Personal Liability of the Legal Representative When Dissolving an FDI Company

He is the Korean general director of a manufacturer in Binh Duong. The company lost money three years in a row, and the Members’ Council decided to close. He asked his lawyer a very direct question: “After I sign the dissolution papers, can I go home? Do the company’s tax debts attach to me?”

This is the question we hear most from legal representatives who are foreigners. This article answers exactly that: when dissolving an FDI company, which liabilities stop at the company, which “attach” to him personally — and what he must do before his flight.

The foundational principle: the company bears debts, not you

The company is an independent legal entity. Tax debts, supplier debts, employee wage debts — all are the company’s obligations, paid from the company’s assets. The legal representative is the individual representing the company in exercising rights and obligations arising from the company’s transactions (clause 1, Article 12 of the Enterprise Law 2020). He signs contracts, signs tax returns, signs dissolution dossiers — but signs on behalf of the company, not in his personal name.

In other words: the company owing 2 billion VND in tax does not mean he must take 2 billion VND from his personal account to pay. The law does not require him to do that.

But this principle has exceptions. And on dissolution, those exceptions appear more often than when the company was operating normally. Below are 5 “touchpoints” where liability may attach to him personally.

1. Signing untruthful dissolution dossiers: personal liability

The Enterprise Law 2020 imposes three mandatory requirements on legal representatives: exercising assigned rights and obligations honestly and carefully, in the best interests of the enterprise; being loyal to the enterprise’s interests, not abusing position for self-benefit; and fully disclosing conflicts of interest. Violators bear personal liability for damage caused to the enterprise (Article 13; clause 2, Article 13 as amended by clause 4, Article 1 of Law No. 76/2025/QH15, effective 01/7/2025).

On dissolution, this requirement is “heavier” than normal because he signs the entire dossier: the liquidation report, the creditor list, the debt handling plan, commitments of full obligation payment. Article 210 of the Enterprise Law 2020 provides that enterprise managers and legal representatives are responsible for the truthfulness and accuracy of the dissolution dossier. If the dossier contains fraudulent or forged content, these persons bear joint liability for the enterprise’s unpaid debts.

Common in practice: the accountant hands over “cleaned-up” figures while supplier debts are actually still off the books; or assets already liquidated but not fully recorded. He signs without checking — that signature is his, and so is the liability. The safety rule: only sign when figures have been reconciled with accounting books and confirmed by the finance lead; every “fully paid” commitment must be accompanied by vouchers.

2. Exit suspension due to the company’s tax debts

This is the risk that “wrecks plans” most: the plane ticket booked, only at the airport learning he cannot leave the country.

The current mechanism is as follows. Under point b, clause 1, Article 28 of Decree 252/2026/ND-CP (the decree guiding the Law on Tax Administration 2025, effective 01/7/2026), the legal representative and beneficial owner of an enterprise under enforcement of an administrative tax decision, with tax debts of 500 million VND or more overdue 120 days or more, are subject to exit suspension consideration. The same provision also applies where the enterprise is recorded as not operating at the registered address for over 120 days without restoring or deactivating the tax code.

The authority issuing the notice is the tax authority directly managing the enterprise (clause 2, Article 28). When the enterprise completes tax payment obligations, the tax authority issues a notice cancelling the exit suspension (clause 5, Article 28).

For foreign legal representatives, there is another layer of rules. Point c, clause 1, Article 28 of the 2014 Law on Foreigners’ Entry, Exit, Transit and Residence in Vietnam provides that foreigners with incomplete tax payment obligations may face exit suspension. The suspension lasts no more than 03 years and may be extended (clause 3, Article 28). The decision-maker in this case is the head of the tax authority (clause 2, Article 29).

Important note: he is not suspended just because he is “the director”. The trigger always attaches to the enterprise’s specific tax debt situation — debts reaching the threshold, overdue long enough, the enterprise under enforcement. So the task is not to worry, but to know the company’s tax status for certain before booking the ticket: ask the tax authority to confirm in writing the tax completion status, or at least a tax debt reconciliation up to the present.

3. Leaving without authorisation: liability does not “follow” him to the airport

The Enterprise Law 2020 mandates: the enterprise must always have at least one legal representative residing in Vietnam. When only one such person remains and that person exits, he must authorise in writing another individual residing in Vietnam to exercise the representative’s rights and obligations. And the key point: the authoriser remains responsible for the exercise of the authorised rights and obligations (clause 3, Article 12).

Many misunderstand this. They think: “I authorised Mr. A to stay and handle things; from now on everything is Mr. A’s.” It is not. The law clearly states responsibility remains with him for the authorised matters. Proper authorisation keeps the company out of the “no representative” state — but it is not a way for him to wash his hands.

Practical consequence: if he goes home while dissolution procedures are still unfinished, every document from the tax authority or the business registration authority — he remains the ultimately responsible person legally. The right solution is not “authorise and forget”, but authorising a competent person, tracking progress periodically, and only considering it done when holding the completion confirmation from each authority.

4. Criminal liability: not automatic just because he holds the title

This needs saying clearly because many worry excessively: holding the legal representative title does not automatically make him a suspect when the company has violations. Criminal liability only arises with three elements: a specific violating act committed or directed by him, the fault element, and the act constituting a crime prescribed by the Penal Code.

A commonly cited example is tax evasion (Article 200 of the 2015 Penal Code, amended 2017): applying where specific fraudulent acts exist such as keeping two books, issuing fictitious invoices, concealing revenue — with a quantitative threshold of 100 million VND of evaded tax and a maximum penalty of 7 years’ imprisonment. A company genuinely losing money, paying tax to its ability, dissolving in proper sequence has no “act” constituting a crime.

Conversely, directing the accountant to “beautify” figures to fool the tax authority during dissolution finalisation, or dissipating company assets before paying debts — those are his personal acts, and he answers for those very acts. The boundary is clear: the company owing tax is the company’s matter; him cheating to evade that obligation is his matter.

5. Personal guarantees: the paper many forget they signed

A final touchpoint, little noticed: when the company borrows from banks or signs major contracts, banks and counterparties sometimes require the representative himself to sign a personal guarantee for the company’s obligations. If he ever signed such a document — even years ago, even thinking at signing it was “just a formality” — then when the company cannot pay, creditors may claim directly against his personal assets under that guarantee.

Before dissolution, dig through all the company’s credit dossiers and major contracts, checking whether he (or anyone in management) ever signed a guarantee, a substitute repayment commitment, or a support letter with personally binding content. This is simple review work that many skip until creditors knock.

Checklist: 7 things to finish before he leaves Vietnam

1. Close the tax status in writing. Ask the tax authority to confirm the tax completion status, or a tax debt reconciliation up to the present. Do not rely on the accountant’s verbal word.
2. Check exit suspension risk. Compare tax debts against the 500 million VND threshold and the 120-day overdue period (Article 28 of Decree 252/2026/ND-CP). If the company is under enforcement, settle it before booking the ticket.
3. Authorise in writing a person residing in Vietnam if he exits while dissolution procedures are unfinished (clause 3, Article 12 of the Enterprise Law 2020) — and track progress periodically, because responsibility remains with him.
4. Only sign dissolution dossiers when figures are verified. Every “fully paid” commitment must have reconciling vouchers; do not sign an accountant’s draft unread.
5. Handover and recover legal instruments: the seal, digital signature, bank accounts, tax filing system access. In practice there have been cases of bad actors using a “hanging” company’s digital signature to issue fictitious invoices — this risk needs proactive prevention, not dismissal.
6. Review personal guarantees in credit dossiers and major contracts signed on behalf of the company.
7. Keep complete dossiers of dissolution, tax finalisation, debt payment vouchers — both hard and soft copies, somewhere accessible even after going home.

When he definitely needs a lawyer

• The company has large tax debts, is under enforcement, or he has received notices related to exit suspension.
• There are disputes with other shareholders/members over the dissolution plan, asset valuation, or division of the remainder.
• He once signed a personal guarantee or is unsure whether he ever did.
• The company shows signs of tax or invoice investigation, or faces complaints from employees or partners.

Dissolving an FDI company is a multi-step process, in which the legal representative’s responsibility does not end at the last signature — it ends when all obligations are handled with state authorities’ written confirmation. Learn the full FDI company dissolution process, the investment project termination process, and the risks of abandoning an inactive company. The full 12-step checklist here.

Are you the legal representative preparing to dissolve the company? Do not let an unchecked signature or an unclear tax debt become your personal problem years later. FLAT LAW FIRM comprehensively reviews the representative’s responsibilities before dissolution: tax status, legal dossiers, personal guarantees, and the authorisation plan when he leaves Vietnam.

Fill in the short form below — 0988424851 — 0988424851 — 0988424851. First 30-minute consultation FREE — FLAT responds within 4 working hours.