How to Close a Business in Vietnam?
All corporations, companies, partnerships, branch offices, representative offices and other business entities are legal entities in Vietnam which can only be dissolved through formal procedures.
I. What are the major challenges with closing a business in Vietnam?
The main thing to remember throughout the process is that the dissolving company, a branch office or a representative office, one should pay close attention to the involvement of all key stakeholders, i.e. the employees, customers, creditors, business partners and relevant authorities.
The following are key information to gather for thorough analysis
-Company size in terms of capital and number of employees?
-Enterprise’s business sector?
-Tax invoice usage declaration?
-Annual profit?
-Compliance with tax procedures?
-Administrative violations in the field of taxation?
-Any outstanding tax?
-Tax document filing records?
-Other tax matters?
II. What does the dissolution process involve?
Once an analysis has been through, the next procedures mostly deal with reporting and submitting the relevant documents to the various regulatories and tax authorities at each step of the process, terminating contracts, liquidating assets and settling liabilities, and general administrative work such as returning the corporate seal, registration certificates, and having the company’s name removed from the system of the license authorities.
III) How to prepare document to close a business in Vietnam?
1. Documents submitted to the licensing authority in Vietnam
-Liquidation notice of enterprise;
-Minutes of the meeting of Management Board/ Board of Directors decided on the dissolution of enterprises;
-The company’s decision on liquidation;
-Report on enterprise asset liquidation;
-The list of creditors and the paid debt;
-Documents evidencing that enterprise has fulfilled all of its tax;
-Confirmation on social insurance for employees after the dissolution decision;
-The seal and certificate of seal sample registration.
2. Documents submitted to the tax authority in Vietnam
-Liquidation notice of enterprise;
-Minutes of the meeting of Management Board/ Board of Directors decided on the dissolution of enterprises;
-The company’s decision on dissolution;
-Audit reports and tax settlements;
-The financial statements for the year to date the decision on dissolution;
-The company’s tax liabilities audited by tax authority;
-Verification of tax obligations of the enterprise.
Closing a business in Vietnam might be a lengthy process and more complicated than setting up a company in Vietnam. Sometimes, it is important to make a decision to exit and start a new venture. As a law firm in Vietnam, we do assist clients to close the business, exit the investment and deal with pending issues with licensing authorities including department of planning and investment, department of labour, tax bureau and others.
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