Table of Contents/Mục lục
Termination of Foreign Representative Office in Vietnam: Conditions and Procedures
The termination of a foreign representative office in Vietnam is subject to legal and procedural requirements. Understanding these conditions ensures compliance and avoids delays. This guide provides an overview of the termination of foreign representative office in Vietnam process based on Decree 07/2016/ND-CP.
Conditions for Terminating a Foreign Representative Office
Foreign representative offices are subject to termination under the following conditions outlined in Decree 07/2016/ND-CP:
- Request from the Parent Company: The head office formally requests the office closure.
- Cessation of Foreign Trader’s Operations: The foreign trader ceases business activities under the laws of its registration country.
- License Expiry Without Renewal: The license expires, and no renewal application is submitted.
- Extension Refusal: Licensing authorities deny the request for a license extension.
- Revocation of License: The license is revoked due to violations as specified in Article 44.
- Failure to Comply: Either the office or its foreign trader fails to meet requirements outlined in Article 7 of the decree.
Procedures for the Termination of Foreign Representative Office
Step 1: Prepare the Dissolution Dossier
To begin, the foreign trader must submit the following documents:
- A signed notification of shutdown from an authorized representative.
- Copies of decisions confirming refusal for license renewal or revocation.
- Lists detailing creditors, debts, and employee benefits.
- The original establishment license.
Step 2: Complete Tax Obligations
Before finalizing the termination:
- Settle PIT obligations for the office head and employees.
- Pay all outstanding tax liabilities and social insurance dues.
- Finalize and terminate labor contracts along with office leases.
Step 3: Return Seals
Once the termination decision is complete, the office must return its seal to the appropriate issuing authority.
Revocation of Licenses for Representative Offices
Under Article 44, licensing authorities can revoke licenses if:
- The office fails to begin operations within one year.
- No operational reports are submitted for two consecutive years.
- Required reports are not submitted within six months of the deadline.
Responsibilities After Termination
After termination, foreign traders must:
- Publicly announce the office’s closure at its headquarters.
- Fulfill outstanding contracts and clear all debts, including taxes.
- Ensure employee benefits are fully resolved.
If relocating to a new province within Vietnam, traders need to submit only a termination notice and an employee benefit list.
Common Challenges During Termination
Finalizing tax obligations often poses difficulties. Missing invoices or receipts can lead to penalties for unexplained amounts, particularly when cumulative financial data is reviewed. Therefore, maintaining accurate documentation is essential to avoid such complications.
Legal Support for Termination
For expert assistance with the termination of foreign representative office in Vietnam, you can reach Law Plus at or call +84 966 008 030.
Related:
- Procedures for establishing a representative office for foreign investors in Vietnam
- Doing business in Vietnam
- Investing into Vietnam
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