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When Can a Commercial Legal Entity Be Suspended from Operations in Vietnam?

4 min read
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Short answer

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Illustration: Courthouse with majestic columns

Fixed-term suspension of operations is a principal punishment for offending commercial legal entities (Article 33(1)(b) of the Penal Code). Under Article 78(1), it applies when two conditions are met simultaneously:

  1. The entity committed an offence causing harm to human life, health, the environment, or national security, public order and social safety;
  2. The consequences can actually be remedied.

The suspension lasts 06 months to 03 years (Article 78(2)) and covers one or several sectors where the entity committed the offence — it is not a shutdown of the entire company.

Not every corporate offence carries a suspension option

Meeting room with flipchart — commercial disputes involving FDI
Illustration: meeting room with flipchart — commercial disputes involving FDI

Fixed-term suspension is not automatic for every corporate offence under Article 76 — it applies only where the specific offence provision provides it (usually in the aggravated brackets):

  • Article 300(4)(a) (terrorism financing): fine of VND 7–15 billion or fixed-term suspension of 06 months–03 years;
  • Article 324(6)(c) (money laundering): fine of VND 10–20 billion or fixed-term suspension of 01–03 years;
  • Article 194(6)(d) (after Law 86/2025): fine of VND 30–40 billion or fixed-term suspension of 01–03 years.

Fixed-term vs permanent suspension (Article 79)

The boundary between fixed-term (Article 78) and permanent suspension (Article 79) turns on the practical possibility of remedying the consequences and the severity of the harm:

  • Article 78 (fixed-term): the consequences can actually be remedied — the court temporarily suspends operations so the entity can remedy them, for 06 months–03 years.
  • Article 79 (permanent): the offence caused or was actually capable of causing harm to the lives of many people, caused an environmental incident, or adversely affected security, public order and social safety, and the consequences cannot be remedied — the entity’s operations in one or several sectors are terminated.
  • Where the entity was established solely to commit crimes: all of its operations are permanently suspended (Article 79(2)).

Whether the consequences can be remedied is assessed by the court on the facts of each case — it is not an automatic formula.

Combining punishments for multiple offences (Article 86(1))

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Illustration: couple signing legal documents at a desk
  • Same sector, multiple fixed-term suspensions combined may not exceed 04 years (point c) — so “maximum 3 years in all cases” is incorrect.
  • Both fixed-term and permanent suspension in the same sector (or two permanent suspensions in the same sector): the combined punishment is permanent suspension of that sector (point b).
  • Different sectors: no combination (point dd).

Example (illustrative): A manufacturing company discharges pollutants causing serious environmental harm and is prosecuted under a provision carrying fixed-term suspension. If the court finds the consequences can actually be remedied (the company can clean up the polluted area and compensate affected residents), it may suspend the company’s manufacturing operations for 02 years. If the consequences cannot be remedied (a serious environmental incident), the punishment may be permanent suspension under Article 79.

Key notes

  • Law 86/2025/QH15 (enacted 25/6/2025, effective 01/7/2025) did not amend Article 78 — the conditions and duration remain as in the 2017 Penal Code.
  • On enforcement against legal entities: the Law on Execution of Criminal Judgments 2025 (127/2025/QH15, passed 10/12/2025, effective 01/7/2026) has been enacted but is not yet in force at the time of writing — enforcement procedures need further verification before being relied upon.
  • Applicable text: the Penal Code consolidated in document 135/VBHN-VPQH (05/9/2025) — the latest version, in force at the time of writing (14/10/2026).

Need a criminal-risk assessment for your business?

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Transparency: this article is still in our reviewed by the QA Council and has not yet passed the internal QA panel.

For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.

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