Closing a Representative Office of a foreign trader in Vietnam is the termination of the legal entity status that has been granted an operation license at the request of a foreign trader or in accordance with the law. Regarding this issue, Vietnamese law has specific provisions on how to close a Representative Office and the order and procedures to be carried out. In this article, TTVN Legal will provide you with basic information so that you can be proactive in operating a Representative Office in Vietnam.
1. Cases of closing a Representative Office of a foreign trader
A Representative Office of a foreign trader in Vietnam is terminated in the cases specified in Article 35 of Decree No. 07/2016/ND-CP as follows:
- At the request of a foreign trader;
- When a foreign trader ceases to operate under the laws of the country where it was established;
- Expiration of the operation term under the License for Establishment of a Representative Office (“License”), but the foreign trader does not request an extension or is not approved by the licensing authority;
- The License has been revoked due to a violation or no longer meets the conditions to open a Representative Office.
2. Order and procedures for closing a Representative Office
Step 1: Proposal to close a Representative Office at the licensing authority
The foreign trader submits documents to close the Representative Office in person or by post or online to the licensing authority.
Within 03 working days from the date of receipt of the dossier, the licensing authority shall examine and request supplementation if the dossier is incomplete or invalid.
Within 05 working days from the date of receipt of complete and valid dossiers, the licensing authority shall have to announce on its website the termination of operation of the Representative Office.
Step 2: Proposal to terminate the validity of the tax code at the tax authority
The Representative Office must fulfill its tax obligations before requesting the invalidation of tax code. The foreign trader submits dossiers of tax code invalidation to the tax authority.
Within 02 working days from the date on which the tax authority receives the complete application as prescribed, the tax authority shall receive the dossier and issue a Notice of the Representative Office’s cessation of operation and is in the process of terminating the validity of the tax code.
Within 03 working days after the tax authority has verified that the Representative Office has fulfilled its tax obligations, the tax authority shall issue a Notice of the Representative Office’s invalidation of the tax code as prescribed. .
Step 3: Hand over the Representative Office’ seal to the police authority
The foreign trader hands over Representative Office’ seal to the police authority where has issued the previous seal sample registration certificate to revoke and destroy the seal in accordance with law.
Procedure 1: Proposal to close a Representative Office at the licensing authority:
The foreign trader prepares documents as prescribed in Article 35 of Decree No. 07/2016/ND-CP as follows:
- Notice of termination of operation of Representative Office (signed by the foreign trader)
- A copy of the document of the licensing authority not to renew the License (in the case of termination of operation of the Representative Office for reasons that are not allowed by the licensing authority to extend the operation term or a copy of the decision on revocation of the License (in case of termination of operation under the decision of the licensing authority);
- List of creditors and outstanding debts, including tax and social insurance debts;
- List of employees and their current corresponding benefits;
- Original copy of License.
Procedure 2: Proposal to terminate the validity of the tax code at the tax authority:
The foreign trader prepares documents as prescribed in Article 14 of Circular No. 105/2020/TT-BTC as follows:
- A written request for tax code termination;
- A copy of the decision or notice on termination of operation of Representative Office, a copy of License (if any);
- Original copy of tax registration certificate.
Procedure 3: Hand over the seal at the police authority:
The foreign trader hands over the Representative Office’ seal to the police authority with the following references according to Decree No. 99/2016/ND-CP:
- Dispatch of seal handover;
- Original copy of seal sample registration certificate;
- A copy of License;
- Representative Office’ seal;
- Document to terminate operation of Representative Office.
4. Notes for investors
Representative Office is a dependent unit of a foreign trader, therefore, the operation of a Representative Office is responsible for the foreign trader and the head of the Representative Office. The foreign trader is responsible for performing contracts, paying debts, including tax debts, and settling all legal benefits for employees who have worked at the Representative Office in accordance with Vietnamese law.
The foreign trader and the Representative Office must publicly post up the termination of operation of Representative Office at the headquarters of the Representative Office.
In order not to disrupt their commercial activities, foreign traders need to learn in general about the operation of the Representative Office: from the beginning of establishment, exercise of rights and obligations, tax registration, recruitment… until there is a need to close it.
How TTVN Legal assist you?
Based on your specific needs when accessing the Vietnamese market, TTVN Legal will:
- Advising your ability to reach the necessary and sufficient conditions before establishing a Representative Office in Vietnam;
- Consulting on procedures for requesting the establishment of a Representative Office, rights and obligations of a Representative Office and necessary procedures after being licensed to establish a Representative Office in Vietnam;
- Regular legal consulting, warning of potential legal risks in the process of operation, supporting in making reports in accordance with the law of the Representative Office in Vietnam;
- Consulting and introducing you to the potential partners related to the expected operation of the Representative Office in Vietnam;
- Consulting and supporting you to close a Representative Office.
Contact us if you need further advice.
Note: This article is for informational purposes only and it is not legal advice. The content of the article represents its own TTVN Legal, it is subject to change without prior notice.