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Company Liquidation in Vietnam

Company Liquidation in Vietnam

Articles 207 to 210 in the Company Act provide for company liquidation in Vietnam. These articles cover the procedures through which local and foreign investors can close companies in Vietnam, as well as conditions under which their activities can be terminated.

If you are interested in the procedure of winding up a company in Vietnam, this article is useful. In it, our lawyers in Vietnam explain the steps to complete both types of proceedings and how we can help you.

Reasons to close a company in Vietnam

One of the most important aspects related to company liquidation in Vietnam is the grounds under which a business can be dissolved. Based on them, a suitable procedure can be commenced.

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 (please note that this ground is available for private limited liability companies and sole proprietorships);
  • all members with unlimited liability decide to close general and limited liability partnerships;
  • the company no longer fulfills the shareholding requirements imposed by its constitution or by the law for a minimum period of 6 consecutive months;
  • the company’s certificate of registration is revoked by the Vietnamese authorities;
  • the company goes into insolvency followed by bankruptcy, thus becoming unable to pay its debts to the creditors.

Company dissolution in Vietnam implies voluntary and compulsory or judicial proceedings.

Our law firm in Vietnam can assist during both types of procedures.

Company liquidation conditions in Vietnam

No matter the type of winding up procedure a company in Vietnam undergoes, the following 3 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;
  3. 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.

Do not hesitate to rely on our attorneys in Vietnam if you need representation in case or court proceedings associated with closing a company.

Company winding up steps 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. clear the company’s debts with the creditors;
  4. 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.

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

If we are to set a timeline for company liquidation in Vietnam, here is what to expect:

  • the voluntary procedure can be completed within about 6 months;
  • the compulsory procedure often exceeds 6 months;
  • within 5 days of obtaining the liquidation decision, the Trade Register will update the company’s status with “dissolved”.

Our team is also made of accountants in Vietnam. They work alongside our lawyers who can help with immigration and obtaining residency in Vietnam.

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