Detailed Guidance on the Procedure for Business Suspension in Vietnam in 2024

In 2024, amidst constant economic fluctuations and increasing competition, numerous enterprises face the decision to suspend business operations for restructuring or to reconsider their strategic direction. However, ceasing operations is not merely an internal decision but also requires businesses to comply with legal regulations, adhering to the correct processes and procedures mandated by Vietnamese law. This article by INTER JUSTICE provides detailed step-by-step guidance on the business suspension procedure, helping business owners avoid unnecessary legal complications and optimize the process effectively.

1. What is Business Suspension?

Pursuant to Clause 1, Article 41 of Decree 01/2021/ND-CP, business suspension is a legal status of an enterprise. Accordingly, business suspension is the legal status of an enterprise during the period of temporary cessation of business operations as stipulated in Clause 1, Article 206 of the Law on Enterprises 2020, wherein:

• The date of change to the temporary cessation of business operations legal status is the date the enterprise registers the commencement of its business suspension.
• The date of termination of the temporary cessation of business operations legal status is the end date of the business suspension period that the enterprise has notified or the date the enterprise registers to resume business operations before the notified deadline.

2. Dossier for Business Suspension

Pursuant to Article 66 of Decree 01/2021/ND-CP, in the event of business suspension, an enterprise must send a notification to the Business Registration Office where the enterprise’s head office is located no later than 03 working days before the date of business suspension.

Depending on the type of company, the composition of the business suspension dossier will differ. The necessary documents to prepare are as follows:

After receiving the enterprise registration dossier, the Business Registration Office issues a Receipt, examines the validity of the dossier, and issues a confirmation of the enterprise’s registration for business suspension within 03 working days from the date of receipt of a valid dossier.

Simultaneously, the Business Registration Office updates the legal status of the enterprise and the status of all its branches, representative offices, and business locations in the National Enterprise Registration Database to the status of business suspension.

Note: If an enterprise wishes to continue its business suspension after the notified period expires, it must notify the Business Registration Office no later than 03 working days before the date of continued suspension. The duration of each notification of business suspension must not exceed one year.

3. Procedure for Registering Business Suspension

According to Article 66 of Decree 01/2021/ND-CP, the procedure for business suspension is carried out in the following 3 steps:

Step 1: Submit the Business Suspension Dossier

In the event that an enterprise, branch, representative office, or business location suspends business operations or resumes operations before the notified deadline, the enterprise must send a notification to the Business Registration Office where it was previously registered at least 03 days before the business suspension commences. This notification must include the following information:

• Name, head office address, enterprise code, and date of issuance of the Enterprise Registration Certificate;
• Business lines;
• Start date and end date of the suspension period;
• Reasons for business suspension.

In the event that an enterprise, branch, representative office, or business location wishes to continue its business suspension after the initial notified period expires, it must notify the Business Registration Office no later than 03 working days before the date of continued suspension. The duration of each notification of business suspension must not exceed one year.

In the case of an enterprise deciding to suspend business operations, the dossier must include a notification accompanied by the resolution, decision, and a copy of the meeting minutes of the Members’ Council for limited liability companies with two or more members, partnership companies, and the Board of Directors for joint-stock companies. 

For a single-member limited liability company, the business suspension notification needs to include the owner’s resolution or decision.

The business suspension dossier can be submitted through two forms:

• Direct submission at the Business Registration Office;
• Submission via the National Business Registration Portal at: www.dangkykinhdoanh.gov.vn.

Submitting a complete business suspension dossier helps the authorities understand the operational status of the enterprise and ensures that changes in information related to business activities are accurately updated in the business registration records.

Step 2: Processing of the Dossier by the Business Registration Office

After receiving the request for business suspension, the Business Registration Office will process the received enterprise dossier within 3 working days and issue the following results:

• Confirmation of Business Suspension if the dossier is valid: If the provided information is complete as prescribed and meets the requirements, the Business Registration Office will issue a confirmation of business suspension to the enterprise.
• Notification of Amendment or Supplementation of Documents if deemed invalid: If, during the processing of the dossier, the Business Registration Office discovers insufficient or inaccurate information or documents, the enterprise will receive a notification requesting amendments or supplements to ensure the dossier becomes valid and complete as prescribed.

Upon completion of the notification procedure, the enterprise will receive the processing results from the Business Registration Office via the chosen method, including receiving the Confirmation of Business Suspension (if the dossier is valid) or a notification requesting amendments or supplements if necessary (if the dossier does not meet the requirements). This ensures that the business suspension process proceeds smoothly and in compliance with the law.

Step 3: Official Commencement of Company Business Suspension

After the competent authority receives the business suspension notification, the enterprise will suspend operations from the time stated in the notification. All business activities after the suspension date must cease. The enterprise is permitted to resume operations after the suspension period expires or may request early resumption before the suspension period ends.

4. Procedure for Business Suspension with Tax Authorities

Business suspension with tax authorities must be carried out in strict accordance with the law. Here are 05 necessary steps to follow:

• Step 1: Prepare a Request for Business Suspension: The enterprise needs to prepare a request for business suspension and submit it to the local tax authority where the enterprise is registered.
• Step 2: Submit Relevant Documents: When submitting the business suspension request, the enterprise needs to submit relevant documents such as the business registration certificate, tax confirmations, financial statements, etc.
• Step 3: Await Processing by the Tax Authority: After receiving the business suspension request and relevant documents, the tax authority will process them within 10 working days. If the procedures are fully and correctly followed, the tax authority will issue a decision on business suspension.
• Step 4: Fulfill Tax Obligations: During the business suspension period, the enterprise still has to fulfill tax obligations for business activities carried out before the suspension.
• Step 5: Upon Resumption of Business Operations: The enterprise needs to submit a request for resumption of business operations and relevant documents to the tax authority for consideration and resolution.

Note: During the business suspension period with the tax authorities, the enterprise still has to fulfill its tax obligations and is responsible for any tax-related legal violations.

If an enterprise suspends business operations for a full calendar year (January 1st – December 31st) and incurs no additional tax obligations, it is not required to pay business license tax, declare, or submit tax reports and financial statements for that suspension period.

5. Can an Enterprise Conduct Business Before the Notified Suspension Period Ends?

Pursuant to Article 66 of Decree 01/2021/ND-CP, an enterprise is permitted to conduct business before the notified business suspension period ends, but it must send a notification to the Business Registration Office where the enterprise’s head office is located no later than 03 working days before the date of resuming business operations ahead of the notified deadline.

After receiving the enterprise registration dossier, the Business Registration Office issues a Receipt, examines the validity of the dossier, and issues a confirmation of the enterprise’s registration to resume business operations before the notified deadline within 03 working days from the date of receipt of a valid dossier.

Note: An enterprise can simultaneously request registration for resumption of business operations before the notified deadline for itself and for its branches, representative offices, and business locations.

The Business Registration Office updates the legal status of the enterprise concurrently with the status of its branches, representative offices, and business locations in the National Enterprise Registration Database.

Properly carrying out the business suspension procedure not only helps businesses ensure legal compliance but also supports the subsequent restart process. Hopefully, the detailed guidance in this article has helped you understand each necessary step and be fully prepared when undertaking this procedure. If you require further assistance or have any questions, please contact INTER JUSTICE for legal advice to ensure a smooth and timely process.