VI Representative offices of foreign traders are a very popular type in the Vietnamese market because of its outstanding advantages. Normally, foreign parent companies establish representative offices to perform the functions of liaison offices, market research, and promote business investment opportunities of foreign parent companies in Vietnam. . However, there are also many representative offices that do not have the need to continue operating or the parent company has other investment projects that lead to the termination of representative office operations. Closing a Representative Office is somewhat easier than dissolving a company, but not all Representative Offices understand and comply with the correct procedures as prescribed by law. In this article, Pham Consult will outline the processes and procedures that need to be followed when closing a representative office of a foreign trader in Vietnam.
Related legal documents:
- Commercial Law 2005;
- Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of foreign traders in Vietnam.
1. Cases where foreign traders terminate representative office operations
According to Article 35 of Decree 07/2016/ND-CP, Representative Offices terminate operations in the following cases:
– At the request of foreign traders.
– When a foreign trader terminates its operations according to the law of the country or territory where that trader was established or registered for business.
– The operating term under the Representative Office Establishment License or Establishment License expires and the foreign trader does not request an extension.
– The operating period under the Representative Office Establishment License expires without the License-issuing Agency agreeing to extend it.
– License to establish Representative Office revoked
– Foreign traders and representative offices no longer meet one of the conditions to be granted an establishment license.
2. Procedures for terminating representative office operations
– Step 1: Finalization of tax obligations including procedures for closing the representative office’s tax code and personal income tax finalization of the representative office head.
– Step 2: Finalize insurance obligations with the social insurance agency for employees (if any), financial obligations with employees (if any);
– Step 3: Return the representative office stamp to the police station
– Step 4: Carry out procedures for returning the representative office’s operating license to the Department of Industry and Trade.
3. Documents for termination of representative office operations
Documents for termination of representative office operations are specified in Article 36 of Decree 07/2016/ND-CP as follows:
– Notice of termination of representative office or branch operations according to the form of the Ministry of Industry and Trade signed by an authorized representative of the foreign trader;
– Copy of the document of the Licensing Agency not to extend the License to establish a Representative Office or the License to establish a Branch (for the cases specified in Clause 4, Article 35 of this Decree) or a copy of the Decision revoke the License to establish a Representative Office, of the Licensing Agency;
– List of creditors and unpaid debts, including tax debt and social insurance payment debt;
– List of employees and their current corresponding benefits;
– Original copy of Representative Office establishment license.
Competent agency to receive documents:
+ Department of Industry and Trade in case the representative office’s headquarters is located outside industrial parks, export processing zones, economic zones and high-tech zones.
+ Management Board of industrial parks, export processing zones, economic zones, and high-tech zones (hereinafter referred to as the Management Board) in case the Representative Office is headquartered in an industrial park or export processing zone, economic zones, high-tech zones.
Notes when closing/dissolving representative offices of foreign traders
The state agency does not issue a written confirmation of the termination of the representative office’s operations, but is responsible for publishing on its website the termination of the representative office’s operations.
Foreign traders and Representative Offices must publicly post the termination of operations at the Representative Office’s headquarters and perform other obligations according to the law when the Representative Office terminates operations.
During the process of closing the representative office, the tax authority inspects and finalizes taxes. In case the representative office commits a violation, it must pay the full amount of tax and fines, if any, before issuing a notice of termination. tax code force.
4. Consulting Service terminates the operation of Pham Consult’s Representative Office
With many years of experience in consulting on termination of operations of Representative Offices and other legal issues during the registration process of termination of operations such as tax settlement, labor, social insurance, … Pham Consult provides services with the most competitive costs on the market, supporting customers to achieve maximum convenience in the following tasks:
- Advise on conditions, procedures and related issues when terminating the operation of a Foreign Investor’s Representative Office.
- Consulting and implementing tax finalization procedures and insurance obligations with social insurance agencies, financial obligations with employees (usually a time-consuming and labor-intensive part for large companies). The company has no experience in taxes, accounting, social insurance, …)
- Prepare all documents in bilingual (Vietnamese and English) to ensure that foreign investors can easily monitor and report to the Parent Company (if required by the customer);
- Support customers with notarized copying, consular legalization, and notarized translation procedures;
- Representing customers to submit applications and receive results at state agencies;
- Consulting and explaining to tax authorities, social insurance, and management agencies in case problems arise;
If the Customer intends to terminate the operation of the Representative Office and there are still many problems in understanding the regulations of this procedure, please contact us using the information below for advice. free consultation. Pham Consult is committed to providing customers with the best advice and support to help you optimize operating costs for your business goals.
