Dissolving a foreign-invested LLC is easily described as ‘an administrative procedure’. In reality it is a 12-step process with overlapping dependencies across five authorities – and a skipped step does not explode immediately; it explodes at step eleven, when the dossier is returned and the entire schedule slides with it.
This article presents the 12-step dissolution process for a foreign-invested LLC under the 2020 Enterprise Law and the 2025 Investment Law: what each step requires and which authority receives its filings; whether the step order is mandatory; and the concrete consequences of skipping each step group.
Applicable Legal Framework
The process’s spine is Article 208 of the 2020 Enterprise Law (No. 59/2020/QH14) on dissolution sequence and procedures, set on the background condition of Article 207(2) (all debts paid, no dispute at a Court or Arbitration) and Article 209 (cases of Enterprise Registration Certificate revocation). For a foreign-invested company, three procedure layers are nested into that spine: investment project termination under Article 36 of the 2025 Investment Law (No. 143/2025/QH15) at the investment registration authority; tax finalization and tax code deactivation under Tax Administration Law 108/2025/QH15 (replacing Law 38/2019) at the tax authority – where the tax obligation fulfillment confirmation is a mandatory component of the dissolution dossier; and labor handling and social insurance closure under the 2019 Labor Code, plus customs liquidation where duty-free goods/machinery exist under Decree 134/2016/ND-CP.
Two statutory deadlines anchor the whole process: the dissolution resolution is sent to the business registration authority, the tax authority, and employees, and published on the National Portal within 07 working days of adoption; and contract liquidation and debt payment must not exceed 06 months from adoption. A third mark sits at the process’s end: the business registration authority updates the ‘dissolved’ legal status within 05 working days of receiving the full dossier. The twelve steps below are the professional standardized form of those provisions for a single/multi-member foreign-invested LLC.
Detailed Answers to Practical Questions
What are the steps to dissolve a foreign-invested LLC?
STEP 1 – Adopt the dissolution resolution: the Members’ Council (or the owner) adopts the dissolution resolution at the voting threshold per the 2020 Enterprise Law and the charter for dissolution decisions; the resolution states the dissolution reason, the liquidation period (not over 06 months), the plan for handling labor contract obligations, the signing representative, and the person/organization assigned to liquidate. STEP 2 – Notification and publication: within 07 working days, send the dissolution resolution with the debt settlement plan to the business registration authority, the tax authority, and employees, and also to creditors and persons with related rights and interests; the business registration authority publishes it on the National Business Registration Portal. STEP 3 – Terminate the investment project: perform project termination procedures at the investment registration authority under Article 36 of the 2025 Investment Law, handle the project performance security deposit (if any) and the project’s sub-licenses. STEP 4 – Liquidate assets and contracts: inventory assets at the resolution date; sell/liquidate fixed assets, handle inventory, terminate performing contracts, collect receivables; pay debts in the exact order of Article 208(3): (1) salaries, severance allowances, social, health, and unemployment insurance and other employee entitlements; (2) tax debts; (3) other debts. STEP 5 – Handle labor and insurance: terminate labor contracts on proper grounds with allowances under the 2019 Labor Code (severance allowance Article 46 or job-loss allowance Article 47 as applicable; the Article 44 labor usage plan and 30-day advance notice where many employees are laid off due to dissolution), fully pay salaries and amounts owed to employees, close the books and obtain social insurance obligation completion confirmation, and recover foreigners’ work permits. STEP 6 – Close customs (if any): liquidate duty-free imported goods, machinery, and equipment under Decree 134/2016/ND-CP – re-export, change of use with duty payment on residual value, or supervised destruction.
What must each step do, and which authority receives the filings? (continued)
STEP 7 – Tax finalization: file the final-period corporate income tax finalization with returns up to the current period, finalize personal income tax for employees, handle unused e-invoices; the directly managing tax authority inspects finalization at the enterprise upon tax code deactivation; the enterprise pays arrears and arising amounts (if any) to obtain the obligation fulfillment confirmation. STEP 8 – Tax code deactivation: after tax obligations are completed (and after dependent units have deactivated their tax codes beforehand), the tax authority issues the tax code deactivation notice; this is a mandatory document in the step-11 dissolution dossier. STEP 9 – Divide residual assets: after all debts are paid in the step-4 order and tax obligations completed, residual assets are divided among members by capital contribution ratio under Article 208; the foreign investor remits its share abroad through the investment capital account with the dissolution document set. STEP 10 – Close accounts and ancillary registrations: close the investment capital account and payment accounts at the bank after money transfers complete, return the seal/have the enterprise self-manage the seal per current rules, close remaining public service accounts. STEP 11 – File the dissolution dossier: file the dissolution dossier set at the business registration authority where the enterprise is headquartered – core components include the dissolution notice, the dissolution resolution, the asset liquidation plan/report and the list of paid creditors, and the tax authority’s confirmation of tax obligation fulfillment (with the customs authority’s confirmation of customs obligations in statutory cases). STEP 12 – Status update and archiving: the business registration authority updates the ‘dissolved’ status on the National Database within 05 working days; the enterprise arranges archiving of all accounting, tax, and labor dossiers per statutory periods and hands the core dossier set to the parent company – the archiving duty survives the legal person’s final day.
Is the dissolution step order mandatory?
Yes – at the junctions, and not entirely – along the parallel corridors. Three sequence relations are legally mandatory. Sequence one: the dissolution resolution (step 1) must precede every other step, because it is the legal basis of the whole process – notification (step 2) runs on the 07-working-day clock from the resolution’s adoption date, and the authority to liquidate assets in the dissolution’s name arises from this resolution. Sequence two: debt payment must follow the Article 208(3) priority order (labor, tax, other debts), and dividing residual assets to members (step 9) may occur only AFTER debts are fully paid – dividing assets before debts are settled is the act for which managers and members bear joint liability when creditors are harmed. Sequence three: the tax obligation fulfillment confirmation and tax code deactivation (steps 7-8) must exist before filing the dissolution dossier (step 11), because they are mandatory components of that dossier – the business registration authority will not update the dissolved status without them. Conversely, the middle steps can and should run in parallel to shorten total time: project termination (step 3), asset/contract liquidation (step 4), labor-insurance (step 5), and customs (step 6) proceed simultaneously, and tax finalization (step 7) usually begins preparation while liquidation is still under way. In other words: order is mandatory at the gates, free along the corridors – breaching a gate gets the dossier returned; not using the parallel corridors makes the process needlessly long.
What are the consequences of skipping a step?
The consequences of skipping follow the skipped step. Skipping step 2 (notification/publication): unnotified creditors and interested persons have grounds to complain about payment; the dissolution information not being published deprives the process of the publicity the law requires, and the enterprise may be administratively sanctioned for enterprise registration procedure violations. Skipping step 3 (project termination): the project still exists in the investment file after the enterprise has dissolved – the investment registration authority continues monitoring the project’s reporting duties and the investor leaves an open file that can be handled later, while the project performance security deposit (if any) hangs indefinitely. Skipping the payment order at step 4 or dividing assets early at step 9: creditors paid late or unpaid may claim joint liability from the enterprise’s managers and the members who received assets; this is the heaviest personal financial consequence group in the whole process. Skipping step 5 (labor/insurance): unclosed social insurance debts block the tax steps 7-8 (the obligation confirmation cannot be complete), unpaid allowances are the number-one priority debt returning to demand at every stage, and arising labor disputes block the dissolution’s ‘no dispute’ condition. Skipping step 6 (customs): unliquidated duty-free goods are assessed import duty on residual value by customs with penalties, and a missing customs confirmation (where mandatory) leaves the dissolution dossier incomplete. Skipping steps 7-8 (tax): the simplest and most absolute consequence – no dissolution dossier, the enterprise is stuck forever in ‘undergoing dissolution procedures’ status, the legal representative remains bound by the obligations of an un-dead legal person, including exit-suspension risk in enforced tax debt cases. Skipping step 12 (archiving): when the tax authority or a partner needs to trace dossiers after dissolution and they no longer exist, the explanation responsibility belongs to those who managed the enterprise – archiving is the cheapest and most underrated step of the whole process.
Action Checklist
- Print the 12-step process as a one-page checklist, marking the 3 mandatory-order gates: resolution before notification; Article 208 payment order before asset division; tax confirmation before dissolution dossier
- The dissolution resolution must carry full Article 208 content: reason, liquidation period not over 06 months, labor plan, signatory and liquidator
- The 07-working-day notification clock runs from the resolution adoption date – send simultaneously to the registration authority, tax authority, employees, creditors
- Run steps 3-6 in parallel (investment, assets, labor, customs) and prepare step 7 during liquidation
- Never divide residual assets (step 9) before priority-order debts are fully paid and tax is confirmed
- Deactivate dependent units’ tax codes before the main enterprise’s tax code
- After the dissolved-status update: arrange archiving of accounting – tax – labor dossiers per statutory periods and hand over to the parent company
Frequently Asked Questions
Does a single-member foreign-invested LLC dissolve differently from this 12-step process?
The 12-step frame applies identically; the difference sits at step 1: the dissolution decision is issued by the company owner (instead of the Members’ Council), and no internal transfer/offer step arises in dissolution. Additionally, at step 9, all residual assets belong to the sole owner after debts are fully paid – but the joint liability of managers and the owner when assets are divided before debts are settled applies in full. The investment, tax, customs, and labor steps are entirely the same as in the multi-member case, because they attach to the project and the enterprise’s operations, not to the ownership structure.
Which of the 12 steps can the enterprise fully authorize a service provider to perform?
Most dossier and authority-facing steps (notification, project termination, tax dossiers, the dissolution dossier) can be performed through an authorized representative – a law firm or service provider – with a valid power of attorney. But three work groups cannot transfer their essential responsibility: adopting the dissolution resolution is the owner/Members’ Council’s competence; approving the liquidation plan and asset division sits at ownership level; and financial liability for wrong-order payment or early asset division remains with the managers and members by law, whoever performed the execution. In other words: operations can be authorized, responsibility cannot.
At step 7 the tax authority issues a large arrears decision – does the process stop?
The process does not ‘stop’ in the sense of being cancelled, but the steps after step 7 lock until the tax obligation is determined and handled: the enterprise pays the arrears (and may simultaneously complain against the decision if it disagrees – a complaint does not itself suspend the enforcement duty except where deferred as prescribed), then obtains the obligation fulfillment confirmation to proceed to steps 8 and 11. Meanwhile, other parallel steps (asset liquidation, labor) continue, and the dissolution resolution and issued notifications remain in effect. This is why step 7 is recommended for very early preparation via internal tax review: a surprise arrears amount at the process’s end adds many months to a schedule that seemed nearly finished.
This article has been quality-reviewed by the FLAW AI Legal Council