Dissolution of foreign invested companies: Conditions & Procedures

Article overview

Dissolution of foreign invested companies is a rather complicated process that requires strict compliance with the provisions of the Law on Enterprise in Vietnam. Foreign investors need to understand the specific conditions and procedures to quickly and legally dissolve a business. In the article below, we will provide specific information on issues related to the dissolution of foreign invested companies.

Dissolution of foreign invested companies
Dissolution of foreign invested companies

In what cases should foreign-invested enterprises be dissolved?

Pursuant to Article 207 of the Law on Enterprise 2020, foreign-invested enterprises are dissolved in the following cases:

  • End of the operating term stated in the company charter without a decision to extend;
  • According to the resolutions and decisions of the business owner for private enterprises, of the Board of Members for partnerships, of the Board of Members and company owners for limited liability companies, of the General Meeting of Shareholders for joint stock companies;
  • The company no longer has the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out procedures for converting the type of enterprise;
  • The Certificate of Business Registration has been revoked, unless the Law on Tax Administration has other provisions.

Conditions for dissolution of foreign invested companies

Pursuant to the provisions of Article 207 of the Law on Enterprises 2020, companies can only carry out procedures for dissolution of foreign invested companies when:

  • Guaranteed payment of all debts and other property obligations.
  • Not in the process of resolving disputes in Court or Arbitration.
Conditions for dissolution of the company
Conditions for dissolution of the company

Procedures for dissolution of foreign invested companies

Step 1: Approve the dissolution decision

The company held a meeting to approve the dissolution decision.

The dissolution decision includes the following contents:

  • Name and address of the enterprise’s headquarters;
  • Reason for dissolution;
  • Term, procedures for liquidating contracts and paying debts of the enterprise;
  • Plan for handling obligations arising from labor contracts;
  • Full name and signature of the private enterprise owner, company owner, Chairman of the Board of Members, Chairman of the Board of Directors;

Step 2: Establish an Asset Handling Council

  • When handling assets, the Council is responsible for classifying assets, counting quantities, collecting technical records and documents related to the assets, and conducting inspections and assessments of the remaining quality of the assets to determine the value of the assets.
  • Organize asset liquidation and select asset liquidation partners.

Step 3: Notify the business registration agency

Within 07 working days from the date of passing the resolution or decision on dissolution, the company sends a notice of enterprise dissolution to the Business Registration Office where the company’s headquarters is located. Accompanying the notice must be the following documents:

  • Resolutions, decisions and meeting minutes of the Board of members or resolutions and decisions of the company owner on dissolution of the enterprise;
  • Debt settlement plan (if any).

Step 4: Announce the dissolution decision

Within 07 working days from the date of approval, the resolution, dissolution decision and meeting minutes. Resolutions and dissolution decisions must be posted on the National Business Registration Portal and publicly posted at the enterprise’s headquarters, branches, representative offices and at least 01 newspapers.

Step 4: Perform asset liquidation:

Make a list of assets and evaluate asset values.

The Asset Liquidation Council will conduct an inventory of assets and compile an asset list. Then, evaluate the remaining value of the asset to determine the appropriate liquidation method for each type of asset.

Proceed to sell, transfer, or liquidate assets.

After being inspected and evaluated, assets will be sold in the following forms: designated sale or public sale announcement; auction.

Divide the remaining assets (if any) among the owners.

After completing the sale of assets, the proceeds will be used to pay the remaining debts and obligations of the dissolved company (if any).

The remaining amount after fulfilling obligations and completing debt payments will be divided among company members according to capital contribution ratio (for single-member LLCs, the remaining revenue will be recovered by the company owner).

Step 5: Complete tax obligations:

  • Once the assets have been liquidated, the enterprise will carry out procedures for closing the tax code.
  • After the enterprise has fulfilled its obligations to the tax authority, the enterprise will receive a notice of tax code termination.

Step 6: Submit documents to complete dissolution:

  • The legal representative of the enterprise sends the enterprise dissolution documents to the Business Registration Authority within 05 working days from the date of payment of all debts of the enterprise;
  • After 180 days from the date of receipt of the resolution or decision on dissolution without receiving comments on dissolution from the enterprise or written objections from relevant parties or within 05 working days from the date of dissolution. Receiving dissolution documents, the Business Registration Authority updates the legal status of the enterprise on the National Business Registration Database.

>>> See more: Difficulties when dissolving a business improperly.

Procedures for dissolution of foreign invested companies
Procedures for dissolution of foreign invested companies

Consulting services and support procedures for dissolution of foreign invested companies in Long Phan

At Long Phan, we provide in-depth support services for dissolution of foreign invested companies with comprehensive solutions. Our Services include:

  • Consulting on cases of dissolution of foreign invested companies
  • Consulting on asset disposal plans;
  • Consulting and supporting the preparation of company dissolution documents;
  • Instructions on the order and procedures for dissolution of foreign invested companies;
  • Consulting on debts to be paid before dissolution;
  • Consulting on documents, guiding tax finalization, invalidating tax codes;
  • In-depth analysis of financial reports;
  • Consulting on handling remaining assets after all debts have been paid;
  • Representing customers to quickly carry out and complete dissolution procedures;
  • Consulting and answering other issues related to dissolution of foreign invested companies.

Dissolution of foreign invested companies is a rather complicated process and can take a long time if the company does not fully prepare the documents and follow the correct process. Therefore, choosing professional consulting services will help customers minimize risks and optimize the business dissolution process. Please contact the hotline 0906735386 for our most detailed and specific support and instructions.