penalties
• missing employee settlement documentation
• inaccurate or inconsistent records

• failure to notify creditors

Proper preparation can significantly reduce the dissolution timeline.

Alternatives to Closing a Business

In some cases, dissolution may not be the best option.

Alternative solutions include:

• Share or Capital Transfer: Selling ownership to another investor.
• Business Merger or Acquisition: Merging with another company.
• Temporary Suspension: Businesses may temporarily suspend operations for up to two years.
• Corporate Restructuring: Restructuring the company instead of closing it.

Special Considerations for Foreign-Owned Enterprises

Foreign-invested enterprises must complete additional procedures.

These may include:

• termination of the investment project
• adjustment or cancellation of the Investment Registration Certificate (IRC)
• repatriation of investment capital

• settlement of obligations with Vietnamese partners

Foreign investors should carefully review investment and tax obligations before initiating dissolution.

FAQs

In what sequence of priorities are the debts of the business paid?

Debt payment priority generally follows this order:

1. employee wages and benefits
2. tax obligations
3. other creditors

Can a business be dissolved if it still owes taxes?

No. All financial obligations must be fully settled before dissolution.

How long does the dissolution process take?

Typically 3–6 months, depending largely on tax clearance.

Can a business not operating at its registered address be dissolved?

Yes, but additional administrative verification may be required.

Who is responsible for the accuracy of dissolution records?

The legal representative and company management are responsible for the accuracy of the submitted documents.