Company Liquidation in Vietnam

If you are interested in the company liquidation procedure in Vietnam, this article offers useful information. Our lawyers in Vietnam explain the steps to complete for both types of proceedings and how we can help you.

What are the main ways to liquidate a company in Vietnam, and what do they entail?

There are two ways to liquidate a company in Vietnam:

• voluntarily: when the decision is made by the shareholders or the business owner (sole traders can also enter liquidation);
• compulsory: when the Companies Register revokes a business’ Registration Certificate or a court of law disposes the dissolution of the enterprise.

What are the grounds for company liquidation in Vietnam?

Company winding up is possible if:

• the company was created for a limited duration, and its activities are no longer prolonged;
• the owner or owners decide to terminate the company;
• all members with unlimited liability decide to close general partnerships;
• the company no longer fulfils the shareholding requirements imposed by its constitution (a minimum of 2 shareholders for an LLC with multiple shareholders, and 3 in the case of a public company) for a minimum period of 6 consecutive months and it does not change its legal form;
• the company’s certificate of registration is revoked by the Vietnamese authorities.

What are the conditions to liquidate a Vietnamese company?

No matter the type of winding up procedure a company in Vietnam undergoes, the following 2 conditions must be fulfilled:

1. the business must ensure its capability of paying its debts (the liquidator will be in charge of this step);
2. the company is not involved in litigation undergoing resolution through regular court proceedings or arbitration.

Both company and managers are jointly liable, if company liquidation was ordered by a court of law in case of revocation of the enterprise’s business certificate.

You can rely on our attorneys in Vietnam if you need representation in case of court proceedings associated with closing a company.

What are the steps to liquidate a company in Vietnam?

The steps to close a company in Vietnam depend on the type of procedure. In the case of the voluntary one, it implies the following:

1. adopting the dissolution decision by the relevant bodies, depending on the type of entity in cause;
2. notifying the Companies Register, the Tax Authority and the employees about the decision within a maximum of 7 days from adoption;
3. clearing the company’s debts (employees’ salaries, taxes, and other debts);
4. Tax Authority verification before dissolving the company;
5. filing the notification for dissolution completion with the Business Registration Office.

Upon this last stage, the Trade Register will announce the dissolution of the company.

In the case of compulsory company liquidation in Vietnam, the procedure is slightly different, meaning:

• the decision to terminate the business is ruled by a Vietnamese court of law;
• after the ruling, the company will convene a meeting to adopt the dissolution decision.

The following steps will follow as in the case of the voluntary procedure.

When must I notify the authorities about the liquidation of my company in Vietnam?

Within a maximum of 7 working days from the adoption or issuance of the decision.

NOTE: Following that, the debts of the company must be paid within a maximum 6 months established by law, meaning the assets must be sold, the debts must be paid off, and the final balance sheet drafted.

the liquidation file must be submitted within maximum 5 days from clearing all debts.

What documents must I prepare for company liquidation in Vietnam?

• the notice for dissolution;
• the liquidation decision;
• the minutes of the meeting when the decision was made (applicable for limited liability companies with multiple shareholders, general partnerships, and joint stock companies);
• the liquidation report;
• the list of creditors and debts;
• the list of employees and the payments made to them;
• the seal and seal certificate sample, if registered with the Police.

Where must I file the company liquidation file and how do I do that?

The file is lodged with the Vietnamese Business Registry, and it can be submitted online or in person through representation from our lawyers for correct compliance purposes.

Are there any other procedures to complete as part of the company liquidation procedure in Vietnam?

Yes. If you have any branch office or another type of operational unit, it must be closed prior to liquidation. Additionally, the payment of all remaining taxes and social security contributions, and closing any bank accounts is required.

Are there any specific aspects to consider in the case of foreign company liquidation in Vietnam?

Yes, in this case:

• the investment project must be terminated (a notification for termination must be issued within 15 days);
• the company must also close the direct investment capital account;
• the company must adhere to the foreign exchange and customs clearance regulations.

How long does it take to close a company in Vietnam?

The procedure takes between 6 months and one year to complete, if its records are clean. However, in cases where more complex tax requirements apply, the process is longer.

Feel free to contact us for support in company liquidation matters in Vietnam.