FAQ on FDI Dissolution and Project Termination
Below are the questions we receive most often from foreign investors considering exiting the Vietnamese market. Each answer goes straight to the point, with legal bases for you to cross-check.
1. Are investment project termination and company dissolution the same thing?
No. These are two different procedures, though they usually go together. Terminating the investment project is terminating the project tied to the Investment Registration Certificate — IRC (Article 36 of the Investment Law 2025). Dissolving the company is terminating the legal entity tied to the Enterprise Registration Certificate — ERC (Article 207 of the Enterprise Law 2020). An FDI enterprise may terminate one project but continue to exist for another project; conversely, to dissolve the company it must settle all projects and obligations. See also: Terminating an FDI investment project and Dissolving an FDI company in Vietnam.
2. How long does it take to dissolve an FDI company?
The law prescribes specific milestones for each step: 15 working days to send the project termination decision to the investment registration authority (point a, clause 2, Article 66 of Decree 96/2026/ND-CP); 07 working days to send the dissolution resolution to relevant authorities; 05 working days to file the dissolution dossier after paying all debts (clauses 3 and 7, Article 208 of the Enterprise Law 2020). However, actual total time depends mainly on tax finalisation — the tax authority may inspect before confirming tax obligation completion, and this stage has no fixed statutory deadline; the more complex the dossier (non-standard books, tax debts, many branches), the longer. See the detailed factor analysis: Factors affecting FDI company dissolution time and costs.
3. How much does dissolution cost approximately?
There is no fixed figure. Costs include: legal/accounting service fees (depending on dossier scale), taxes and penalties (if any) arising on finalisation, severance allowances for employees, asset liquidation costs. The largest “hidden” item is usually tax reassessment and late-payment interest if prior years were incorrectly filed. So the accurate figure is only available after reviewing outstanding obligations. See also: Factors affecting FDI company dissolution time and costs.
4. Must the investor come to Vietnam in person for the procedures?
Not mandatory. Overseas investors may authorise lawyers or service organisations in Vietnam to carry out the procedures. Practical note: under clause 2, Article 4 of Decree 111/2011/ND-CP (amended by Decree 196/2025/ND-CP dated 04/7/2025), documents prepared abroad must be consular-legalised for recognition and use in Vietnam — except exemption cases in Article 9, covering 4 groups: international treaties, reciprocity principle, Vietnamese law exemptions, and documents whose authenticity Vietnamese competent authorities can verify themselves without requiring legalisation. Powers of attorney also need certified translation for acceptance by Vietnamese authorities — prepare early as this stage takes time.
5. What if the legal representative is a foreigner not permanently residing in Vietnam?
The legal representative still bears responsibility for signing documents during dissolution, even when not present in Vietnam — through valid authorisation. A point to specially note: in some cases, the legal representative may be considered for exit suspension measures. The current legal framework includes clause 5, Article 17 of the Tax Administration Law 2025 and Article 28 of Decree 252/2026/ND-CP — with point b, clause 1, Article 28 covering one case: the legal representative of an enterprise subject to tax administrative decision enforcement, with tax debts of 500 million dong or more overdue by 120 days or more (Article 28 also covers other cases). So tax obligations should be settled before the representative leaves Vietnam long-term. See also: Personal liability of the legal representative on FDI dissolution (an article in the same content cluster).
6. Can a company with tax debts dissolve?
No — at least not a “clean” dissolution. A company may only dissolve when all debts and other asset obligations are paid, and it is not in a dispute resolution process at Court or Arbitration (clause 2, Article 207 of the Enterprise Law 2020). Tax debts must be fully paid during tax finalisation, before the tax authority confirms tax obligation completion. Deliberately “dodging” by abandoning the company leads to the risks in question 13 below.
7. When and how is the tax code deactivated?
Tax code deactivation is part of tax registration, performed when the company dissolves (clause 1, Article 10 of the Tax Administration Law 2025). Procedures currently run under the interlinked mechanism: the enterprise files the dissolution dossier at the business registration authority, and information is transferred to the tax authority for tax code deactivation procedures (Article 13 of Circular 90/2026/TT-BTC). After tax obligations are completed, the tax authority issues a notice for the enterprise to continue filing the official dissolution dossier. Note: the tax code may not be used in economic transactions from the date the tax authority notifies deactivation. See also: Deactivating the tax code on FDI company dissolution.
8. Can the company be sold or the project transferred instead of dissolving?
Yes, and in many cases this is better than dissolution: the investor recovers some capital instead of only asset liquidation proceeds, while the transferee inherits an operating project. Investment project transfer follows clause 1, Article 34 of the Investment Law 2025 (investors transferring part or all of the investment project to another investor), while capital transfer in an FDI enterprise is paid through the foreign investment capital account in Vietnam (clause 3, Article 3 of Circular 38/2026/TT-NHNN) under foreign exchange management regulations. See the full option comparison: FDI exit: bankruptcy, dissolution or transfer?
9. What is the maximum business suspension period?
Each business suspension notice may not exceed 12 months. To continue suspending after expiry, a new notice dossier must be sent to the business registration authority, no later than 03 working days before the continued suspension date (clause 1, Article 60 of Decree 168/2025/ND-CP; clause 1, Article 206 of the Enterprise Law 2020). Note the new regulation: from 23/7/2026, Decree 296/2026/ND-CP (amending clause 1, Article 60 of Decree 168/2025/ND-CP) provides that total consecutive business suspension may not exceed 24 months — indefinite extension is impossible. Suspension suits temporary difficulties recoverable within this limit; if the allowed time passes without recovery, consider full termination instead of prolonged “suspension”. See also: Suspending or fully terminating an FDI project.
10. What benefits do employees get when the company dissolves?
When the enterprise ceases operations, labour contracts terminate under clause 7, Article 34 of the Labour Code 2019. Employees regularly working for 12 months or more receive severance allowance (Article 46). Within 14 working days of contract termination, the two parties must fully pay amounts related to each party’s rights; where the enterprise ceases operations, this deadline may extend but not beyond 30 days (clause 1, Article 48). Employers must also finalise social insurance books, confirm unemployment insurance contribution periods and return documents held from employees (clause 3, Article 48). For employee handling details on project termination see: Handling labour on FDI project termination.
11. How are foreign workers’ work permits handled when the company dissolves?
Work permits expire when the labour contract terminates or when the employer of foreign workers ceases operations (clauses 2 and 7, Article 156 of the Labour Code 2019), and are subject to revocation. Under Articles 30–31 of Decree 219/2025/ND-CP, within 15 days of work permit expiry, the employer revokes the permit for submission to the issuing authority with a report, and where revocation is impossible must state the reason. In practice, foreign workers also need to handle their temporary residence cards and residence status simultaneously. Make a list of all foreign workers early and handle in parallel with labour contract termination procedures. Details see: Handling labour on FDI project termination.
12. How is remaining investment capital remitted abroad?
On concluding, liquidating, or terminating the investment project, foreign investors must transfer capital abroad through the foreign investment capital account in Vietnam (clause 3, Article 3 of Circular 38/2026/TT-NHNN, effective 18/8/2026, replacing Circular 06/2019/TT-NHNN — the old name “direct investment capital account”/DICA is no longer used). When the company dissolves and must close the capital account, transferring remaining capital and other lawful proceeds abroad follows the account opening/closing/usage regulations in Circular 38/2026/TT-NHNN — check the text directly (or discuss with the permitted bank holding the account) before proceeding. The prerequisite in all cases: completed tax obligations — the permitted bank will check tax documents before transferring funds. For capital account and foreign exchange management details see: Remitting FDI capital abroad: capital accounts, foreign exchange.
13. What happens if an inactive company is just left alone without any procedures?
This is the riskiest choice. On the investment project side: if the project has ceased operations and after 12 months the investment registration authority cannot contact the investor or legal representative, the project will be terminated (Article 36 of the Investment Law 2025) — passively, losing proactive liquidation rights. On the enterprise side: tax debts still accrue late-payment interest, the legal representative remains tied to liability, and the company may receive a tax authority notice of inactivity at the registered address. “Leaving it” does not make obligations disappear — it only makes later handling more expensive.
14. After dissolution is complete, does the legal representative retain any liability?
In principle, when the company has dissolved properly and paid all obligations, liability tied to the management role ends. However, the law provides that related managers are jointly liable for the company’s debts in cases of dissolution due to revocation of the Enterprise Registration Certificate (point d, clause 1 and clause 2, Article 207 of the Enterprise Law 2020). Additionally, post-dissolution tax inspections — if any — follow tax administration law, and the law provides 05-year liability for the truthfulness and accuracy of dissolution dossiers — this liability only triggers when dissolution dossiers are inaccurate or forged (clause 3, Article 210 of the Enterprise Law 2020). So, dissolving lawfully with obligations fully settled from the start is the best way to protect the representative.
Haven’t found the answer for your case?
Each FDI enterprise has different capital structures, tax and labour obligations — the general answers above do not replace reviewing your specific dossier. See the 12-step FDI project termination checklist for self-assessing progress, or discuss directly with us:
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The content on this page is for reference only and does not replace legal advice for your specific case.