Deferrals – Dissolution of Foreign trader’s branches

The operating licence of the Branch has a maximum validity period of 5 years. To continue operations or completely cease the activities of the Branch in Vietnam, the foreign trader must complete the administrative procedures for the Branch’s activities in accordance with the laws of Vietnam to extend or terminate the licence.

In extending the operating licence of the Vietnam-based Foreign trader’s branches: The Foreign trader is permitted to extend the licence when it reaches the expiration date stipulated in the licence, except in cases where there are violations leading to the revocation of the branch establishment licence.

Cases of Termination of Branch Operations:

1. At the request of the foreign trader.
2. When the foreign trader terminates its activities.
3. Upon the expiration of the operational term stated in the Branch Establishment License, without a request for extension or without approval from the licensing authority.
4. Revocation of the Branch Establishment License as per regulations.
5. The foreign trader or the branch no longer meets the conditions as stipulated.
6. Even in cases of terminating branch operations, the foreign trader must follow the prescribed procedures to complete the termination of the branch’s existence.

Relevant Legal Documents:

1. Commercial Law of 2005.
2. Decree No. 07/2016/NĐ-CP detailed regulations on establishment of representative offices or branches of foreign traders in vietnam under laws on commerce.
3. Circular No. 11/2016/TT-BCT specifying forms for implementing Decree No. 07/2016/NĐ-CP.

Documents for Extending the Branch Establishment License:

1. Request form for extending the Branch Establishment License.
2. Certified copy of the Business Registration Certificate or equivalent valid document of the foreign trader (certified by the consulate or legalised by the consulate as required).
3. Certified copy of audited financial statements or a document confirming tax or financial obligations for the most recent fiscal year. Alternatively, equivalent valid documents or confirmations demonstrating the existence and activities of the foreign trader in the most recent fiscal year.
4. Certified copy of the previously issued Branch Establishment License.

Procedures for License Extension:

1. The application for extending the Branch Establishment License must be submitted at least 30 days before the licence expires.
2. The foreign trader can submit the application in person, by post, or online.
3. Within 3 working days from the date of receiving the application, the licensing authority checks and reviews the validity of the documents and provides results:
   • If the documents are incomplete, the foreign trader is requested to supplement the documents once during the processing period.
   • If the documents are valid, within 5 working days from the date of receiving all required documents, the licensing authority grants the licence extension.
   • If the extension is not granted, a written notification with reasons is issued.
4. In some cases, the licensing authority may seek the opinion of the relevant sector management ministry. Within 5 working days from receiving the opinion, the licensing authority will issue or deny the extension, providing reasons in case of denial.

Application for Termination of branches operations:

1. Notification of Branch Termination (using the provided template);
2. Certified Copy of the Document Issued by the Licensing Authority Denying License Extension or the Decision to Revoke the Branch Establishment License.
3. List of Creditors and Unsettled Debts, encompassing both tax debts and social insurance payment arrears.
4. List of Employees and Their Current Entitlements.
5. Official Copy of the Branch Establishment License.

Procedures for Termination of branches operations:

1. The foreign trader may submit the branch termination documents either in person, through postal mail, or online.
2. Within a period of 3 working days from the date of receiving the application, the licensing authority will assess the validity of the submitted documents and provide feedback:
   • Invalid Documents: If the documents are deemed incomplete or insufficient, the foreign trader will be notified to provide the necessary additional documentation. This can be requested only once during the processing of the application.
   • Valid Documents: Upon receiving the complete and valid documents, within a period of 5 working days, the licensing authority will publish on its official electronic information portal about the termination of the branch’s operations.

Notes on Termination of branches operations:

1. In addition to completing the termination procedures as prescribed, the foreign trader with a branch must publicly announce the termination at the branch’s headquarters and fulfil other obligations as stipulated when the branch ceases operations.
2. The foreign trader with a terminated branch is responsible for executing contracts, settling debts, including tax debts, and ensuring lawful rights and benefits for the employees who worked at the branch, in accordance with legal regulations.

If there are any questions or concerns, please feel free to contact An Luật Việt Nam. Our company, with an experienced team of lawyers and consultants, will provide advice to clients for choosing the best options for their branch, as well as completing related documents and procedures, ensuring legal safety and legitimate benefits for all client activities.