Consultancy on the dissolution and liquidation of investment projects in Vietnam

An investment project shall be terminated in the following cases:

  • The investor decides to terminate the operation of the project;
  • According to the conditions for termination of operation specified in the contract and the enterprise's charter,
  • The operation term of the investment project expires;
  • An investment project falls into one of the cases due to the partial or complete suspension of operation of the investment project in case the implementation of the project threatens to affect national security or because the state management agency in charge of investment decides to stop or partially stop the operation of the investment project but the investor is not capable of overcoming decommissioning conditions;
  • Investors whose land is confiscated by the state to implement investment projects may not continue to use investment locations and may not carry out procedures for adjustment of investment locations within 06 months from the date of issuance of the decision on land acquisition or may not continue to use investment locations;
  • The investment project has ceased operation, and within 12 months from the date of cessation of operation, the investment registration agency cannot contact the investor or the investor's legal representative;
  • After 12 months, the investor fails to implement or is unable to implement the project according to the schedule registered with the investment registration agency and this is not the case of being extended the implementation schedule of the investment project as prescribed;
  • According to judgments and decisions of Courts and Arbitrators.

Thus, the dissolution or liquidation of investment projects can be divided into 02 main groups:

  1. Dissolution or liquidation of investment projects for investment projects that do not establish legal entities (such as through contracts);

  2. Dissolution or liquidation of investment projects for investment projects associated with the establishment of legal entities.

In case (i), the procedure for liquidating an investment project is carried out according to the contract between the parties; therefore, the liquidation of the project is equivalent to the liquidation of the contract.

In case (ii), the dissolution or liquidation of the investment project will correspond to the dissolution or liquidation of the enterprise. The dissolution consists of the following steps:

  • Approving the decision to dissolve the enterprise;
  • Notify the business registration office, tax authority, employees in the enterprise, creditors, and persons with related interests and obligations;
  • Liquidation of assets and payment of debts of the enterprise;
  • Send a request for dissolution to the business registration authority after paying off all debts of the enterprise;
  • Remove the name of the enterprise from the National Business Registration Database and complete the dissolution of the enterprise.

In case of failure to pay due debts (i.e. falling into bankruptcy), the project may be terminated along with the enterprise bankruptcy procedures under the Bankruptcy Law.

Thus, to choose the best form of project liquidation for clients, LVT Lawyers provides the service as follows:

  • Consultancy on causes and reasons for project liquidation;
  • Cash flow consultancy is necessary for project liquidation - if the client has sufficient funds to finance the project liquidation, the enterprise liquidation solution is reasonable, on the contrary, bankruptcy proceedings can be considered;
  • Consultancy on project planning and liquidation processes following each specific case;
  • Consulting plans and contingencies if abnormal situations arise during the project liquidation process.
  • Advising on the prescribed procedures for project liquidation;
  • Drafting and reviewing relevant dossiers, documents, and documents for project liquidation;
  • Carry out necessary procedures to liquidate the project;