How is the business suspension procedure for FDI enterprises implemented? To understand more about this procedure, let’s find out the law with Lawyer X through the article below.
Legal grounds
Enterprise Law 2020
Investment Law 2020
Decree 01/2021/ND-CP
What is an FDI enterprise?
According to the law, the definition of a foreign-invested economic organization is as follows:
Foreign-invested economic organization means an economic organization whose foreign investors are members or shareholders.
From this definition, we can understand that FDI enterprises are enterprises with foreign direct investment capital, regardless of the percentage of capital contributed by foreign parties. Enterprises with foreign direct investment capital include:
– Besides, enterprises with 100% foreign capital
– Moreover, enterprises with foreign nationals; organizations established under foreign law investing (contributing capital for the establishment, purchasing contributed capital).
Conditions for temporary suspension of business for FDI enterprises
Enterprises have the right to suspend business. But must comply with the provisions of Article 206 of the Enterprise Law 2020 on business suspension. Whereby:
Enterprises must notify in writing the business registration agency within 03 working days; before the date of business suspension; or resume business before the announced deadline.
Competent authorities may request an enterprise to suspend its business in the following cases:
– Suspending conditional business lines; industries and professions with conditional market access for foreign investors; when detecting that the enterprise does not fully satisfy the corresponding conditions as prescribed by law;
– Suspend business at the request of relevant tax administration agencies; environment and other provisions of relevant laws;
Obligations of enterprises when temporarily suspending business for FDI enterprises
Obligations include:
– Finalization of the outstanding tax amount
Payment of financial obligations to customers and related parties. Unless otherwise agreed by the parties
– Pay enough wages for employees
– Settlement of debts on health insurance, unemployment insurance, and other social insurances
After fulfilling all the above-mentioned obligations, the enterprise can proceed with the procedures for business suspension.
Order and procedures for business suspension of FDI enterprises
The suspension procedure includes the following steps:
Step 1: Prepare documents to suspend business for FDI enterprises
You need to prepare 01 sets of documents by current regulations. The following documents are documents corresponding to the procedures for business suspension of foreign-invested enterprises in Vietnam. There may be differences depending on the type of company. Consists of:
– Notice of suspension of investment projects;
– The investor’s decision to suspend the investment project;
– Investment registration certificate;
– Besides, certificate of business registration;
– Notice of business suspension of enterprises in Vietnam;
– The decision to suspend the business of the owner/members/board of management;
– Minutes of a meeting of the general meeting of shareholders/members council (for limited liability companies with 2 or more members or joint-stock companies).
Note: If the application is not submitted by the legal representative of the company, an authorization letter is required for the representative to apply.
Step 2: Submit your application
When conducting business suspension for FDI enterprises, the founder of the enterprise or the authorized representative shall submit a complete application for suspension as prescribed. At the Business Registration Office where the business location is located; or apply for business registration online.
Step 3: Receive and process the application
After receiving the business registration documents. The Business Registration Office hands over the receipt check the validity of the documents and issues a certificate of the enterprise’s business suspension registration.
A written certification that the enterprise, branch, representative office, or business location has registered to continue doing business before the notified deadline, within 03 working days. From the date of receipt of valid dossiers.
Step 4: Return the result
Within 3 working days. The Business Registration Office updates information on the National Business Registration Database. Publication on the national portal on business registration.
The duration of business suspension must not exceed 1 year. After the notice period expires, if the enterprise continues to suspend its business, it must further notify the Business Registration Office.
However, the total period of business suspension in a row must not exceed 2 years.
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Frequently asked questions
In case the taxpayer goes out to do business before the time limit specified in the business suspension notice, a written notice must be sent to the tax authority directly managing and concurrently submitting tax declaration dossiers as prescribed.
A dossier of business resumption ahead of time must contain the following main contents:
– Notice of business resumption before the announced deadline
– Authorization letter to carry out the procedure
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