When ceasing business operations, the total cost of business dissolution is a primary concern for managers. According to legal regulations, administrative fees paid to the business registration authority are completely free. However, in reality, the total budget for completely closing a legal entity typically ranges from VND 1,500,000 to over VND 20,000,000. This amount varies depending on the complexity of the accounting system, the number of invoices issued, and any outstanding tax obligations of each entity.
Total cost of dissolving a business today
To help business owners proactively quantify the budget needed, the following breakdown of costs by actual operating conditions provides the most intuitive overview.
Summary of company closure costs based on a survey of the legal and accounting services market:
| Business operating status | Estimated company closure costs | Features and associated risks |
|---|---|---|
| Not yet active or no invoices have been generated. | 1,500,000 to 3,000,000 VND | Simple paperwork, quick settlement time, and no tax risks involved. |
| Operating, generating fewer than 20 invoices per year. | 3,000,000 to 7,000,000 VND | It is necessary to carefully compare the input and output invoices before submitting the application to deactivate the tax identification number. |
| Large revenue, complex accounting records spanning many years. | 7,000,000 to 20,000,000 VND | The cost depends on the volume of outstanding documents and the level of completeness of the financial statements. |
| There are outstanding business license tax, VAT tax, or late filing of tax returns. | Additional charges may apply depending on the actual amount of penalty debt. | It is mandatory to settle all tax obligations and pay administrative penalties before the legal entity can be delisted. |
The table above shows the basic cost structure that most businesses have to pay. To understand the structure of these expenses, business owners need to clearly distinguish between mandatory public administrative fees and actual operating expenses.
State fees when dissolving a business.
To facilitate a smooth exit of businesses from the market, direct fees payable to government agencies have been significantly reduced. Business owners can confidently submit applications without the burden of high administrative fees.
According to the regulations at Circular No. 47/2019/TT-BTC According to the Ministry of Finance, the following fees are applied:
- The fee for submitting a business dissolution application at the Business Registration Office under the Department of Planning and Investment is 0 VND (applicable to both in-person and online submissions).
- Fees for publishing dissolution information above National portal for business registrationCompletely free.
- Fees for receiving and processing online applications through the national public service system: No other administrative fees will be incurred.
This regulation applies uniformly to all types of companies, from limited liability companies to joint-stock companies, provided that the documentation is prepared in accordance with legal standards.
Actual costs incurred when closing a company.
Although the state fee is 0 VND, businesses still have to pay actual fees to third parties and tax obligations to complete the procedure of removing their names from the national management system.
Package service fees for business dissolution, categorized by business type.
For small companies that haven't actually started operations or have never issued invoices, business owners often seek out low-cost company dissolution services to minimize costs. These fees range from VND 1,500,000 to VND 3,000,000, including document preparation, submission to the Department of Planning and Investment, and delivery of the company name removal results within 15 to 25 working days.
Conversely, for businesses that have been operating for a long time and generate significant revenue, the fee for full-service company dissolution The cost typically ranges from 7,000,000 VND to over 20,000,000 VND. This expense reflects the workload of professional specialists in checking documents, completing financial reports over several years, and directly explaining matters to the tax authorities.
Fees for closing a bank account and processing a seal.
- The fee for closing a company's payment account at a commercial bank: This usually ranges from VND 200,000 to VND 500,000. This is a mandatory fee to settle any negative balance arising from the bank's periodic account management fees.
- Costs for processing company seals: For seals engraved and issued by the Police before July 1, 2015, businesses must return the seal along with the seal registration certificate, incurring an authorized service fee of approximately VND 200,000 to VND 500,000. Companies established after this date have the right to self-destruct their seals, thus avoiding this fee.
Tax settlement costs for dissolution and late payment penalties.
This is the largest and most difficult expense to control in the entire company closure process. Before submitting the application to the Department of Planning and Investment, businesses are required to complete the tax code deactivation process at the directly managing tax office.
The tax authorities will conduct an audit and tax settlement for the dissolution based on the entire tax filing history. If errors are found in input documents, underreporting of output revenue, late submission of financial statements or periodic tax returns, the business will have to pay the full amount of back taxes plus late payment penalties before its tax identification number can be closed.
Factors that increase the cost of dissolving a business
The majority of the enormous costs that drive up the total dissolution budget do not come from legal service fees, but rather from internal management errors within the company:
- Loss of original VAT invoices and supporting documents: The loss of purchase invoices allows tax authorities to disallow legitimate expenses during audits, leading to businesses being subject to very high levels of back taxes on corporate income.
- Delays in providing data explanations: Businesses that fail to respond promptly to requests for explanations from the tax authorities will prolong the inspection process, incur unexpected operational personnel costs, and increase the risk of penalties for not providing documents on time.
- Leaving outstanding business license tax debts unresolved: Many companies mistakenly believe that they don't need to pay business license tax when temporarily suspending operations. The accumulated debt over many years, along with late payment penalties and interest, becomes a mandatory financial burden that must be settled before closing their tax registration.
Should you dissolve your business yourself or hire a service?
Whether to handle it in-house or delegate it to a third party depends entirely on the risk level of the case and the availability of qualified personnel within the company.
To make the best decision between preparing the application in-house or completely delegating to external agencies, business owners can consider practical criteria based on the comparison table below:
| Comparison criteria | Carry out the dissolution procedure yourself. | Utilize a comprehensive dissolution service. |
|---|---|---|
| Suitable for all target groups | Newly established micro-enterprises that have not yet generated any input or output invoices. | The business has been operating for many years, has complex accounting records, and generates invoices continuously. |
| Tax risk level | High fines can easily result from a lack of understanding of accounting regulations and tax settlement terms. | Low costs, pre-audited and standardized accounting records minimize the risk of penalties and tax arrears. |
| Time and effort | It took a lot of time to do my own research and revise the application multiple times based on feedback from the authorities. | Fast, on schedule, and without the need for time-consuming travel or direct interaction with tax authorities. |
| Optimal cost | Saving on initial service fees may come at the cost of additional charges, but unexpected administrative fines may apply. | The service costs are clearly fixed from the outset, minimizing potential financial risks later on. |
When should a business carry out its own dissolution?
Self-dissolution is the most suitable and cost-effective option for micro-sized, newly established companies with blank accounting systems, no invoices issued, and no bank accounts. If the business owner has time to study the administrative documents, submitting the application online through the public service portal is the optimal choice to save on company closure costs.
In cases where it is absolutely necessary, businesses should hire a full-service dissolution company.
For companies that have been operating for over two years, have actual revenue, and issue more than 50 invoices per year, handling the paperwork themselves carries significant risks. In this case, businesses should use professional external services to ensure legal safety.
Hiring consulting firms with deep expertise such as MAN – Master Accountant Network This will help businesses receive comprehensive accounting record reviews before tax settlement. Experts will help identify accounting risks, complete documentation, and directly represent the business in explaining matters to the tax authorities, thereby minimizing unnecessary tax penalties and shortening the time it takes to close the tax identification number.
Legally compliant online business dissolution process
The online company closure process must strictly adhere to a four-step core sequence to minimize rejection of applications and travel expenses:
- Step 1: The business formally approves the dissolution decision through minutes of the meeting of the Board of Members, owner, or General Meeting of Shareholders in accordance with the Enterprise Law.
- Step 2: Submit the application to close the tax identification number at the tax office directly managing and coordinating the process. tax settlement for dissolution To receive notification that tax obligations have been fulfilled. This is the most important step and can easily lead to penalty fees if accounting records are flawed.
- Step 3: Publish a public notice of company dissolution on the National Business Registration Portal to definitively settle all financial obligations with partners, creditors, and employees.
- Step 4: After receiving notification of tax code closure from the tax authority, the business submits the official dissolution application online to the Business Registration Department under the Department of Planning and Investment to receive the result of removing the legal entity's name from the business registration book.
Proper accounting for business dissolution costs according to accounting standards.
During the decommissioning process, accountants must still fully record all financial transactions arising from the liquidation of assets and legal service fees.
- Actual expenses for the sale of fixed assets, tools and equipment, or fees for external dissolution services are accounted for directly in the other expenses account (Account 811).
- The proceeds from the sale of a business's assets before its closure are recorded in the other income account (Account 711).
This recording process helps ensure that the company's accounting system remains clear and transparent before the permanent closing of the accounting books and the finalization of the tax identification number.
Frequently Asked Questions about Company Closure Procedures
How long does it take to completely dissolve a company?
Are the procedures for dissolving a limited liability company and a joint-stock company different in terms of cost?
Will I be penalized for forgetting to notify the authorities about the cancellation of unused invoices when my company is dissolved?
Conclude
In reality, the most expensive part of dissolving a business is not the government fees, but rather the handling of outstanding tax obligations and accounting records. The earlier a business standardizes its financial data, the lower the actual dissolution costs, the faster the processing time, and the more the legal representative avoids future legal risks.
Contact information for Man – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- E-mail: man@man.net.vn
Content is moderated by: Mr. Le Hoang Tuyen – Founder & CEO of Man, CPA Vietnam Auditors With over 30 years of experience in accounting, auditing, and financial consulting.
