How to Close a Business in Vietnam: Company Dissolution Guide

A registered company in Vietnam carries ongoing obligations whether or not you’re actively trading. Even an idle entity still has to keep up with annual tax filings, statutory audits, and social insurance contributions. Leaving an inactive company on the register is how penalties and liabilities quietly accumulate. 

If you’re considering halting your operations in Vietnam, the Law on Enterprises 2020 and the amended Investment Law 2025 give you two clear options. You can formally dissolve your entity to clear all liabilities, or you can apply for a temporary suspension.

This guide walks through the full dissolution process under the most current regulations. We’ll also cover when suspension makes more sense, and what foreign investors should weigh before choosing either path.

What It Means to Dissolve a Company in Vietnam

Under Article 207 of the Law on Enterprises 2020 (Law No. 59/2020/QH14), dissolution is the formal termination of a company’s legal existence. The enterprise is wound up, its assets liquidated, its debts paid, and its name struck from the National Business Registration Database.

Dissolution is permanent, and you cannot resume operations once the process is complete. After your Enterprise Registration Certificate (ERC) is revoked and your tax code is closed, the entity is gone for good.

It’s also different from bankruptcy. In most cases, dissolution is a decision you make to close because the company is solvent and able to settle its affairs. Bankruptcy is court-supervised, creditor-driven, and governed by the Law on Bankruptcy rather than the Enterprise Law. If your company cannot pay its debts, you have to undergo bankruptcy proceedings instead.

When does an enterprise have to be dissolved?

Article 207 of the Law on Enterprises 2020 sets out four primary scenarios where dissolution applies:

1. The operating period stated in the company charter expires, and the owners do not extend it.
2. The owners decide to dissolve. For private enterprises, this is a decision by the owner. For partnerships, it is the Board of Partners. For limited liability companies, the Members’ Council or the company owner. For joint-stock companies, the General Meeting of Shareholders.
3. The company fails to maintain the minimum number of members or shareholders required by law for six consecutive months and does not convert to an appropriate entity type within that period.
4. Authorities revoke the ERC, or a court orders dissolution.

The Law on Investment 2025, effective March 1, 2026, opens the door to a fifth scenario. Foreign investors can now incorporate the enterprise (ERC) before obtaining an Investment Registration Certificate (IRC), provided market access conditions are met. However, if you fail to obtain the IRC within the specified statutory timeframe (typically 12 months), the law may mandate that your company be dissolved.

Dissolution vs. Dormant: Which is the Right Path?

This is a common misstep among foreign investors. They either dissolve a company they should have kept dormant, or abandon it without following the formal dissolution process. Both are costly. Both paths are governed by the Law on Enterprises 2020 and its implementing regulations under Decree 168/2025/ND-CP. 

Temporary Suspension (Dormant Status)

If you are not ready for a permanent exit, you can place your company in a dormant state by applying for a Temporary Suspension of Business. However, Vietnam does not have a formal “dormant status” like in the Western context. Instead, you can temporarily suspend your business operations, but you still have compliance obligations to fulfil. 

To do this, you need to submit a Business Suspension Notification to the Department of Planning and Investment (DPI). This suspension can be valid for up to one year per notification and can be renewed. Additionally, you must notify the DPI at least three working days before the suspension begins.

This keeps your legal entity alive while cutting most of the administrative overhead. Most tax filing requirements and annual business license fees are suspended alongside your operations. It’s a practical option if you’re navigating a pivot, waiting out market volatility, or actively looking for a buyer.

Before it begins, you must settle all outstanding debts, clear employee salaries, and fulfil social insurance contributions. You also need to maintain your registered head office address for the duration. If you lapse, you risk losing your ERC, which triggers mandatory dissolution.

Formal Dissolution (Winding-Up)

When you decide to terminate the business permanently, you enter the formal dissolution process. This results in the cancellation of both your ERC and IRC and removes the company from the national registry for good. You cannot revive the company after this point.

The process moves in a fixed sequence. Your governing body liquidates the company’s assets, settles all outstanding debts in the legally prescribed order, and clears every labour and social insurance obligation. Only then can you submit the final dissolution dossier to the Business Registration Office (BRO).

The biggest hurdle is the mandatory tax finalisation audit. The Tax Department reviews every unaudited year since incorporation. It is a comprehensive check of your VAT, CIT, and PIT filings. You are essentially proving to the state that every obligation has been met before you are allowed to close. Disorganised records or unresolved liabilities can significantly extend this timeline.

When to Keep a Company Dormant vs Dissolving

Choosing between suspension and full dissolution comes down to your long-term objectives in Vietnam and the financial health of the entity.

Suspension preserves your option to return. Dissolution gives you a clean legal break and ends all obligations. Below are common scenarios that point to one or the other:

Situation	Recommended Action
You plan to resume operations in Vietnam within 12–24 months.	Keep Dormant
You are actively seeking a buyer or M&A partner to take over the entity.	Keep Dormant
You have ongoing contracts, assets, and a strategic presence	Keep Dormant
You cannot maintain a registered head office address during suspension / dormant status.	Mandatory Dissolution
You failed to secure an IRC within the statutory window after ERC issuance under the new Investment Law.	Mandatory Dissolution
You have no plans to operate this specific business model in Vietnam.	Formal Dissolution
Annual compliance and office maintenance costs exceed the cost of a future reincorporation.	Formal Dissolution
You want to permanently settle all complex tax or labour liabilities.	Formal Dissolution

A Practical Rule: Dissolution is usually more cost-effective if you do not plan to use the entity within the next two years. Maintaining a shell company often costs more in compliance than re-incorporating later.

If you are unsure which path fits your financial position and long-term goals, Emerhub can run a full review and map out the right route. Schedule a free consultation to speak with our local advisors and plan a compliant exit.

How to Close a Company in Vietnam: Step-by-Step Process

Dissolving a company in Vietnam means filing in a strict sequence across several government agencies. The process requires close coordination between your finance team and Vietnamese regulators to land a clean legal break.

Emerhub provides end-to-end support throughout. We can act as your legal representative to prepare and file every mandatory document or manage the entire process for you.

Step 1: Pass the Dissolution Resolution

Start with a formal resolution passed by the governing body of your company. The authority depends on your entity type:

• Private Enterprise: the owner.
• Single-member LLC: the company owner or the Members’ Council.
• Multi-member LLC: the Members’ Council.
• Joint-Stock Company (JSC): the General Meeting of Shareholders.
• Partnership: the Board of Partners.

The resolution must spell out the reason for dissolution, the plan for honoring existing labor contracts, and the deadline for settling debts and liquidating contracts. Article 208 of the Law on Enterprises 2020 caps that deadline at six months from the date the resolution is passed.

Within seven working days of passing the resolution, you need to notify the BRO, the tax authorities, and all employees and creditors. From this point on, you cannot hide or disperse assets, sign new contracts unrelated to the dissolution, or raise capital in any form.

Note: Any branches, representative offices, or business locations affiliated with the company must be closed before you submit the dossier. These need to be coordinated separately with the BROs where they are registered.

Step 2: Liquidate Assets and Settle Obligations

Next, liquidate the remaining assets. Your company’s existing governing body must handle this directly. Note that a separate liquidation committee can be appointed only if the company charter specifically provides for one.

Use the proceeds to pay all outstanding debts before distributing anything to shareholders or members. Article 208, Clause 5 sets a strict repayment priority that cannot be skipped or reordered:

1. Employee obligations: Unpaid wages, severance, social insurance, health insurance, unemployment insurance, and any other benefits owed under signed labor contracts and collective agreements.
2. Tax debts: All outstanding obligations owed to the state.
3. All other debts: Trade creditors, loans, and remaining financial obligations.

Step 3: Issue Employee Notices and Clear Labour Clearances

Article 45 of the Labor Code 2019 (Law No. 45/2019/QH14) requires written notice to employees at least 15 working days before terminating their contracts. Every employee must receive their final wages, severance payments, and any outstanding benefits.

Then close the Social Insurance book (chốt sổ bảo hiểm xã hội) for each employee, following the procedure in Decision 595/QD-BHXH by the Vietnam Social Security (VSS). Keep the individual clearance records on file. You will need them when you formally close the company’s VSS account later in the process.

Step 4: Tax Finalisation (Tax Code Deactivation)

With assets liquidated and employee obligations cleared, you enter the “Tax Finalisation” phase. This is the most intensive part of the process, as you must prove all state obligations are satisfied.

1. General Tax Audit: The local Tax Department audits every unaudited year since the company’s inception, covering VAT, CIT, and PIT filings. For companies with no trading history, the audit verifies that the initial charter capital was properly contributed through the Direct Investment Capital Account (DICA).
2. Customs Obligations (If Applicable): If you hold an import-export tax code, you must coordinate with the General Department of Customs during this step. Settle any outstanding duties, fees, or penalties. Upon clearance, you will receive a Confirmation of Fulfillment of Customs Obligations (Xác nhận hoàn thành nghĩa vụ hải quan).

The Tax Department issues a formal Tax Code Deactivation notice (Thông báo đóng mã số thuế) once it validates you’ve settled all liabilities, including customs duties. This officially closes your tax profile.

Step 5: Terminate the Investment Project (FDI Companies Only)

FDI companies holding an IRC must formally terminate the investment project before completing dissolution. Notify the Investment Registration Authority under the provincial Departments of Finance and return the original IRC within 15 days of your termination decision.

You will receive a Decision on Investment Project Termination (Quyết định chấm dứt dự án đầu tư). Banks require this document to process the final liquidation of your DICA.

Step 6: Repatriate Your Funds and Capital

With your tax clearance in hand, you can begin transferring remaining investment capital and liquidation proceeds back to your home country or parent company through the Direct Investment Capital Account (DICA). Keep the DICA open until the final transfer clears. 

Banks will require the finalised dissolution approval from the BRO before processing the remittance. Emerhub can advise on the full procedure, prepare the supporting document package the bank requires, and facilitate the transfer to your parent company.

Step 7: Close Bank Accounts and Return the Company Seal

Following the repatriation, you can formally close every corporate bank account, including dormant ones. The bank will issue a confirmation letter certifying the closure. If your company has never opened a bank account, provide a notarised written commitment confirming no outstanding bank debts.

The corporate seal must also be destroyed or returned. The procedure depends on when it was issued:

• Seals issued by the police before July 1, 2015: Return the seal to the issuing police agency and obtain a Certificate of Seal Destruction (Giấy chứng nhận hủy con dấu).
• Seals made after July 1, 2015: The enterprise handles destruction internally and provides a written commitment confirming it has been destroyed.

Step 8: Close the Company’s Social Insurance Account (SSI) 

This is distinct from the individual employee clearances completed in Step 3. Once all employee social insurance books have been closed and contributions settled, you can now close the company’s institutional social insurance account with the VSS.

The VSS will issue a Confirmation of No Outstanding Social Insurance Debt (Xác nhận không nợ bảo hiểm xã hội) at the company level. This is a crucial component of the final dissolution dossier and cannot be substituted with individual employee records.

Step 9: File the Final Dissolution Dossier

With all obligations settled and clearances in hand, your Legal Representative can submit the final dissolution application to the BRO within five working days. The dossier must include:

• Original dissolution resolution and decision, with meeting minutes.
• Comprehensive asset liquidation report (Báo cáo thanh lý tài sản doanh nghiệp) and a confirmed list of all settled debts, including tax debts and social insurance obligations.
• Confirmation of No Outstanding Social Insurance Debt from the Social Insurance Authority.
• Confirmation of Fulfillment of Customs Obligations from the General Department of Customs (if the company held an import-export tax code).
• Tax Code Deactivation certificate from the Tax Department.
• Evidence of corporate seal destruction or return.
• The original Enterprise Registration Certificate (ERC).
• For FDI companies: Documentation of investment project (IRC) termination. Includes the Decision on Investment Project Termination certificate.

Important: A 180-day clock runs from the date the BRO receives your initial dissolution resolution, not the final dossier. If no creditor or authority objects within that window and your dossier is in order, the BRO updates the company’s status to “dissolved” within five working days of receiving a valid submission.

Common Challenges During Company Dissolution

Most dissolutions that drag past the 12-month mark come down to the same issues. The good news is that most of them are preventable if you get ahead of them early with the right preparations.

• Incomplete accounting records. Missing invoices, unfiled annual returns, or unreconciled accounts stall the tax audit. The Tax Department will not issue a deactivation notice until every gap is closed.
• Unpaid taxes or outstanding penalties. Late payment interest and administrative fines must be fully settled before the tax authority clears your profile. These build up quietly on inactive companies.
• Missing invoices. Gaps in your invoice records are one of the most common triggers for a drawn-out audit. Every issued and received invoice needs to be accounted for before the Tax Department will sign off.
• Unclosed company social insurance account. The VSS institutional confirmation is separate from individual employee clearances. Both are required, and one does not substitute for the other.
• Dormant or unresolved bank accounts. Accounts that were never formally closed, or that carry outstanding balances, prevent the bank from issuing the required closure confirmation.

Choosing Your Exit Strategy: Suspend or Dissolve?

The decision comes down to one question: do you have a concrete reason to keep this entity alive?

Suspension reduces your compliance load but does not eliminate it. You still need to maintain a registered address, keep your tax position current, and renew the suspension each year. If you have no real plan to return, these obligations will keep accumulating. The longer you defer dissolution, the more complicated the finalisation audit becomes.

Keep your company dormant if:

• You may return to operations soon
• You want to preserve the existing structure
• You can manage the ongoing compliance burden

Choose dissolution if: 

• You have no clear future plan for the entity
• You want to stop all obligations entirely
• You need a clean exit

Emerhub handles the full dissolution process on your behalf, from drafting the initial resolution to repatriating your capital through the DICA. If you are still weighing your options, we can review your entity’s position and map out the right path before you commit.

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