Enterprise Dissolution Process, Dossiers, and Procedures: A Comprehensive Guide for FDI Enterprises

Are you operating a foreign-invested enterprise (FDI) in Vietnam and feeling overwhelmed by the pressure of closing your company? Are you wondering whether the enterprise dissolution process is complicated and how to ensure full compliance with legal requirements when dissolving a company?In this article, KMC’s experts provide comprehensive guidance on the process, dossiers, and procedures for dissolving an FDI enterprise. A step-by-step guide designed to ensure legal compliance while optimizing time, effort, and costs for enterprises.

Distinguishing Enterprise Dissolution and Bankruptcy

Many people still confuse the concepts of enterprise dissolution and enterprise bankruptcy. In fact, these are two entirely different concepts:

According to the Law on Enterprises 2020:

• Enterprise dissolution refers to the termination of the existence of an enterprise based on the decision of the enterprise itself or a competent authority.
• Bankruptcy refers to the status of an enterprise or cooperative that becomes insolvent and is declared bankrupt by a decision of the People’s Court.

Cases of Company/Enterprise Dissolution

According to the Law on Enterprises, there are four circumstances under which an enterprise must undergo dissolution procedures (voluntary or compulsory), including:

1. Expiration of the operation term stated in the company charter without any extension decision.
2. Pursuant to the decision of the private enterprise owner for a private enterprise; all general partners for a partnership; the Members’ Council or company owner for a limited liability company; or the General Meeting of Shareholders for a joint stock company.
3. The company fails to maintain the minimum required number of members continuously for six months without carrying out procedures to convert the enterprise type.
4. The enterprise registration certificate or business license is revoked (unless otherwise provided under the Law on Tax Administration).

In this article, KMC will focus on providing guidance on the voluntary company dissolution process based on the enterprise’s own decision.

Conditions for Enterprise Dissolution

According to the Law on Enterprises 2020, to complete the dissolution procedures, an enterprise must:

• Ensure full settlement of all debts and other property obligations.
• Not be involved in any dispute proceedings before a Court or Arbitration body.
• Have fulfilled all tax and insurance obligations in accordance with regulations.

For FDI enterprises, obtaining confirmation of fulfillment of obligations relating to capital contributions, overseas profit remittance, and other specific procedures is extremely important. If the enterprise is unfamiliar with these requirements, please contact legal advisors or specialists directly for accurate consultation and risk mitigation.

What Does an Enterprise Dissolution Dossier Include?

An enterprise dissolution dossier generally requires the following key documents:

• Application for enterprise dissolution.
• Financial statements prepared up to the date of the dissolution decision.
• List of creditors and debts that have been fully settled.
• List of completed tax and insurance obligations.
• Company seal and the original Enterprise Registration Certificate.

Guidelines on the FDI Enterprise Dissolution Process

The dissolution process for a foreign-invested enterprise (FDI) includes the following steps:

Step 1: Terminate the Investment Project and Return the Investment Registration Certificate

• The company must submit the decision on termination of the investment project (together with the Investment Registration Certificate) to the Investment Registration Authority within 15 days from the date of the decision.
• The estimated timeframe for completion of the investment project termination procedure is 15 working days from the date of submission of a valid dossier.

Step 2: Approve the Enterprise Dissolution Decision

The enterprise dissolution decision for an FDI company must include the following contents:

• Name and head office address of the enterprise;
• Reason for dissolution;
• Timeline and procedures for liquidation of contracts and settlement of the enterprise’s debts; the period for debt repayment and contract liquidation must not exceed six (06) months from the date of approval of the dissolution decision;
• Plan for handling obligations arising from employment contracts;
• Full name and signature of the legal representative of the enterprise.

Step 3: Publish the Enterprise Dissolution Decision

Within seven (07) working days from the date of approval of the Dissolution Decision, the FDI enterprise must send the Decision to the following authorities:

• Submit the Notification, Decision, and certified true copy of the Minutes of Meeting of the Members’ Council/General Meeting of Shareholders to the Business Registration Office for procedures relating to publication of the dissolution decision on the National Enterprise Registration Information System;
• Send the Dissolution Decision and Minutes of Meeting to the tax authority and employees of the enterprise;
• Publicly post the Dissolution Decision at the head office, branches, and representative offices (if any) of the enterprise;
• If the enterprise still has outstanding financial obligations, a debt settlement plan must be enclosed with the Dissolution Decision and sent to creditors and related parties with rights and obligations.

Step 4: Conduct Enterprise Asset Liquidation and Register Procedures for Remittance of Remaining Capital Contributions of Foreign Investors Overseas (if any)

The asset liquidation minutes must be prepared in writing and submitted together with the dissolution notification dossier.

Step 5: Carry Out Procedures for Tax Identification Number (TIN) Closure

The enterprise shall submit an official request to the tax authority (together with notarized copies of the Enterprise Registration Certificate and Tax Registration Certificate) to request tax finalization and closure of the company’s Tax Identification Number (TIN).

Step 6: Submit the Dissolution Notification to the Business Registration Authority

Within seven (07) days after full settlement of all company debts, the legal representative of the company must submit the dissolution registration dossier to the provincial Business Registration Authority where the company’s head office is located or submit it through the National Business Registration Portal: dangkykinhdoanh.gov.vn.

Timeline for FDI Enterprise Dissolution

• Implementation timeline: The dissolution process may proceed after 180 days from the date the dissolution decision is submitted to the Department of Planning and Investment, provided there are no objections from related parties.
• Processing timeline: Within five (05) working days from the date of receipt of the dissolution dossier, the Business Registration Authority shall update the legal status of the enterprise on the National Enterprise Registration Database.

Actions Required After Receiving the Company Dissolution Decision

After receiving the dissolution decision, the enterprise will need to carry out the following necessary procedures:

• Close the company bank account: Bring the dissolution decision to the bank to complete the account closure procedure.
• Handle digital assets: This is an issue often overlooked. Remember to terminate or transfer ownership of the company’s social media accounts, website, and domain names. This helps prevent risks of impersonation or information leakage.
• Document retention: In accordance with the Law on Accounting, accounting records and books must be retained for a minimum period of five (05) years. These documents should be properly organized and securely archived.

Professional FDI Enterprise Dissolution Services at KMC

Due to specific corporate governance cultures and complex legal requirements, FDI enterprises, particularly Japanese-invested enterprises, should seek support from experienced consulting firms to ensure a company dissolution process that is efficient, cost-effective, time-saving, and most importantly, compliant with Vietnamese laws and regulations.

If you are a manager of an FDI enterprise and are looking for a professional service provider or an expert partner with extensive knowledge of Vietnamese laws and Japanese corporate culture to provide comprehensive support throughout the enterprise dissolution process, please contact KMC today.

KMC is a reputable company specializing in providing professional tax, accounting, and legal solutions for FDI enterprises, especially Japanese-invested enterprises.

KMC’s company dissolution services provide optimized support for FDI enterprises through:

• Maximizing time efficiency and minimizing errors throughout the process;
• Handling specific matters such as overseas profit remittance and fixed asset disposal;
• Ensuring confidentiality and maintaining credibility throughout the entire process.

With our team of leading lawyers and industry experts, we provide in-depth legal guidance and tailored solutions throughout the entire process. We ensure that the company dissolution process is carried out efficiently and cost-effectively, while also providing comprehensive support for related tax and legal matters.

For comprehensive consultation and specialized support from KMC experts, please contact our hotline: 081 489 4789.