In what cases must the operations of a foreign business entity's representative office be terminated? What is the procedure and the process? Which authority has the jurisdiction to resolve this? In the article below, NPLAW will share with you information on the legal regulations regarding the termination of representative offices of foreign business entities.
In what cases must the operations of a foreign business entity's representative office be terminated? What is the procedure and the process? Which authority has the jurisdiction to resolve this? In the article below, NPLAW will share with you information on the legal regulations regarding the termination of representative offices of foreign business entities.
I. When should the operations of a foreign business entity's representative office be terminated?
Pursuant to Article 35 of Decree 07/2016/ND-CP, which regulates the cases of termination of Representative Office and Branch operations as follows:
- At the proposal of the foreign business entity.
- When a foreign business entity ceases operations according to the laws of the country or territory where the business entity is established or registered to do business.
- Upon expiration of the operation period according to the Representative Office Establishment License, Branch Establishment License, if the foreign business entity does not apply for an extension.
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- The operational period according to the Representative Office Establishment License, Branch Establishment License has expired without the Licensing Authority's consent for extension.
- The Representative Office Establishment License and Branch Establishment License are revoked pursuant to Article 44 of this Decree.
- Foreign business entities, representative offices, and branches no longer meet one of the conditions pursuant to Articles 7 and 8 of this Decree.
II. What does the dossier for terminating the operation of a foreign business entity's representative office include?
Pursuant to Article 36 of Decree 07/2016/ND-CP regulating the dossier for terminating the operation of Representative Offices and Branches as follows:
- 01 dossier, including:
- Notification of the termination of the operation of the Representative Office, Branch according to the form of the Ministry of Industry and Trade signed by the authorized representative of the foreign business entity, except in cases pursuant to Clause 5 and Article 35 of this Decree;
- A copy of the document from the Licensing Authority not extending the Representative Office Establishment License, Branch Establishment License (in the case pursuant to Clause 4, Article 35 of this Decree) or a copy of the Decision to revoke the Representative Office Establishment License, Branch Establishment License from the Licensing Authority (in the case pursuant to Clause 5, Article 35 of this Decree);
- List of creditors and unpaid debts, including tax debts and social insurance contribution debts;
- List of employees and their corresponding current benefits;
- Original Representative Office Establishment License, Branch Establishment License;
- Foreign business entities and the heads of Representative Offices, Branches that terminate operations are jointly responsible for the honesty and accuracy of the termination dossiers of the Representative Offices, Branches;
- In the case where a representative office ceases operations in a province, centrally run city, or geographical area under the management of a management board to relocate its headquarters to another province, centrally run city, or geographical area under the management of another management board, the termination dossier for the representative office only includes the documents pursuant to Point a and Point đ, Clause 1, Article 36 of Decree 07/2016/ND-CP;
III. Obligations related to the termination of the operations of a foreign business entity's representative office
Pursuant to Article 38 of Decree 07/2016/ND-CP, which regulates the obligations related to the termination of the operation of Representative Offices and Branches as follows:
- In addition to carrying out the termination procedures pursuant to Articles 36 and 37 of this Decree, foreign business entities, representative offices, and branches must publicly announce the termination of operations at the headquarters of the representative offices and branches and fulfill other legal obligations when the representative offices and branches cease operations.
- Foreign business entities with representative offices or branches that have ceased operations are responsible for fulfilling contracts, settling debts, including tax debts, and ensuring the legal rights of employees who have worked at the representative offices or branches are fully addressed in accordance with the law.
IV. Answering questions about the termination of the operation of foreign business entities representative offices
4.1. How long does it take to terminate a foreign business entity's representative office?
Clause 2 and 3 of Article 37 of Decree 07/2016/ND-CP regulate the procedures and processes for terminating the operations of Representative Offices and Branches as follows:
- Within 03 working days from the date of receiving the application, the Licensing Authority will review and request additional documents if the dossier is incomplete or invalid. The request for additional documents can be made a maximum of once throughout the process of handling the dossier.
- Within 05 working days from the date of receiving a complete dossier, the Licensing Authority is responsible for announcing on its electronic information page the termination of the Representative Office or Branch's operations.
4.2. The competent authority resolves the termination of the operation of foreign business entities representative offices.
Clause 1, Article 37 of Decree 07/2016/ND-CP regulates the procedures and processes for terminating the operation of Representative Offices and Branches: Foreign business entities submit the dossier for terminating the operation of Representative Offices and Branches directly, by post, or online (if applicable) to the Licensing Authority. Accordingly, the licensing authority is the Department of Industry and Trade of the province or city where the license for the registration of the establishment of representative offices is issued, and the Management Board of industrial zones, export processing zones, economic zones, and high-tech zones (hereinafter collectively referred to as the Management Board) for Representative offices and Branches located in industrial zones, export processing zones, economic zones, and high-tech zones.
V. Should I hire a lawyer to advise on issues related to the termination of the operation of a foreign business entity's representative office?
If you need a legal support unit to advise and guide on legal issues regarding the termination of the operation of foreign business entities' representative offices, please contact us immediately for the best assistance. In addition to advising on legal matters related to our clients' requests, we also directly prepare the documents and represent clients in dealings with government agencies until the final result is obtained.
NPLAW is confident that our team of consultants and lawyers, with many years of experience in legal consulting, will provide you with the best experience when using our services.
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