Procedures for temporary suspension of business locations, branches, and representative offices

In the business activities of branches, business locations or representative offices, there are situations that arise that cause companies to temporarily stop operations for a certain period of time to prepare for a return. So to temporarily stop the operations of branches, representative offices, business locations, what procedures do businesses need to do as well as what are the notes that they need to check and consider before temporarily stopping operations? Let’s find out in the article below.

What is temporary suspension of business location, branch, representative office?

Suspension of operations of a branch, representative office, or business location means not carrying out business activities of the branch or business location as well as not operating the representative office for a certain period of time as permitted by law.

How long is the business suspension period?

1. Branches, representative offices, and business locations of enterprises may only temporarily suspend operations for no more than 01 year.
2. If the suspension of business continues after the expiration of the notice of temporary suspension, the branch, representative office, or business location must notify the Business Registration Office to extend the suspension for a maximum of 01 more years. Therefore, the total consecutive period of temporary closure of branches, representative offices, or business locations must not exceed two years.
3. If after 2 years, the company still does not continue operations, it can be handled in 2 ways:

• Dissolution
• Or carry out procedures to restore business operations for a short period of about 1 to 2 months, then carry out procedures to temporarily suspend business operations and wait for an opportunity to resume operations.

Conditions for temporary suspension of operations of branches, representative offices and business locations

• There is a valid reason for the temporary suspension of operations.
• There are sufficient documents to temporarily suspend the branch’s operations according to the law.

Procedures to temporarily suspend operations of business locations, branches, and representative offices

Step 1: Prepare documents to notify temporary suspension of operations

In general, the temporary suspension of branches, representative offices, and business locations of enterprises requires the preparation of the following documents, and depending on the type of company, whether it is a limited liability company or a joint stock company, etc., the type of documents that need to be added or removed will be different:

• 01 copy of Notice of temporary suspension of business (according to the form in Appendix III-4 issued with Circular 02/2023/TT-BKHĐT). Regarding the content of the notice, it is necessary to ensure the following items: name/tax code/enterprise registration number/business line of the branch, representative office, business location that is carrying out temporary suspension procedures; period of temporary suspension of business; reason for suspension; legal representative of the enterprise signs and stamps full name.
• 01 copy of the resolution, decision and copy of the minutes of the meeting of the Board of Members on the temporary suspension of operations (for LLCs with 02 or more members and Partnerships)
• 01 copy of the resolution, decision and copy of the minutes of the meeting of the Board of Directors on the temporary suspension of operations (for Joint Stock Companies)
• 01 copy of the resolution, decision of the company owner on the temporary suspension of operations (for LLCs with 01 member)
• 01 Power of Attorney for Siglaw Law Firm (if you do not submit the application yourself, but need to authorize Siglaw to do the procedure)
• 01 notarized copy of the personal documents (ID card/passport) of the authorized person.

Step 2: Submit application for temporary suspension of operations

• Submission methods: directly or submit online at https://dangkyquamang.dkkd.gov.vn/
• Submission address: Business Registration Office – Department of Planning and Investment.

Step 3: Receive results

After receiving the enterprise’s documents, the receiving authority will give a receipt to the applicant. Within 03 working days from the date of receiving valid documents, the agency will issue a certificate of confirmation of the branch’s registration for temporary suspension of operations.

Notes when temporarily suspending operations of branches, representative offices, and business locations

Requirements for tax settlement during suspension of operations

During the suspension period, the branch, representative office or business office must continue to pay business license tax as well as prepare financial reports for the months in the year before the suspension.

At the same time, the company must pay all outstanding taxes, continue to pay debts and perform contracts signed with customers and employees. Unless otherwise agreed between the company, creditors, customers and employees.

Requirements on the obligations of enterprises during the period of temporary suspension of operations

Obligations to Partners and Customers

The company must continue to pay debts and perform contracts signed with customers and employees. Unless otherwise agreed between the company, creditors, customers and employees.

Obligations to tax authorities

According to Article 4 of Decree No. 91/2014/ND-CP (Amending and supplementing Decree No. 83/2013/ND-CP dated July 22, 2013 of the Government detailing the implementation of a number of articles of the Law on Tax Administration and the Law amending and supplementing a number of articles of the Law on Tax Administration), enterprises during the period of temporary suspension of business operations still need to perform the following obligations to tax authorities:

• Submit tax declaration dossiers according to regulations after resuming operations
• If a branch or business location temporarily suspends its business operations not within the same calendar year or fiscal year, it must submit annual tax settlement dossiers for the previous period of operation in the year.

Return to operations before the suspension period ends

In case the company wants to resume operations before the suspension period ends, the company must submit an application for resumption of operations to the Department of Planning and Investment, at least 15 days before resuming operations. The relevant documents to be submitted include:

• 01 Notice of continuing business before the previously announced deadline.
• 01 Written request to supplement or update business registration information of the branch/representative office/business location of the company operating under the investment license or investment certificate.
• 01 Power of attorney (if there is no legal representative of the company can submit the documents directly)
• 01 Certified copy of valid identification document of the authorized person to carry out the procedure (ID card/passport)

Penalties for failure to notify temporary suspension of operations of branches, representative offices, and business locations

Pursuant to Point a, Clause 2, Article 32 of Decree No. 50/2016/ND-CP, branches, representative offices, and business locations that have registered to temporarily suspend operations but do not notify of the temporary suspension will be fined from VND 2 million to VND 3 million.

The remedy is that companies are obliged to notify the provincial business registration office of certain contents as prescribed by law. Not only that, in many cases, representative offices, branches, or business locations may have their business licenses revoked.

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.

Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.

Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City

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