Procedures for dissolving representative offices of foreign enterprises

Procedures for dissolving a foreign representative office. Download documents for dissolving a representative office, closing – terminating the operation of a foreign company representative office. Cases where a representative office needs to be dissolved. All will be shared by fdiinvietnam.com in this article.

The representative office of a foreign company is mainly for communication, market research and exploration, in order to promote business opportunities for foreign traders in Vietnam. However, when this representative office does not operate effectively, it is necessary to terminate its operations to optimize costs. The following article of fdiinvietnam.com will provide detailed instructions on specific cases and the documents and procedures required to terminate the representative office of a foreign trader in Vietnam.

Cases of dissolution of representative offices of foreign traders

Representative offices of foreign companies and foreign traders in Vietnam are allowed to carry out dissolution procedures, also known as procedures to terminate representative office operations, in the following cases:

• Dissolution of representative office at the request of foreign traders;
• When a foreign trader ceases to operate under the laws of the country where it is established or registered to do business;
• The representative office license of a foreign trader expires but is not renewed;
• The representative office license of a foreign trader has expired but has not been agreed to be extended by the state agency;
• Belonging to the case of revocation of representative office license according to the provisions of Article 44 of Decree 07/2016/ND-CP;
• Foreign traders and representative offices no longer meet one of the conditions in Articles 7 and 9 of Decree 07/2016/ND-CP.

>> See more: Distinguishing between representative offices of Vietnamese companies and foreign companies.

Documents and procedures for dissolving representative offices of foreign companies in Vietnam

The steps to terminate the operations of representative offices of foreign traders and foreign companies in Vietnam are as follows:

➨ Step 1: Decide to terminate the representative office and complete financial obligations and labor regimes for employees working at the representative office.

➨ Step 2: Carry out procedures to terminate the tax code of the representative office, finalize personal income tax for the head of the representative office and employees working at the representative office.

Before submitting an application for termination of tax code validity, the representative office must complete:

• Tax settlement procedures with tax authorities;
• Personal income tax settlement procedures for representative office managers and employees working at the office.

Then, the representative office submits an application to terminate the tax code to the tax authority.

Place of submission: Tax Department – where the representative office is located.

Time to process application:

• Within 2 working days from the date the tax authority receives the dossier to terminate the tax code of the representative office, the tax authority must notify the taxpayer that it has ceased operations and is carrying out procedures to terminate the tax code;
• Within 3 working days from the date the representative office has completed its tax payment obligations to the tax authority, the tax authority shall issue a “Notice of termination of tax code validity to the taxpayer”.

➨ Step 3: Complete procedures to close the representative office’s bank account.

The account of a foreign company’s representative office in Vietnam is used to receive money from the parent company abroad and to serve other activities of the representative office. Therefore, when there is a document terminating the tax code of the representative office, the head of the representative office must go to the bank to complete the account closure procedures according to regulations.

➨ Step 4 : Return the seal to the provincial/municipal police agency where the representative office is located.

In case the representative office’s seal is issued by the police agency, the representative office must complete the procedure to return the seal and the seal sample registration certificate to the police agency.

In case the seal is carved by the representative office itself, there is no need to go through the procedure of returning the seal.

Place to submit application: Provincial/municipal police agency – where the representative office is located.

Processing time: 3 – 5 working days.

➨ Step 5 : Submit application for dissolution of representative office.

Agency receiving dossiers for dissolution of representative offices:

• Department of Industry and Trade: In case the representative office has a head office address not located in an industrial park, export processing zone, sophisticated industrial park, or high-tech park.
• Management board of industrial parks, export processing zones, economic zones, high-tech zones: In case the head office of the representative office is located in an industrial park, export processing zone, economic zone, high-tech zone.

Application form:

• Submit in person or by mail or online to the licensing authority.

Time limit for processing application:

• Within 3 working days from the date of submission of complete documents for dissolution of representative office, the licensing authority will check and request additional documents if the documents are not complete, or issue a valid notice. The request for additional documents can be made a maximum of 1 time during the entire processing time of the documents;
• Within 5 working days from the date of valid review of the application, the licensing authority shall publish information on the electronic information page about the termination of the proposed representative office.

Obligations to be performed upon termination of representative office operations

In addition to carrying out procedures for dissolving representative offices as prescribed in Articles 36 and 37 of Decree 07/2016/ND-CP, foreign traders and representative offices must publicly post information about the termination of operations of the above representative offices and perform other obligations as prescribed by law when the representative office is dissolved.

Foreign traders are responsible for performing contracts, fully paying debts, including tax debts; resolving all legal rights of employees working at representative offices.

Above are the shares of fdiinvietnam.com about the procedures for terminating the representative office of a foreign company in Vietnam. If you need more information, you can contact fdiinvietnam.com at 0978 578 866 (North)  –  033 9962 333 (Central)  –  033 9962 333 (South) for answers.

Some frequently asked questions when closing a foreign company representative office

1. How many cases are there to dissolve representative offices of foreign traders?

Representative offices of foreign traders can resolve in one of the following six cases:

1. Dissolution at the request of foreign traders;
2. When a foreign trader ceases to operate under the laws of the country where it is established or registered to do business;
3. The representative office license of a foreign trader expires but is not renewed;
4. The representative office license of a foreign trader has expired but has not been agreed to be extended by the state agency;
5. Representative office whose operating license is revoked;
6. Foreign traders and representative offices no longer meet one of the conditions in Articles 7 and 9 of Decree 07/2016/ND-CP.

2. What documents are required to dissolve a representative office and submit them to the Department of Industry and Trade?

The dossier for dissolution (termination of operation) of a representative office of a foreign trader includes:

1. Notice of termination of representative office operations (according to prescribed form);
2. A copy of the document of the state agency not agreeing to extend the representative office license or a copy of the decision to revoke the representative office license of the licensing agency;
3. List of creditors, unpaid debts, including tax debts and social insurance debts;
4. List of employees and corresponding employee benefits;
5. Original representative office license.

3. Where to submit documents to dissolve a foreign company representative office?

• In case the representative office has a head office address that is not located in an industrial park, export processing zone, sophisticated industrial park, or high-tech park, the dossier for dissolution of the representative office must be submitted to the Department of Industry and Trade of the province/city where the head office is located;
• In case the representative office is located in an industrial park, export processing zone, or high-tech zone, the dossier for dissolution of the foreign company’s representative office must be submitted to the Management Board of the industrial park, export processing zone, economic zone, or high-tech zone.

Call us at  0978 578 866 (North)  –  033 9962 333 (Central)  –  033 9962 333 (South)  for support.