In order for a foreign investor to completely terminate his/her legal rights and obligations, the investor must carry out full procedures for dissolution of the enterprise in accordance with the Law on Enterprises. These regulations are specified from Article 207 to Article 210 of the Law on Enterprises 2020. We would like to summarize “Dissolution of foreign-invested enterprises in Vietnam” below.
Legal grounds
- Enterprise Law 2020;
- Investment Law 2020;
- Decree 01/2021/ND-CP dated January 4, 2021;
- Circular 01/2021/TT-BKHDT dated 16/03/2021.
The definition of foreign-invested enterprises
Foreign-invested enterprise is an enterprise established in the territory of another country by an investor of one country with all or part of its capital to conduct profit-making business activities.
“Many countries around the world do not distinguish between domestic investment capital and foreign investment capital and therefore, there is no concept of foreign-invested enterprises; they call enterprises established on the basis of capital contribution. of foreign investors according to their form of legal organization, for example: limited liability company, joint stock company…
The Investment Law 2020 does not directly mention this type of enterprise, but rather defines it in a general way in Clause 17, Article 3 as follows: “Foreign-invested economic organization is an economic organization with foreign members or shareholders.”
Thus, according to this regulation, we can understand basically, FDI enterprises are enterprises with foreign direct investment capital, regardless of the percentage of capital contributed by foreign parties. Foreign direct investment enterprises include:
– Enterprises with 100% foreign capital.
– Enterprises with foreign nationals, organizations established under foreign law investing (contributing capital for establishment, buying contributed capital).
Procedures for issuance of foreign investment registration certificates
For investment projects subject to decision on investment policies, the investment registration authority shall issue an investment registration certificate to the investor within 05 working days from the date of receipt of the decision on investment policy. invest.
For an investment project that is not subject to a decision on investment policies, the investor shall carry out the procedures for issuance of an Investment Registration Certificate according to the following provisions:
Implementation process:
– Before carrying out the procedures for issuance of the Investment Registration Certificate, the investor shall declare online information about the investment project on the National Foreign Investment Information System. Within 15 days from the date of online declaration, the investor shall submit the application for the Investment Registration Certificate to the Investment Registration Authority.
– After the Investment Registration Authority receives the application, the investor is granted an account to access the National Information System on Foreign Investment to monitor the processing of the application.
– The investment registration agency uses the National Foreign Investment Information System to receive, process and return the results of investment registration dossiers, update the status of application processing and issue codes to investors.
Conditions for enterprise dissolution
– At the end of the operation term stated in the company’s charter, the enterprise does not have an extension decision;
– According to the decision of the business owner, for private enterprises, of all general partners, for the type of partnership, of the Members’ Council, the company owner, for the type of company. limited liability company, of the General Meeting of Shareholders for the type of joint stock company;
– The company no longer meets the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out the procedures for enterprise transformation;
– The Certificate of Business Registration has been revoked.
Note: The enterprise only dissolves when it is sure to pay off all debts and other property obligations and the enterprise is not in the process of settling disputes at court or arbitration.
Dossier for dissolution of foreign-invested enterprises
– Notice of dissolution of foreign-invested enterprises;
– Minutes of the Company’s meeting on dissolution and fulfillment of financial obligations (Not applicable to the type of one-member limited liability company)
– Decision on dissolution of the Owner, Chairman of the Board of Members/Chairman of the Board of Directors of the Company, depending on the type of business chosen by the enterprise.
– Report on project implementation progress to the time of dissolution;
– 03 issues of the announcement of dissolution of the Company
– Minutes of seal return and seal sample certificate
– The decision to close the tax code of the Tax Department of the province/city directly under the Central Government
Dissolution of foreign-invested enterprises in Vietnam
Step 1: Termination of investment project
o The enterprise sends the decision to terminate the operation of the investment project (enclosed with the Investment Registration Certificate) to the Investment Registration Authority within 15 days from the date of the decision.
o Expected time to complete the termination of investment projects is 15 working days from the date of submission of valid dossiers.
Step 2: Approving the decision to dissolve the foreign-invested enterprise:
The decision includes:
– Name and address of the head office of the enterprise;
– Reason for dissolution;
– Time limit and procedures for contract liquidation and payment of debts of the enterprise; the time limit for debt payment and contract liquidation must not exceed 06 months from the date of approval of the dissolution decision;
– A plan to handle obligations arising from the labor contract;
– Full name and signature of the legal representative of the enterprise.
Step 3: After the dissolution decision is passed:
Within 07 working days from the date of approval of the dissolution decision, the enterprise must:
– Send the Notice, Decision and valid copy of the Minutes of the Members’ Council to the Business Registration Office;
– Send the dissolution decision and meeting minutes to the tax authorities and employees in the enterprise;
– Post the dissolution decision on the National Enterprise Registration Portal and must be posted publicly at the head office, branch, representative office (if any) of the enterprise.
If the enterprise has unpaid financial obligations, it must enclose the decision on dissolution of the debt settlement plan to its creditors, persons with related interests and obligations.
Step 4: Conduct liquidation of business assets
Step 5: Proceed with the procedure to close the company tax code
Enterprises send an official letter to the tax office (enclosed with a notarized copy of the Business Registration Certificate and the Tax Registration Certificate) to request tax finalization and tax identification.
A dossier of tax code closure includes:
– Official letter to close the tax code of the business
– Minutes confirming the refund of the invoice
– Financial statements certified by auditors
– Book of accounting vouchers attached
– Decision on dissolution of the Owner, Chairman of the Board of Members/Chairman of the Board of Directors of the Company, depending on the type of business chosen by the enterprise;
Step 6: Procedures at the business registration office
Within 7 days from the date of payment of all debts of the company, the legal representative of the foreign-invested company must send the dissolution registration dossier to the provincial business registration office where the company is located. head office or through the National Business Registration Portal at the address dangkytinhdoanh.gov.vn.
Note: In case the customer uses the seal issued by the police agency, the customer is responsible for returning the seal, the certificate of seal sample registration to the police agency for issuance of a certificate seal has been revoked.
Implementation time: after 180 days from the date of sending the dissolution decision to the Department of Planning and Investment, if there is no objection from the parties, within 5 working days the Business Registration Authority shall update the legal status. of enterprises on the National Business Registration Database.
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Frequently asked questions
The debts of the enterprise are prioritized for payment as follows:
• Debts in salary, severance allowance, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under collective labor agreement and contract signed labor;
• Tax debt;
• Other debts;
After paying the costs of dissolution of the enterprise and debts, the remainder shall be divided among the owners of the private enterprise, members, shareholders or the company owner according to the proportion of ownership of contributed capital or shares.
An enterprise shall only be dissolved in the following cases:
• The term of operation stated in the company’s charter expires without a decision on extension;
• According to the decision of the business owner, for a private enterprise, of all general partners, for a partnership, of the Members’ Council, of the company owner, for a limited liability company, of General Meeting of Shareholders for joint-stock companies;
• The company no longer meets the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out procedures for transformation of enterprise type;
• The Certificate of Business Registration is revoked, unless otherwise provided by the Law on Tax Administration.
The law does not specifically stipulate how many years an enterprise must operate before being dissolved. Enterprises have the right to dissolve according to the cases prescribed by the Law on Enterprises.
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