SHUTDOWN AND DISSOLUTION

FOREIGN REPRESENTATIVE OFFICES OR BRANCHES IN VIETNAM

Vietnam-based representative office of a foreign investor means a dependent unit, a lawful office in Vietnam, allowed to recruit staff to manage and promote sale contracts with local business partners, research and develop products, seeking opportunities for the purchase or sale of goods and provision of services. A foreign representative office is a simple form of investment in Vietnam to enhance business from overseas, with multiple advantages while fewer risks regarding the required business compliance procedures such as investment capital, tax, accounting, and auditing. And it is easy to be extended or terminated or dissolved. The expatriate employees who work for representative office can obtain work permit and two years multiple visa (temporary residence card) for themselves and their family in Vietnam.

Shutdown or dissolution of a Vietnam-based representative office or branch of a foreign trader is a legal procedure to terminate any activity, terminate the existing and license of a dependent unit of the foreign trader in Vietnam. Procedures for shutdown or dissolution of a representative office are more and more strict and complicated in comparison to registration procedures

CASES OF SHUTDOWN OR DISSOLUTION OF FOREIGN REPRESENTATIVE OFFICES OR BRANCHES

1. A representative office or branch shall be shut down if: 
2. It is requested by its head office;
3. The foreign trader ceases to operate according to laws of the country or territory in which such foreign trader is established or registered.
4. The License for Establishment of the representative office or branch is expired but its head office does not apply for an extension of the license.
5. The licensing agency refuses to grant an extension of the expired License for Establishment of the representative office or branch.
6. The License for Establishment of the branch or representative office is revoked as prescribed in cases of failure to come into operation for 01 year and failure to enter into transactions with licensing agencies or failure to submit reports on the operation of the representative office or branch for 02 consecutive years or failure to submit reports to the licensing agency within 06 months from the deadline of submission or at the written request of the licensing agency.

APPLICATIONS FOR SHUTDOWN OR DISSOLUTION OF FOREIGN REPRESENTATIVE OFFICES OR BRANCHES

An application for shutdown of a representative office or branch shall include:

1. A notification of shutdown of the representative office or branch using the form issued by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.
2. Copies of written refusals of grant of extension of the license or establishment of the representative office or branch or a copy of the decision on revocation of the license for establishment of the representative office or branch released by the licensing agency;
3. Lists of creditors and the amount of debts, including outstanding taxes and social insurance premiums;
4. Lists of employees and their current benefits;
5. The original License for Establishment of the branch or representative office.
6. The head of the closed representative office or branch and their head office shall be responsible for the reliability and accuracy of their application for shutdown or dissolution of foreign representative offices or branches.

PROCEDURES FOR PROCESSING OF APPLICATIONS FOR SHUTDOWN OR DISSOLUTION OF FOREIGN REPRESENTATIVE OFFICES OR BRANCHES

1. The foreign trader shall submit the applications for shutdown of their representative office or branch to the licensing agency directly or by post or only (where applicable).
2. Within 03 working days from the date of receipt of the application, the licensing agency shall examine such application and request the applicant to complete the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of the application.
3. Within 05 working days from the date of receipt of the valid application, the licensing agency shall publish the decision on shutdown of the representative office or branch on their portal.

OBLIGATIONS RESULTING FROM SHUTDOWN OR DISSOLUTION OF FOREIGN REPRESENTATIVE OFFICES OR BRANCHES

1. In addition to the execution of procedures for shutdown of representative offices or branches stipulated above, the representative office or branch shall publicly put up the notice of the shutdown at their office and fulfill other involving obligations under provisions of laws.
2. Every foreign trader having closed representative offices or branches shall fulfill obligations to contracts and debt settlement including outstanding taxes and settlement of legal benefits of employees working for such representative offices or branches in compliance with provisions of laws.
3. Outstanding taxes and settlements will be determined under inspection procedures by tax department. The inspection scopes are based on cashflows from headquarter, lawful invoices for paid expenditures, taxable income of the chiefs, foreign employees, local employees…
4. Foreign representative offices or branches shall manage the liquidation and sell invoices for its assets such as car, office equipments, close local bank accounts prior to repay balance of money to the headquarter.  

VIVA Business Consulting has successfully provided service of consulting and shutdown or dissolution of foreign representative offices or branches in Vietnam for thousands of brands in lawful and optimal manners.

 

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