9th Floor Diamond Plaza Building, 34 Le Duan, Ben Nghe Ward, District 1, Ho Chi Minh City
info@bkclaw.vn
0901 333 341
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When deciding to dissolve the representative office of a foreign company in Vietnam, this is not only a significant turning point in their business strategy but also a complex process that requires meticulous attention to every detail. This decision often reflects changes in the company’s global objectives, financial situation, or organizational structure. In this article, we will examine the key factors involved in the dissolution process, from the reasons behind the decision to the necessary implementation steps, and its impact on relevant parties. Let’s explore this process in detail to better understand the procedures and important considerations to ensure the dissolution is carried out efficiently and in full compliance with the law.
Pursuant to Clause 2, Article 44 of the Law on Enterprises 2020:
“A representative office is a dependent unit of an enterprise, tasked with representing and protecting the authorized interests of the enterprise. The representative office does not perform the business functions of the enterprise.”
The representative office of a foreign trader functions as a liaison office, conducts market research, and promotes business and investment opportunities in Vietnam. The representative office must comply with the provisions of Vietnam’s Commercial Law.
Therefore, upon termination of operations, the foreign trader must carry out the procedures for closing or dissolving the representative office in accordance with Vietnamese law.
Pursuant to Article 35 of Decree 07/2016/ND-CP, the cases for termination of operations of a representative office or branch are as follows:
– At the request of the foreign trader.
– When the foreign trader terminates its operations under the law of the country or territory where it was established or registered for business.
– Upon expiration of the operating term specified in the License for Establishment of the Representative Office or Branch, where the foreign trader does not request an extension.
– Upon expiration of the operating term specified in the License for Establishment of the Representative Office or Branch without approval for extension from the Licensing Authority.
– The License for Establishment of the Representative Office or Branch is revoked in accordance with Article 44 of this Decree.
– The foreign trader, representative office, or branch no longer satisfies one of the conditions stipulated in Article 7 and Article 8 of Article 35 of Decree 07/2016/ND-CP.
Pursuant to Article 36 of Decree 07/2016/ND-CP, the dossier for termination of operations of a representative office or branch includes:
(1) One (01) set of dossier, comprising:
Step 1: At least 30 days prior to the expected date of dissolution of the foreign trader’s representative office, the representative office must publicly post a notice of termination of operations at its headquarters.
Step 2: Submission of dossier to terminate the validity of the tax code
Pursuant to Point b, Clause 3, Article 14 of Circular 105/2020/TT-BTC, the dossier includes:
The tax authority shall finalize the tax settlement for the representative office and concurrently finalize personal income tax for the foreign chief representative and employees working at the representative office.
Step 3: Return the seal to the provincial/city police authority at the location of the representative office.
– If the seal of the representative office was issued by the police authority, the representative office must carry out procedures to return the seal and the certificate of seal sample registration to the police authority.
– If the seal was self-engraved by the representative office, there is no need to carry out seal return procedures.
Pursuant to Point b, Clause 1, Article 18 of Decree 99/2016/ND-CP, upon termination of operations, the representative office is responsible for returning the seal sample to the seal registration authority. The dossier includes:
The police authority shall receive the seal return dossier and issue a Notice of Seal Cancellation for the representative office within 3–5 working days.
Step 4: Carry out procedures related to employees
The foreign trader must fulfill its obligations toward employees in accordance with the Labor Code 2019 and guiding documents regarding salary regimes, severance allowances, social insurance, etc., to ensure the legitimate rights and interests of employees who will be terminated due to the closure of the foreign representative office.
Step 5: Close the bank account of the representative office
The foreign trader shall contact the bank where the representative office’s account was opened to receive guidance on the procedures for closing the bank account.
Step 6: Submission of the dossier for dissolution of the representative office
The authority receiving the dissolution dossier for the representative office:
Methods of submission:
Time limit for processing the dossier:
– Regarding tax declaration and payment obligations: Ensure that the representative office has completed all tax declaration and payment obligations with the tax authority and obtained a certificate from the tax authority confirming completion of tax obligations before submitting the notice to the Business Registration Office.
– The foreign trader must fulfill its obligations toward employees in accordance with the Labor Code 2019 and guiding documents regarding salary regimes, severance allowances, social insurance, etc., to ensure the legitimate rights and interests of employees who will be terminated due to the closure of the foreign representative office.
The support and consulting service for dissolution procedures of representative offices of foreign companies provided by BKC Law offers comprehensive solutions to help you complete the process quickly and efficiently. We will guide you through each step of the dissolution process, from dossier preparation, carrying out legal procedures, to resolving tax and financial issues. Our experienced team of attorneys is committed to providing dedicated support, minimizing legal risks, and ensuring that all requirements of competent authorities are met on time.
For free legal consultation at BKC Law, you can contact our attorneys via the following information:
Phone: 0901 3333 41
Email: info@bkclaw.vn
Office in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Office in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City
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41 Rockets, Binh Tri Dong B, Binh Tan District, Ho Chi Minh City.
info@bkclaw.vn
0901 3333 41
9th Floor, Diamond Plaza Building, 34 Le Duan, Ben Nghe Street, District 1, Ho Chi Minh City.
info@bkclaw.vn
0901 3333 41