Terminating FDI Investment Projects in Vietnam

Stopping an FDI project in Vietnam is not as simple as “locking the doors and returning the premises”. The law requires a formal procedure to terminate the investment project, surrender the Investment Registration Certificate (IRC), and settle all obligations. Get it wrong and the investor loses many more months — and may be fined.

This article explains when a project must be terminated, how it differs from dissolving the company, and the step-by-step process under current regulations.

When must an investment project be terminated?

Under clause 1, Article 36 of the Law on Investment 2025, an investor terminates an investment project on their own in three cases:

• The investor decides to terminate — the most common: the project is loss-making, out of capital, the strategy has changed, or joint-venture partners are in conflict;
• Under termination conditions stated in the contract or the enterprise’s charter — e.g. the joint-venture contract provides that the project automatically terminates when one party withdraws capital;
• The project’s operation term has expired — the term stated on the IRC has ended and the investor has not carried out the extension procedure.

In addition, the investment registration authority (the authority that issues and revokes IRCs — usually the Department of Finance; the Industrial/Economic Zone Management Board if the project is inside an industrial zone) may also terminate a project on its own initiative in the cases set out in clause 2, Article 36 of the Law on Investment 2025. Most notably:

• Operations suspended for more than 12 months without being able to contact the investor;
• More than 24 months since the expiry of the deadline for achieving the operational objectives stated on the IRC, without completion;
• The project has its land revoked under land law;
• An economic organisation that has been dissolved but has not terminated or transferred the investment project — a new feature of the Law on Investment 2025.

Abandoning a “clinically dead” project does not make it disappear — sooner or later the state authorities will act; when terminated on the authorities’ initiative, the investor loses control over timing and the method of liquidation; if contact is lost, the project’s assets may be managed under the civil-law mechanism for persons absent — instead of being self-liquidated by the investor (clause 3, Article 67 of Decree 96/2026/ND-CP).

How does terminating an investment project differ from dissolving the enterprise?

The most confusing point: an investment project is a set of proposals to invest capital in business (clause 4, Article 3 of the Law on Investment 2025), recorded on the IRC; an enterprise is a legal person, recorded on the Enterprise Registration Certificate (ERC). An FDI company may carry out one or more investment projects.

Two rules of thumb:

1. Only terminate the project when the company still has a reason to exist (another project still running, or keeping the legal person for new opportunities) — opening a new FDI company later costs much more than keeping the existing one.
2. Consider dissolving the company when it is the sole legal person implementing the project and the investor wants to exit entirely (or transfer the company/project if it still has value, instead of dissolving). Note the new rule at point i, clause 2, Article 36 of the Law on Investment 2025: a company that has been dissolved while its project has not been terminated or transferred will have the project terminated on the authorities’ initiative. Therefore terminate the project first (or in parallel), then dissolve the company.

Still unsure? See FDI divestment: bankruptcy, dissolution or transfer? to compare costs, timelines and risks.

The project termination procedure: 6 steps

The procedure follows Article 66 of Decree 96/2026/ND-CP. The actual time depends on the specific file: project scale, how “clean” the books are, and the processing pace of the investment registration authority.

Step 1 — Adopt the termination decision and conduct a full review

The Members’ Council / General Meeting of Shareholders / company owner adopts the decision to terminate the project; before signing, review:

• The operation term stated on the IRC and the investment policy approval decision (if any);
• The company charter, joint-venture / business cooperation contracts — whether they contain any project termination clauses;
• The status of debts, contracts being performed, and the project’s assets.

This decision is a mandatory document for filing at the next step.

Step 2 — Notify the investment registration authority (within 15 working days)

The statutory deadlines under clause 2, Article 66 of Decree 96/2026/ND-CP:

• Where the investor decides to terminate on their own (point a, clause 1, Article 36 of the Law on Investment 2025): send the termination decision, the investment policy approval decision and the IRC (if any) to the investment registration authority within 15 working days of the decision date;
• Where termination follows the contract/charter or expiry of the term (points b, c, clause 1, Article 36): notify and surrender the investment policy approval decision (if any) and the IRC (if any) within 15 working days of termination, with copies of the documents recording the termination.

Within 03 working days of receiving complete documents, the investment registration authority notifies the termination to the relevant authorities (tax, land, labour…).

Step 3 — Liquidate the project (in parallel)

Under clause 4, Article 36 of the Law on Investment 2025, the investor self-liquidates the project. The work includes:

• Liquidating machinery, equipment and inventory; finalising factory leases and contracts with suppliers/customers; recovering and paying debts.

If the company is dissolved or goes through bankruptcy during liquidation, liquidation switches to the law on dissolution and bankruptcy (point c, clause 8, Article 66 of Decree 96/2026/ND-CP).

Step 4 — Finalise tax, labour and insurance obligations (in parallel with Step 3)

• Tax: the company still exists so it continues full filing; finalise CIT relating to the project, handle VAT refunds if any, and settle tax debts. Only when the company is dissolved is the tax code termination procedure carried out. See: Tax finalisation upon dissolution / FDI project termination and Terminating the tax code upon FDI enterprise dissolution.
• Labour: terminate labour contracts in accordance with Article 34 of the Labour Code 2019; if the project stops for economic reasons or because of restructuring or technology changes affecting the jobs of many people, the company must draw up a labour utilisation plan (clauses 3, 4 of Article 42 and Article 44). Employees who have worked regularly for 12 months or more are paid severance allowance (Article 46 — half a month’s salary per year of work); employees who lose their jobs under clause 11, Article 34 are paid job-loss allowance (Article 47 — 01 month’s salary per year of work but at least 02 months’ salary; the period for calculation is the total actual working time minus the time covered by unemployment insurance and the time for which allowances have already been paid). Finalise social insurance records under the Law on Social Insurance 2024 (41/2024/QH15). See: Handling labour matters when terminating an FDI project.
• Work permits of foreign experts working on the project must be handled (revoked / not renewed) when the labour contracts terminate.

Step 5 — Handle land and factories (if the project uses land)

Point d, clause 1, Article 82 of the Land Law 2024 provides for land revocation when an investment project is terminated — but not every case leads to immediate revocation; the treatment depends on the form of land use:

• Land allocated or leased by the State: the investor may continue using the land for 24 months from the date the project terminates, to transfer land use rights or sell assets attached to the land to other organisations or individuals in accordance with the law (clause 2, Article 35 of Decree 102/2024/ND-CP). Only after the 24 months expire without a transfer/sale does the State revoke the land, without compensation for the land and assets attached to it;
• Land subleased from an infrastructure business (inside industrial parks, industrial clusters): returning the premises and handling factories attached to the land follows the sublease contract, not the administrative land revocation mechanism;
• Assets attached to land (factories on leased land): handled under land law — transferred, liquidated or handed over as agreed (point b, clause 8, Article 66 of Decree 96/2026/ND-CP).

This is the stage most prone to disputes with the land lessor or partners. See: Land and factories upon FDI project termination.

Step 6 — Finalise: the IRC expires, handle the capital account, repatriate capital

• The investment policy approval decision (if any) and the IRC terminate their validity from the date the decision to terminate the investment project takes effect (point d, clause 2, Article 66 of Decree 96/2026/ND-CP). Where the investment registration authority terminates on its own initiative (clause 2, Article 36), it issues a termination decision and simultaneously revokes those documents.
• Handle the investment capital account at the bank — close it or continue using it depending on the case (e.g. the company still has another project or obligations that must be paid through this account) — under Circular 38/2026/TT-NHNN (new name effective from 18/8/2026; previously called the direct investment capital account — DICA); repatriate capital and lawful profits under foreign exchange management rules. See: Repatriating FDI capital.
• If the company is to be dissolved at the same time: carry out dissolution under the Law on Enterprises 2020 and Decree 168/2025/ND-CP on business registration. See Dissolving an FDI enterprise.

Where only part of a project is terminated, the investor may continue the remaining part and carry out the procedure to adjust the investment project (clause 6, Article 66 of Decree 96/2026/ND-CP).

Documents to prepare

• [ ] The decision to terminate the investment project by the owner / Members’ Council / General Meeting of Shareholders;
• [ ] The original Investment Registration Certificate (IRC) for surrender — mandatory for cases under points b, c, clause 1, Article 36 of the Law on Investment 2025 (clause 2, Article 66 of Decree 96/2026/ND-CP); for other cases, prepare copies for the records;
• [ ] A copy of the investment policy approval decision (if the project falls in this category);
• [ ] The notice to the investment registration authority (the Department of Finance or the Industrial/Economic Zone Management Board);
• [ ] Copies of the documents recording the termination (for cases of termination under the contract/charter or expiry of the term);
• [ ] The company charter; joint-venture / business cooperation contracts (if any);
• [ ] The inventory record and the asset liquidation plan for the project;
• [ ] Tax, social insurance and labour files relating to the project;
• [ ] Land files: the land lease contract, the land use rights certificate (if any);
• [ ] The legal representative’s citizen ID card / passport; power of attorney (if any).

Download the complete version to print and tick off each step: The 12-step FDI project termination checklist (free, no information required).

Tax, labour and land obligations: a summary

The three groups of obligations that generate the most hidden costs, each with its own in-depth analysis:

Tax. Terminating a project is not the same as terminating the tax code — the tax code only terminates when the enterprise ceases business operations, is dissolved or goes bankrupt (Law on Tax Administration 2025 — Decree 252/2026/ND-CP; Circular 90/2026/TT-BTC). A company that still exists must fully finalise the terminated project’s tax obligations. See: Tax finalisation upon dissolution / FDI project termination, Terminating the tax code upon FDI enterprise dissolution, Factors affecting the time and cost of dissolving an FDI enterprise.

Labour and insurance. Terminating a project usually entails mass termination of labour contracts: severance allowance (Article 46 of the Labour Code 2019), social insurance record finalisation (Law on Social Insurance 2024), and handling foreign experts’ work permits. Carelessness here easily leads to collective complaints. See: Handling labour matters when terminating an FDI project.

Land and foreign exchange. Land allocated/leased by the State may continue to be used for 24 months to transfer land use rights or sell assets attached to the land before the State revokes it (point d, clause 1, Article 82 of the Land Law 2024; clause 2, Article 35 of Decree 102/2024/ND-CP); land subleased from an infrastructure business is handled under the sublease contract, not administrative revocation. Lawful capital and profits are repatriated through the investment capital account (Circular 38/2026/TT-NHNN). See: Land and factories upon FDI project termination, Repatriating FDI capital.

Risks of doing it wrong yourself

• Missing the 15 working day notification deadline: may be subject to administrative sanctions in the planning and investment field (Decree 122/2021/ND-CP, as amended by Decree 288/2026/ND-CP), with remedial measures requiring supplementary submission of the notice/decision to the investment registration authority; the applicable fines follow the latest consolidated text.
• Abandoning the project without procedures: when a project stops operating and the investor cannot be contacted, the investment registration authority must take contact-seeking steps (a 30-day period) and publish a public notice (90 days) under clause 1, Article 67 of Decree 96/2026/ND-CP; only after these measures have been taken and 12 months have passed since the project stopped operating without contact may the authority decide to terminate the project. The project’s assets are then managed under civil law on the property of persons absent from their place of residence (clause 3, Article 67).
• Confusing project termination with company dissolution: terminating the project and thinking everything is done, leaving a “zombie” company that still incurs tax filing and periodic reporting obligations; conversely, dissolving the company while forgetting to terminate the project falls under point i, clause 2, Article 36 of the Law on Investment 2025. See: Abandoning an inactive FDI company: 7 legal risks.
• Sloppy asset liquidation and contract settlement: disputes with contractors, land lessors and employees — just when the company no longer has the machinery to handle them. See: Disputes when terminating an FDI project.
• Personal liability of the legal representative: if the enterprise is subject to enforcement of an administrative decision on tax administration, has tax debts of VND 500 million or more overdue for 120 days or more without fulfilling the payment obligation, the legal representative (and the individual who is the beneficial owner of the enterprise) may be subject to suspension of exit (clause 5, Article 17 of the Law on Tax Administration 2025; point b, clause 1, Article 28 of Decree 252/2026/ND-CP). See: Personal liability of the legal representative upon dissolution / FDI project termination.

If the project is only in temporary difficulty, consider suspension versus outright termination before making an irreversible decision.

Why choose FLAT

FLAT is a boutique law firm serving foreign investors — FDI, cross-border M&A and disputes are our daily work. For project termination files, FLAT works from the standard 12-step checklist, coordinates with the investor’s accountants/auditors so the books are “clean” before filing, and represents clients before the Department of Finance, tax authorities and land authorities from start to finish.

Fee framework

Costs depend on project scale (assets to liquidate, headcount, land, number of IRCs). Three service packages:

• File review package: legal review, drafting of the complete file, and filing guidance — suitable when the company has staff who can carry out the administrative steps themselves;
• Full-journey accompaniment package: FLAT represents the client before the investment registration, tax and land authorities from step 1 to step 6, coordinating liquidation and finalisation;
• Turnkey package: project termination simultaneous with enterprise dissolution — a single point of contact until the company is removed from the register and the tax code terminates.

The first 30-minute consultation is free; FLAT sends a detailed quotation after the consultation. FLAT’s general fee policy — the file assessment phase fee is deducted from the turnkey fee when the client continues with FLAT — see Turnkey FDI dissolution / project termination services.

Frequently asked questions

Is terminating an investment project the same as dissolving the company?
No. Terminating the project only makes that project’s IRC expire; the company still exists and may continue other projects. Only when exiting Vietnam entirely is company dissolution needed — and the project must still be terminated first or in parallel (clause 7, Article 66 of Decree 96/2026/ND-CP).

The company has two projects and wants to stop only one — how?
Two different situations must be distinguished:

• Stopping one of the two projects entirely: this is terminating the whole of that project — follow the procedure in clauses 1 and 2, Article 66 of Decree 96/2026/ND-CP (adopt the termination decision, notify and surrender the IRC within 15 working days, self-liquidate the project); the remaining project continues normally, no company dissolution needed;
• Stopping only part of the activities within the same project: this is “partial termination of an investment project” under clause 6, Article 66 of Decree 96/2026/ND-CP — the investor may continue the remaining part and must carry out the procedure to adjust the investment project (adjusting objectives, scale, investment capital, schedule…).

Must the tax code be terminated when a project is terminated?
No. The tax code only terminates when the enterprise ceases business operations, is dissolved or goes bankrupt (Law on Tax Administration 2025 — Decree 252/2026/ND-CP; Circular 90/2026/TT-BTC). Terminating one project while the company still operates leaves the tax code unchanged.

The project’s term on the IRC has expired and we do not want to extend — what must be done?
This is termination under point c, clause 1, Article 36 of the Law on Investment 2025. Within 15 working days of termination, the investor must notify and surrender the IRC (with the investment policy approval decision if any), with copies of the documents recording the termination (point b, clause 2, Article 66 of Decree 96/2026/ND-CP).

After the project is terminated, how soon can capital be repatriated?
Once the IRC has expired and tax obligations and debts are settled, the investor may repatriate lawful capital and profits through the investment capital account (Circular 38/2026/TT-NHNN); how fast this goes depends mainly on whether the tax finalisation is “clean”. See Repatriating FDI capital.

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