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Dissolving an FDI company is more complex than dissolving a domestic company because three "files" must be handled at once: the investment project (IRC), the enterprise registration (ERC) and tax obligations, plus the outflow of capital through the DICA. This article by ACCA Consulting Vietnam sets out the tasks in the right order so investors can plan the timeline and avoid detours.
1. Before deciding to dissolve an FDI company
Dissolution is only possible when the company can pay all its debts and other property obligations in full. Before making the decision, management should therefore have a clear financial picture:
- A list of payables: suppliers, the parent company, employees, the tax authority, social insurance.
- A list of assets that can be liquidated: machinery, inventory, deposits, receivables.
- Contracts still in force: office leases, land leases, employment contracts, service contracts.
- The state of the books: years already audited, years not yet finalized, risk of back-tax assessments.
If the books still have many open items, review your accounting records first. A small unresolved issue can delay the closure of the tax code by several months.
2. A 6-stage dissolution roadmap
- Stage 1
The owner/Members' Council issues the dissolution decision and sends notices to the business registration authority, employees and creditors.
- Stage 2
Liquidate assets, collect receivables, terminate employment contracts and leases.
- Stage 3
Close the books, prepare financial statements up to the dissolution date, finalize corporate income tax (CIT/TNDN) and personal income tax (PIT/TNCN), and pay any outstanding tax.
- Stage 4
Complete procedures with the tax authority to terminate the tax code; cancel unused invoices.
- Stage 5
Terminate the investment project with the investment registration authority.
- Stage 6
Repatriate the remaining capital and assets through the DICA, close the account; complete the dissolution on the business registration system.
The exact order of the investment project and enterprise procedures may vary depending on the file and the authorities' guidance at the time. What is fixed is that the tax authority must confirm that all obligations have been fulfilled before the enterprise file can be closed.
3. How long does it take? Estimates by stage
The timeline depends mainly on the tax stage. The chart below is an illustrative example for a small trading company with tidy books and no significant fixed assets. Manufacturers with land, machinery or several unfinalized years will take considerably longer.
Illustrative example in weeks, not statutory time limits. The tax stage may take longer if a finalization inspection is carried out.
View as table
| Decision & notices | 2 tuần |
| Liquidating assets, settling debts | 6 tuần |
| Tax finalization | 8 tuần |
| Closing the tax code | 6 tuần |
| Terminating the project | 3 tuần |
| Repatriating capital, closing the DICA | 3 tuần |
4. Tax obligations when dissolving an FDI company
| Tax | Action | Common mistake |
|---|---|---|
| VAT | File up to the final period and deal with remaining input VAT | Forgetting to declare VAT on sales of liquidated assets |
| CIT | Finalize up to the dissolution date | Omitting income from asset liquidation |
| PIT | Finalize for employees and foreign experts | Expats leaving Vietnam without PIT finalization |
| Foreign contractor tax (FCT) | Declare payments to the parent company and foreign contractors | Group service fees without tax withheld |
| E-invoices | Stop using them and correct any erroneous invoices | Adjustment invoices still unresolved |
If a missed filing period is discovered, file a supplementary return as soon as possible. Late-payment interest is charged at 0.03% per day on the tax paid late, and penalties for late filing of tax returns can range from VND 2–5 million (1–30 days late) up to VND 15–25 million for organizations (under Decree 125/2020/ND-CP and its amending documents).
5. Repatriating remaining capital and closing the DICA
Once all debts and tax obligations have been paid, the remaining funds belong to the foreign investor. These funds must flow through the direct investment capital account (DICA). Banks usually require documents proving the source of funds and that obligations have been fulfilled.
- Dissolution decision and minutes of the owner/Members' Council meeting
- Financial statements up to the dissolution date (and the audit report, if any)
- Confirmation of fulfilment of tax obligations or a notice from the tax authority
- Document on termination of the investment project
- Calculation of the remaining capital and profit to be transferred out
FAQ
Can we suspend operations instead of dissolving?
Yes, if the investor is not yet sure about exiting completely. Suspension still carries some reporting obligations, but it preserves the legal entity and the project so you can resume later.
Can we dissolve while still owing money to the parent company?
The debt to the parent company must also be dealt with: repaid, converted into capital through the proper procedure, or waived by the parent in writing. Each option has different tax consequences, which should be calculated in advance.
Is an audit of the financial statements mandatory in the year of dissolution?
FDI companies must have their annual financial statements audited. For the dissolution period, discuss the documentation requirements with the tax authority and the bank in advance to avoid having to redo the work.
Plan your dissolution before filing
ACCA Consulting Vietnam provides accounting services in Ho Chi Minh City, helping FDI companies close their books and finalize taxes before closing the tax code. Get advice.
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