Will an Established but Non-Operating Company Be Penalized in Vietnam?

Short answer: Yes, it may be penalized. A company that has been established but does not operate or generate revenue must still fully perform its obligations: declare and file tax returns on time (file even with no activity); display its signboard; it may not “abandon” the company. Violations may result in administrative penalties on tax and enterprise registration; abandoning the business address or ceasing operations without notice may lead to revocation of the Enterprise Registration Certificate. If not yet ready to operate, the enterprise should carry out the business suspension procedure properly. Legal basis: the Law on Enterprises 2020 (as amended by Law No. 76/2025/QH15); the Law on Tax Administration 2025.

Legal basis

• The Law on Enterprises 2020, as amended and supplemented by Law No. 76/2025/QH15 — Article 8 (enterprise obligations), Article 206 (business suspension);
• The Law on Tax Administration 2025 (108/2025/QH15) — declaration and tax payment obligations;
• Decrees on administrative penalties in tax and invoicing; in the planning and investment field.

A company established but not operating: obligations to fulfill

• Tax declaration: must file VAT returns, invoice usage reports (if invoices have been issued), and annual financial statements on time — even with no revenue (file as “no activity”);
• Signboard: must display the signboard at the registered head office;
• Capital contribution: members and shareholders must still fully contribute capital within 90 days;
• Address: must maintain the head office address and ensure state authorities can contact it.

How non-compliance is handled

• Late/non-filing of tax returns: administrative penalties on tax (increasing with delay duration and frequency of violations);
• No signboard: administrative penalties;
• Abandoning the business address (tax authorities unable to contact): determined to have abandoned the address, tax code locked, no invoices may be issued;
• Ceasing operations for 01 year without notifying suspension: the Enterprise Registration Certificate may be revoked;
• Tax debts and late payment charges accumulate over time.

The proper solution: business suspension

If not yet ready to operate right after establishment, the enterprise should:

1. Carry out the notification of business suspension (each period not exceeding 01 year, multiple suspensions allowed);
2. Notify the Business Registration Office at least 03 working days before the suspension date;
3. During suspension, tax returns and reports must still be filed as prescribed — but with no activity, the obligations are minimal;
4. To resume operations: notify resumption of business.

Frequently asked questions

Does a company with no activity have to pay tax?

With no revenue, no VAT or CIT is payable; but tax returns must still be filed on time. Failure to file is still penalized.

Can I leave the company “dormant” without doing anything?

No. “Dormancy” without a suspension notice = violation of declaration and address-maintenance obligations — leading to penalties and possible revocation.

How to “remove” a non-operating company?

Carry out the dissolution procedure (if no longer needed) — all debts must be paid and tax obligations completed before filing for dissolution.

Notes on applying current regulations

Many people establish a company “to keep” awaiting opportunities, unaware that declaration obligations keep running quarterly — only to discover tax debts and a locked tax code when they need the company. Suspension should be properly filed from the outset. Contact an ANT Legal lawyer at 0966.475.966 for advice.

Common risks to note

• Not filing returns because of “no revenue”;
• No signboard, abandoned address — tax code locked;
• “Abandoning” the company instead of suspending/dissolving;
• Tax debts and late payment charges accumulating over years.

How ANT Legal can help

ANT Legal advises on suspension/dissolution options for non-operating companies; carries out the suspension notification procedure; reviews and handles outstanding tax obligations. For prompt advice, please contact a lawyer at 0966.475.966.

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