A representative office (RO) is the first “gateway” for many Chinese companies entering Vietnam — and when leaving the market, it is often the last thing to be closed. It sounds simple (“it’s just an office”), but closing an RO in the wrong sequence can leave the Chinese parent exposed to tax liabilities, labour debts and refusal of future licences. This article sets out the complete RO-closure procedure for a Chinese company leaving Vietnam: a six-step sequence, realistic timing per step, and what must be done before filing for termination.
Why closing an RO is harder than opening one
Opening an RO takes one dossier to the Department of Industry and Trade and a wait for the licence. Closing is the reverse: the law requires the enterprise to “clean up” every obligation — tax, labour, contracts, seals — before termination is granted. Under Decree 07/2016/ND-CP guiding the Commercial Law, a foreign trader’s RO terminates on: licence expiry without renewal, the parent’s termination request, or licence revocation. For a voluntary Chinese exit, the procedure has six interlocking steps, each depending on the last.
Step 1: the parent’s internal decision (1–2 weeks)
The Chinese parent issues a decision to terminate the RO — this document must be consular-legalised and translated/notarised into Vietnamese. It anchors the entire dossier, and many companies lose 2–3 weeks on legalisation in China alone. Tip: run steps 2–4 in parallel while waiting for legalisation.
Step 2: liquidating labour contracts (2–6 weeks)
ROs typically have a chief representative (foreign or Vietnamese) plus staff. Under the Labour Code 45/2019/QH14, termination due to unit closure requires statutory notice (45 days for indefinite-term contracts, 30 days for definite-term), plus severance allowance (half a month’s salary per year of service) or job-loss allowance for unit dissolution, plus pay for unused annual leave. Social insurance books must be finalised for all employees — the social insurance agency only closes books when contributions are paid up to the termination month. Trap: the chief representative is often a dispatched Chinese national — check their work permit and temporary residence card, and process revocation/non-renewal simultaneously, or the RO may be closed while the person remains in unlawful residence.
Step 3: tax finalisation and tax-code deactivation (4–8 weeks — the longest step)
The RO must settle all tax obligations: withheld PIT for staff, foreign contractor tax (if the RO contracted foreign contractors — under Circular 103/2014/TT-BTC), and annual business-licence fees. Then file for tax-code termination with the managing tax authority, which will review past years’ filings — any under-declaration is assessed before the code is closed. This is where most closures stall: many ROs operated 5–10 years with incomplete accounting archives, and the tax authority’s requests for supplements drag on for 2–3 months. Prepare: review the last 3–5 years of filings before applying, and self-amend any errors — voluntary correction is always cheaper than assessed back tax. Where the RO shared accountants or bank signatories with a related Vietnamese subsidiary, reconcile intercompany balances now: tax authorities routinely ask why an RO with “no revenue” moved funds to affiliates, and undocumented transfers are recharacterised as taxable income.
Step 4: liquidating the office lease and other contracts (2–4 weeks)
Terminate the office lease (notice per contract terms, handover, deposit recovery), service contracts (accounting, internet, phones), and collect receivables. Note: ROs may not directly sign profit-generating business contracts — if the RO is found to have acted beyond its function (signing sales contracts, issuing invoices), penalties may precede termination approval.
Step 5: filing termination with the Department of Industry and Trade (5–7 working days)
The dossier includes: the parent’s decision (legalised), the tax authority’s tax-clearance confirmation, the social-insurance clearance, the original RO establishment licence, and the seal (surrendered/cancelled per regulations). The Department issues the licence revocation decision — only then does the RO legally cease.
Step 6: seal cancellation, bank account closure, archiving
Surrender the seal to the police authority (or cancel per current rules), close the RO’s bank account, and archive the full file (decisions, tax/social-insurance clearances, contract liquidations) for at least 10 years per accounting-document retention rules. Realistic total: 2–4 months with good preparation; 6+ months if stuck at tax.
The three costliest mistakes in RO closure
Mistake 1: “just lock the door, nobody will know.” Some Chinese companies dismiss staff, return the office, then… go silent without termination procedures. Consequence: the RO licence stays live on the system, the tax code stays “alive” and keeps generating filing duties (even nil returns) — after a few years, late-filing fines accumulate into large sums, the parent is recorded as a tax debtor, and future licence applications suffer. Mistake 2: closing the RO but keeping people “freelancing”. Former chief representatives/staff keep doing business under the parent’s name with no Vietnamese legal presence — risking permanent establishment characterisation and CIT obligations for the parent. Mistake 3: not revoking work permits. The Chinese national has gone home but the work permit/residence card was never cancelled — re-entering Vietnam later, they may face border trouble over mismatched residence records.
Close vs convert: must you really close?
Before closing, weigh three alternatives: (1) Renew and downsize: for a temporary withdrawal, renew the RO licence and cut headcount — maintaining a “dormant” RO (a real address is required; virtual offices are not permitted, but downsizing to a small site is) costs far less than re-establishing later. (2) Convert to a subsidiary: if the plan is to return with real business operations, convert to an LLC/JSC (with IRC under Investment Law 143/2025) now. (3) Consolidate: groups with multiple ROs in Vietnam can merge into one hub. Rule: RO closure is hard to reverse — reopening starts from zero, taking 1–2 months at non-trivial cost. Decide with a two-year horizon, not a two-quarter one.
Checklist: closing a Chinese company’s RO
Before filing: (1) Parent decision + consular legalisation + notarised translation. (2) Review 3–5 years of tax filings; self-amend errors. (3) Inventory labour contracts, compute severance/job-loss allowances, prepare social-insurance finalisation. (4) Check foreigners’ work permits/residence cards. (5) Review office lease (notice period, deposit). Execution: (6) Notify and liquidate labour contracts with proper notice. (7) Finalise tax; file tax-code termination. (8) Finalise social-insurance books. (9) Liquidate leases and services; collect receivables. (10) File with the Department of Industry and Trade; receive revocation decision. (11) Cancel/surrender seal; close bank account. After closure: (12) Archive 10 years. (13) Notify partners/customers of new contact points. (14) Returning foreign staff need fresh work permits — old files can’t be reused. Timeline: 2–4 months (well prepared) to 6 months (tax-stuck). Budget: labour allowances + tax finalisation (back tax if any) + legal fees — budget before starting; never stall mid-process for lack of tax-payment funds. Final tip: appoint one bilingual coordinator to own the whole closure file — ROs most often stall when the tax consultant, the labour officer and the Hanoi/HCMC filing agent each wait for someone else to move first.
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This article has been quality-reviewed by the FLAW AI Legal Council