⭐ How to Close a Representative Office in Vietnam: A Complete Legal Guide

When a foreign company no longer needs to maintain its presence in Vietnam, it may proceed with the closure of its Representative Office (RO).

Closing or terminating the operation of a Representative Office involves more than submitting documents to the licensing authority. The foreign company and the RO must also complete relevant obligations relating to tax, social insurance, employees, bank accounts, the seal and other legal matters before the RO can formally cease its operations in Vietnam.

This article outlines the circumstances in which a Representative Office may be closed, the documents required, the procedures involved and the key matters to consider when terminating the operation of a Representative Office of a foreign company in Vietnam.

Planning to close a Representative Office in Vietnam?

LTS LAW advises and assists foreign companies with Representative Office closure procedures in Vietnam, from document preparation through completion of the relevant procedures.

1. When Must a Representative Office Terminate Its Operation?

Under Article 35 of Decree No. 07/2016/ND-CP, a Representative Office shall terminate its operation in the following cases:

1. At the request of the foreign company.

2. When the foreign company terminates its operation in accordance with the laws of the country or territory where it was established or registered for business.

3. Upon expiry of the operating term under the Representative Office License where the foreign company does not request an extension.

4. Upon expiry of the operating term under the Representative Office License where the licensing authority does not approve the extension.

5. Where the Representative Office License is revoked in accordance with applicable law.

6. Where the foreign company or Representative Office no longer satisfies one of the conditions prescribed under the applicable regulations.

Accordingly, the closure of a Representative Office does not occur only when a foreign company voluntarily decides to shut down its local presence. A Representative Office may also terminate its operation upon expiry of its license, where the license is not extended, where the license is revoked or where the relevant legal conditions are no longer satisfied.

2. Documents Required for Representative Office Closure

Under Article 36 of Decree No. 07/2016/ND-CP, the dossier for terminating the operation of a Representative Office consists of one set of documents.

1. Notice of Termination of Operation

A notice of termination of the Representative Office’s operation using the form issued by the Ministry of Industry and Trade and signed by an authorised representative of the foreign company.

2. Documents Relating to Non-Extension or Revocation of the License

A copy of the document issued by the licensing authority regarding the non-extension of the Representative Office License, or a copy of the decision to revoke the Representative Office License, depending on the circumstances.

3. List of Creditors and Outstanding Debts

The list must include:

Tax debts;
Outstanding social insurance contributions;
Other unpaid debts.

4. List of Employees

A list of employees and their respective current entitlements.

5. Original Representative Office License

The original Representative Office License must be submitted.

Under the applicable regulations, the foreign company and the Chief Representative jointly bear responsibility for the truthfulness and accuracy of the dossier for termination of the Representative Office’s operation.

Where the Representative Office Is Relocated to Another Province or City

Where a Representative Office terminates its operation in one centrally administered province or city, or in a geographical area under the management of a Management Board, in order to relocate its head office to another centrally administered province or city or another geographical area under the management of a different Management Board, the closure dossier shall only include:

The notice of termination of operation; and
The original Representative Office License.

3. Procedures for Closing a Representative Office in Vietnam

The closure of a Representative Office should be carried out step by step while completing the relevant obligations with the competent authorities.

Step 1 — Decision to Close the Representative Office and Settle Employee Entitlements

The foreign company issues a decision to terminate the operation of the Representative Office, notifies its employees and settles the relevant employment regimes and employee entitlements in accordance with the law.

Step 2 — Submit the Termination Dossier

The foreign company submits the notice of termination of the Representative Office’s operation online to the licensing authority.

Following submission, the licensing authority will generally issue a notice requiring the Representative Office to complete the relevant procedures necessary to finalise the termination of its operation.

Step 3 — Complete Procedures with Relevant Authorities

After submitting the notice of termination, the foreign company and the Representative Office must continue to complete the relevant obligations required to close the Representative Office.

3.1. Termination of the Tax Code

The Representative Office carries out the procedure for termination of the effectiveness of its tax code with the tax authority.

The dossier includes:

Written request for termination of the effectiveness of the tax code;
Decision on termination of the Representative Office’s operation;
Copy of the Representative Office License;
Copy of the Representative Office’s tax code notification.

The tax authority conducts the tax finalisation of the Representative Office and simultaneously carries out personal income tax finalisation for the foreign Chief Representative and employees working at the Representative Office.

Note: Termination of the effectiveness of the tax code is an important step in closing a Representative Office. Accordingly, tax obligations should be reviewed and settled before the overall closure process is completed.

3.2. Completion of Social Insurance Obligations

The Representative Office contacts and works with the social insurance authority to complete the relevant regimes and obligations relating to employees working at the Representative Office.

3.3. Closure of the Bank Account

After the tax authority completes the tax finalisation and issues the document confirming termination of the effectiveness of the Representative Office’s tax code, the Representative Office proceeds to close its bank account.

3.4. Return of the Seal

The Representative Office works with the local police authority to return its seal in accordance with applicable regulations.

Step 4 — Submit the Final Closure Documents

After completing all of the above procedures, the Representative Office submits the documents and returns the original Representative Office License to the licensing authority.

5. Which Authority Receives the Representative Office Closure Dossier?

The authority receiving the closure dossier depends on the location of the Representative Office’s head office.

Representative Office Outside an Industrial Park, Export Processing Zone, Economic Zone or Hi-Tech Park: The dossier is submitted to the Department of Industry and Trade of the relevant province or centrally administered city.
Representative Office Located in an Industrial Park, Export Processing Zone, Economic Zone or Hi-Tech Park: The dossier is submitted to the competent Management Board of the industrial park, export processing zone, economic zone or hi-tech park.

6. Other Obligations Upon Representative Office Closure

In addition to completing the closure dossier, the foreign company and the Representative Office must fulfil other relevant obligations as prescribed by law.

Public Notice of the Closure

The foreign company and the Representative Office must publicly post a notice of the termination of the Representative Office’s operation at the Representative Office’s head office.

Settlement of Outstanding Debts

The foreign company whose Representative Office has terminated its operation remains responsible for:

Performing outstanding contracts;
Paying outstanding debts, including tax debts;
Fully settling the lawful entitlements of employees who have worked at the Representative Office.

These obligations are prescribed under Article 38 of Decree No. 07/2016/ND-CP.

7. Tax Considerations When Closing a Representative Office

Tax is generally one of the matters that must be addressed before completing the closure of a Representative Office.

When proceeding with the termination, the Representative Office must complete the procedure for termination of the effectiveness of its tax code and carry out tax finalisation.

The tax authority also conducts personal income tax finalisation for the foreign Chief Representative and employees working at the Representative Office.

During the tax review and finalisation process, if the Representative Office has any tax violations, it must fully settle the relevant tax liabilities and penalties, if any, before the tax authority issues the notice confirming termination of the effectiveness of the tax code.

Accordingly, the company should review its outstanding tax obligations before commencing the closure process to minimise delays arising from unresolved tax matters.

8. Fees for Closing a Representative Office

Under the current regulations, the procedure for terminating the operation of a Representative Office of a foreign company does not incur a state administrative fee. The National Public Service Portal currently indicates that the applicable fee and charge for this procedure are VND 0.

The absence of a state administrative fee does not mean that the company will not incur other costs during the closure process, such as document processing, translation, document legalisation or other related service costs, where applicable.

9. Who Is Authorised to Sign the Representative Office Closure Dossier?

The foreign company is responsible for signing the dossier for termination of the Representative Office’s operation and is responsible for directly carrying out, or authorising an appropriate organisation or individual to complete, the closure procedures in Vietnam.

Accordingly, authorising another party to carry out the procedures does not change the responsibility of the relevant parties for the submitted dossier.

10. Key Matters to Complete When Closing a Representative Office

The process of closing a Representative Office can be summarised into the following key areas:

1. Decision to close: The foreign company issues the decision and notifies the employees.

2. Closure dossier: Prepare and submit the dossier to the licensing authority.

3. Tax: Complete tax finalisation and the procedure for termination of the effectiveness of the tax code.

4. Employees: Settle the relevant rights and obligations concerning employees.

5. Social insurance: Complete the relevant procedures with the social insurance authority.

6. Bank: Close the Representative Office’s bank account.

7. Seal: Carry out the procedure for returning the seal to the local police authority.

8. Licensing authority: Complete the procedure for terminating the Representative Office’s operation with the competent authority.

9. Remaining obligations: Pay outstanding debts, perform outstanding contracts and fully settle the lawful entitlements of employees.

Related service: [How to Amend the Representative Office License in Vietnam].

11. How LTS LAW Supports Representative Office Closure

LTS LAW advises and assists foreign companies throughout the process of closing their Representative Offices in Vietnam.

Our support may include:

Advising on the conditions and procedures for terminating the operation;
Reviewing and preparing the closure dossier;
Representing or acting under authorisation in procedures with the licensing authority;
Assisting in finding an accounting service provider to carry out procedures for termination of the effectiveness of the tax code;
Assisting in finding an accounting service provider to address matters relating to employees and social insurance;
Assisting with bank account closure procedures;
Assisting with seal-related procedures;
Completing the procedure for terminating the Representative Office’s operation.

If a company is planning to close its Representative Office, reviewing outstanding obligations before submitting the closure dossier can help ensure that the process is properly organised and minimise issues during the procedure.

[Learn More About the Obligations of a Representative Office of a Foreign Company in Vietnam]

Representative Office Closure in Vietnam

Closing a Representative Office of a foreign company in Vietnam is a multi-step process that involves more than submitting a termination dossier to the licensing authority.

The company must also address matters relating to tax, employees, social insurance, bank accounts, the seal and other outstanding legal obligations before completing the closure of the Representative Office.

Preparing a complete dossier and reviewing the relevant obligations from the outset can help the company manage the closure process more effectively and minimise potential issues.

Planning to Close a Representative Office in Vietnam?

Contact LTS LAW for advice on the required documents, procedures and related matters.

This article is provided for general informational and reference purposes only and does not constitute legal advice. The application of relevant laws and procedures may vary depending on the specific documents, circumstances, and countries or territories involved.

For advice tailored to your specific circumstances, please contact LTS LAW FIRM for further consultation and legal assistance.

LTS LAW FIRM
6th Floor, 520 Cach Mang Thang Tam
Nhieu Loc Ward, Ho Chi Minh City, Vietnam
Tel: (+84) 965 000 524
Email: contact@lts.com.vn