The operation of a Representative Office is not always smooth or effective. In certain cases, the Representative Office of a foreign trader operating in Vietnam may be required to terminate its activities. So how are the procedures for dissolution of a representative office of a foreign trader implemented?

I. Guidance on procedures for dissolution of a representative office of a foreign trader

With the increasingly deep economic integration, enterprises often seek to establish representative offices in host countries for the purpose of market research and development, thereby better supporting their business operations. However, some Representative Offices have difficulties in conducting activities, resulting in dissolution. Ngoc Phu Law Company Limited would like to provide several pieces of information related to the procedures for dissolving a foreign Representative Office in the following article. 

Several important points that should not be overlooked when implementing dissolution procedures.

1. Cases of termination of operation of the Foreign Representative Office in Vietnam

Pursuant to Article 35 of Decree No. 07/2016/ND-CP, the Representative Office shall terminate its operation in the following cases:

  • Upon request of the foreign trader;
  • Where the foreign trader terminates its operation in accordance with the laws of the country or territory in which it is established or registered for business;
  • Upon expiration of the operating term stated in the License for Establishment of the Representative Office where the foreign trader does not request an extension;
  • Upon expiration of the operating term stated in the License for Establishment of the Representative Office where the licensing authority does not approve an extension;
  • Where the License for Establishment of the Representative Office is revoked;
  • Where the foreign trader or the Representative Office no longer satisfies one of the conditions stipulated in Articles 7 and 8 of this Decree.

Dossier requirements:

Pursuant to Article 36 of Decree No. 07/2016/ND-CP, the Representative Office shall prepare the following documents:

  • A notice of termination of operation of the Representative Office in accordance with the form prescribed by the Ministry of Industry and Trade, signed by the competent representative of the foreign trader, except in cases where the license is revoked under this Decree;
  • A copy of the document issued by the licensing authority refusing to extend the License for Establishment of the Representative Office (in the case specified in Clause 4 Article 35 of this Decree), or a copy of the decision on revocation of the License for Establishment of the Representative Office issued by the licensing authority (in the case specified in Clause 5 Article 35 of this Decree);
  • A list of creditors and outstanding debts, including tax liabilities and social insurance contribution arrears;
  • A list of employees and their current lawful entitlements;
  • The original License for Establishment of the Representative Office.

2. Procedures for dissolution of the representative office

Foreign traders should observe the following order when implementing procedures for dissolving the foreign Representative Office:

First, the foreign trader submits the dossier for termination of operation of the Representative Office to the licensing authority:

  • The licensing authority is the Department of Industry and Trade or the Management Board of an industrial park, export processing zone, economic zone, or hi-tech park.
  • Within 03 working days from the date of receipt of the dossier, the licensing authority shall examine the dossier and request supplementation if it is incomplete or invalid. The request for supplementation shall be made no more than once throughout the dossier processing period.
  • The licensing authority shall issue an official letter providing instructions on the procedures for dissolution of the foreign Representative Office, clearly stating the documents and materials required to be supplemented.

The foreign trader must fulfill other obligations related to the termination of operation of the Representative Office.

Detailed implementation steps: 

- Step 1:

The foreign trader or the Representative Office must publicly post a notice of termination of operation at the headquarters of the Representative Office.

- Step 2: Submission of the dossier for termination of the tax code

Pursuant to Point b Clause 3 Article 14 of Circular No. 105/2020/TT-BTC, the dossier includes:

  • Application for termination of tax code validity using Form No. 24/DK-TCT promulgated together with this Circular;
  • Decision or notice on termination of operation of the Representative Office;
  • Tax Registration Certificate;
  • Certificate of Registration of Operation of the Representative Office.

The tax authority shall conduct tax finalization for the Representative Office and concurrently finalize personal income tax for the foreign Chief Representative and employees working at the Representative Office.

- Step 3: Return of the seal to the Administrative Management Division for Social Order – Provincial/City Police where the Representative Office is headquartered

Pursuant to Point b Clause 1 Article 18 of Decree No. 99/2016/ND-CP, upon termination of operation, the Representative Office is responsible for returning its seal specimen to the seal registration authority. The dossier includes:

  • An official letter requesting the return of the seal to the police authority, clearly stating the reason for returning the seal;
  • A certified copy of the Certificate of Registration of Operation of the Representative Office;
  • The original Certificate of Seal Specimen Registration previously issued by the police authority;
  • The seal of the Representative Office.

The police authority shall receive the dossier for seal return and issue a Notice of Seal Destruction of the Representative Office within 3–5 working days.

- Step 4: Procedures related to employees

When implementing the dissolution procedures for the foreign Representative Office, the foreign trader must fulfill its obligations toward employees in accordance with the Labor Code 2019 and guiding documents regarding salaries, severance allowances, social insurance, and other regimes, in order to ensure the lawful rights and interests of employees who are required to cease working due to the termination of operation of the foreign Representative Office.

- Step 5: Closure of the Representative Office’s bank account

The foreign trader shall contact the bank where the Representative Office’s account was opened to receive instructions on procedures for closing the bank account.

- Step 6: Supplementation of the dossier in accordance with the licensing authority’s official letter

The supplementary dossier for termination of operation of the Representative Office includes:

  • Certification from the police authority confirming that the Representative Office has completed the seal return procedures;
  • Minutes of liquidation of the lease contract for the premises of the Representative Office;
  • Certification from the tax authority confirming termination of tax code validity of the Representative Office;
  • Documents evidencing payment of social insurance and other statutory entitlements for employees working at the Representative Office.

Within 05 working days from the date of receipt of a complete and valid dossier, the licensing authority is responsible for publishing on its official website the termination of operation of the Representative Office.

Note:

When implementing procedures for dissolution of the foreign Representative Office, it is advisable to complete tax, seal, social insurance obligations for employees, and termination of the office lease in advance, then consolidate all relevant documents and submit them in a single dossier to the licensing authority. It helps minimize time spent on dossier supplementation as requested by the licensing authority.

The above provides information on the procedures for dissolution of the foreign Representative Office in accordance with Vietnamese law. NPLaw specializes in providing comprehensive legal services in a professional manner. With a team of professionally trained lawyers and legal consultants, we are fully capable of advising and supporting clients in implementing the above procedures.