FDI Exit: Bankruptcy, Dissolution or Transfer?

The project is no longer viable. The investor wants to leave Vietnam. The first question is not “how”, but “which path”.

Choose right, and everything proceeds in sequence: liquidation, finalisation, dossier closure, capital repatriation. Choose wrong, and the investor may be stuck for years at tax finalisation, the legal representative may face exit suspension if the company has tax debts above the threshold, or worse — thinking the exit is done while the company still hangs on the system with full obligations.

The four paths below are the four main legal options for foreign investors wanting to divest. Each has its own conditions, and not every path is open in every case.

Comparison matrix of the 4 options

A few points to read carefully in the table above:

• Dissolution and project termination are two different things but must be done in parallel. An FDI company is usually also the subject of an investment project with an Investment Registration Certificate (IRC). Dissolving the enterprise under the Enterprise Law 2020 is not enough — the investment project operation must also be terminated under Article 36 of the Investment Law 2025, the project self-liquidated, and the IRC surrendered/for the investment registration authority to recover. Missing either one leaves the dossier hanging.
• No debt clearance, no dissolution. Article 207 of the Enterprise Law 2020 clearly prescribes the condition: ensuring full payment of all debts and other asset obligations, and not being in dispute resolution at Court or Arbitration. Debts here include tax debts — and the payment order on dissolution prioritises employees first, tax debts second, then other debts (Article 208).
• Bankruptcy is not a way to “escape debt”. It is a judicial procedure: the Court accepts the case, the Asset Manager controls assets, all major transactions are supervised. In return, it is the only lawful path to end an enterprise that has lost solvency with no ability to pay.
• Suspension does not erase obligations. During suspension, the enterprise still exists. Tax obligations, reporting, obligations to employees and creditors — most remain (note: the business licence tax was abolished from 01/01/2026, no longer arising). Suspension only buys time, not peace of mind.

5 self-assessment questions

Answer the 5 questions below honestly. Your answers will show which group you belong to.

Question 1. Does the company still have debts — including tax debts, social insurance debts, supplier debts, bank debts?

• If no debts remain (or enough money to pay all): the dissolution door is open. This is the cleanest path.
• If debts remain but are payable: pay them off before dissolving, or negotiate debt rescheduling first.
• If debts remain and are unpayable: dissolution cannot be done — consider bankruptcy.

Question 2. Does the company still have valuable assets — factories, machinery, land use rights, the IRC, sub-licences, brands, ongoing contracts?

• If yes: do not rush to liquidate cheaply. An FDI project still holding an IRC, land and licences can sell for far more than scrap value. Consider transfer.
• If nothing of value remains: dissolution or bankruptcy depending on the debt situation.

Question 3. Do you want to exit fast, or exit “clean” legally?

• Fast exit (accepting advisory fees): transfer is the shortest path if a buyer is found.
• Clean exit (no loose ends afterwards): full dissolution — slower but conclusive.

Question 4. Does the project have factors making transfer difficult — state-leased land, conditional business lines, ongoing disputes?

• Transferring an investment project must meet the conditions in Article 34 of the Investment Law 2025: the project is not subject to operation termination, the transferee meets market access and land conditions. Annually-paid leased land and projects in dispute — both are heavy negatives on valuation.

Question 5. Does the legal representative need to leave the country soon? Does the company have tax debts?

• If there are unresolved tax debts: the legal representative — especially a foreigner — may face exit suspension under clause 5, Article 17 of the Law on Tax Administration 2025 and point b, clause 1, Article 28 of Decree 252/2026/ND-CP (enterprise under tax enforcement, debts of 500 million VND or more, overdue 120 days or more). This is a personal risk not to be taken lightly. Handle tax obligations before the representative leaves Vietnam.

Suggested options by situation group

Based on your answers, see which group you belong to:

Group 1 — Large debts, no solvency. The suitable direction is bankruptcy. Note for the legal representative: when the enterprise loses solvency, the law imposes an obligation to file the petition (Article 38 of the Law on Rehabilitation and Bankruptcy 2025), not a choice. If your enterprise is small or micro, or has no more than 20 unsecured creditors with total principal debts not exceeding 10 billion VND, or no remaining assets — the simplified bankruptcy procedure (Article 70) may apply, significantly faster than the ordinary procedure.

Group 2 — Debt-free (or able to pay all), wanting to exit entirely. The suitable direction is enterprise dissolution + investment project termination. Work both tracks in parallel: the enterprise track (Articles 207, 208 of the Enterprise Law 2020) and the project track (Article 36 of the Investment Law 2025). Do not forget tax finalisation, social insurance closure, labour contract liquidation, and tax code deactivation (the Law on Tax Administration 2025; Decree 252/2026/ND-CP; Article 13 of Circular 90/2026/TT-BTC).

Group 3 — Still holding valuable assets, IRC, land or licences. The suitable direction is transfer: selling the whole company (capital transfer) or the investment project (Article 34 of the Investment Law 2025). This is the only option that can bring money back instead of only costing money. But thorough legal due diligence is needed before offering for sale — professional buyers will probe every crack: hidden tax debts, land disputes, transfer conditions.

Group 4 — Uncertain, wanting to keep the door open. The suitable direction is suspension: notifying business suspension (each up to 12 months, total consecutive suspension not exceeding 24 months — Article 60 of Decree 168/2025/ND-CP as amended by clause 1, Article 11 of Decree 296/2026/ND-CP) and/or suspending the investment project operation (Article 35 of the Investment Law 2025). Suitable when the difficulty is assessed as temporary. Not suitable when the company is drowning in debt — suspension does not make debts disappear.

Group 5 — Moderate debts, still negotiable with creditors. Out-of-court debt restructuring may come first: negotiating deferral or reduction with each creditor, selling non-core assets to pay debts, then dissolving cleanly. This path is not in the table because it is not a standalone legal procedure — but in practice, many FDI enterprises have exited smoothly this way before needing bankruptcy.

Important note: The above is only general reference to help investors with initial orientation. Each enterprise has different debt structures, assets and legal dossiers — the final decision should be based on a specific dossier review and lawyer advice. This content does not replace legal advice for your specific case.

Deep dive into each option

Each option in this content cluster has its own page with detailed analysis — step-by-step procedures, dossiers to prepare, costs and practical risks:

• Dissolving an FDI company: process, dossier and practical timeline — the enterprise track: dissolution resolution, asset liquidation, debt payment order, tax code deactivation.
• Terminating an FDI investment project: procedures with the investment registration authority — the project track: termination decision, project self-liquidation, IRC handling, land use rights and land-attached assets.
• Project transfer, selling an FDI company (exit M&A) — valuation, legal due diligence, transfer conditions, IRC transfer procedures and capital purchase registration.
• FDI company bankruptcy: when it is the right path — loss-of-solvency conditions, simplified procedure, rights and obligations of the legal representative.
• Suspending or fully terminating an FDI project? — detailed comparison of the two “freezing” and “killing” options, remaining obligations during suspension.
• All-inclusive FDI dissolution and project termination service package — FLAT does it all: from dossier review, tax finalisation, to IRC closure and capital repatriation.

Specialised issues often arising on exit:

• Deactivating the tax code when dissolving an FDI company · Tax finalisation on dissolution and project termination · Contractor tax on FDI exit · Repatriating FDI capital: investment capital accounts and foreign exchange · Handling labour on project termination · Social, health and unemployment insurance on FDI project termination · Land and factories on project termination · Land and asset recovery on FDI project termination · Distinguishing the 2 tax code closure flows: interlinked and direct · Personal liability of the legal representative · Abandoning an inactive FDI company: risks

Answering common questions: FDI dissolution and project termination Q&A.

Before deciding, you should go through the 12-step FDI project termination checklist — a fully open checklist helping you self-review what your dossier is missing and which situation group you belong to.

Book an FDI exit consultation

Each exit dossier is its own problem: different debt structures, different assets, different IRCs and land. A first free 30-minute talk with a lawyer usually helps the investor identify the right path from the start — instead of going wrong and turning back, costing double the time and money.

Leave your information — FLAT will respond within 4 working hours:

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• Need: [ ] Dissolution · [ ] Project termination · [ ] Transfer/selling the company · [ ] Bankruptcy · [ ] Undecided — need advice on choosing the option

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