Temporary Business Suspension vs. Dissolution: Which to Choose

When business slows down, owners often face two choices: temporarily suspend the business to keep the company in reserve until a better time, or dissolve it to close for good. These two procedures differ in nature, conditions and accompanying obligations.

Short answer: if there is still a plan to resume operations within two years, consider suspension; if there is no such plan and all debts can be paid, choose dissolution. Before deciding, check the legal status, tax code and any outstanding obligations.

What is the difference between temporary suspension and dissolution?

Temporary business suspension means the enterprise continues to exist but simply stops operating for a notified period. Dissolution is the procedure under which an enterprise ceases to exist under the 2020 Law on Enterprises.

Basis for fee exemption: Clause 2, Article 5 of Circular No. 47/2019/TT-BTC.

When should you choose temporary suspension?

Suspension is appropriate when the enterprise has a clear reason to return. Common situations include:

• Waiting for a project, order or new licence, expected within two years.
• The owner is temporarily away and needs time to reorganize staff or the business model.
• The enterprise wants to keep its name, enterprise code and operating history for a later plan.

One point to consider in advance: suspension does not erase existing obligations. During the suspension period, the enterprise must still pay in full any outstanding tax, social insurance, health insurance and unemployment insurance, and keep paying its debts, unless otherwise agreed with creditors, customers or employees (Clause 3, Article 206 of the 2020 Law on Enterprises).

When should you choose dissolution?

Dissolution is appropriate when the owner has decided not to continue and the enterprise can pay off all its debts. For example:

• A project has ended and there is no further business plan.
• Investors or owners want to reduce the number of legal entities they manage.
• The enterprise has nearly reached the 24-month suspension limit with still no plan to resume.

Dissolving while records are still in order is generally smoother than delaying, since more recent accounting records make tax finalization clearer. See the timeline in How Long Does Company Dissolution Take?.

If assets are insufficient to pay all debts, the enterprise does not yet meet the dissolution condition in Clause 2, Article 207. That case should be considered under a different path — see What Is the Difference Between Dissolution and Bankruptcy?.

Rules on temporary business suspension from 23 July 2026

Decree No. 296/2026/NĐ-CP amends Decree No. 168/2025/NĐ-CP on business registration, effective from 23 July 2026. Enterprises currently suspended or planning to suspend should note the following:

12 months per period, 24 months total consecutive

Each suspension notice must not exceed 12 months. The total consecutive suspension period must not exceed 24 months (Clause 1, Article 60 of Decree No. 168/2025/NĐ-CP, as amended by Clause 1, Article 11 of Decree No. 296/2026/NĐ-CP). The dossier is sent to the provincial business registration authority no later than 3 working days before the suspension date or the date of continued suspension.

Enterprises already suspended before 23 July 2026 have that earlier period counted into the total. If the total time already exceeds 24 months by the end of the most recent suspension period, the enterprise may not register a further suspension (Clause 1, Article 21 of Decree No. 296/2026/NĐ-CP).

Confirming resumption when the period ends

For an enterprise that notified suspension from 23 July 2026, within 5 working days from the end of the suspension period, the legal representative must confirm the resumption of business on the National Business Registration Information System (Clause 8, Article 60 of Decree No. 168/2025/NĐ-CP, added by Clause 3, Article 11 of Decree No. 296/2026/NĐ-CP).

If this confirmation is not made, the business registration authority sends a written request for a report. An enterprise that does not submit the report within 6 months from the reporting deadline may have its Enterprise Registration Certificate revoked and must then dissolve. A simple way to manage this: mark the suspension end date on the calendar and prepare in advance a decision to either resume or dissolve.

Registration information must still be updated during suspension

During the suspension period, if there are changes to registered information (legal representative, head office address, members, etc.), the enterprise must still register or notify the change (Clause 7, Article 60, added by Clause 3, Article 11 of Decree No. 296/2026/NĐ-CP).

Tax obligations during suspension

Under Point c, Clause 1, Article 7 of Decree No. 252/2026/NĐ-CP:

• The enterprise does not need to file tax returns during the suspension period. Exception: if the suspension does not cover a full calendar month, quarter, year or fiscal year, the tax return for that period and the annual finalization dossier must still be filed.
• The enterprise may not use invoices, unless approved by the tax authority, in which case it must declare tax as required.
• The enterprise must still comply with notices and decisions of the tax authority regarding debt collection, enforcement and inspection.

For enterprises registered under the inter-agency mechanism, the suspension notice is filed with the business registration authority; the information is then forwarded to the tax authority. The business license tax stopped being collected from 1 January 2026 (Clause 7, Article 10 of Resolution No. 198/2025/QH15), so this is no longer a reason to choose suspension as it once was.

What happens if no procedure is carried out at all?

Some enterprises stop operating without notifying suspension and without dissolving. This approach usually makes matters take longer down the line:

• An enterprise that has ceased operations for one year without notifying the business registration authority and the tax authority falls under a case of revocation of the Enterprise Registration Certificate (Point c, Clause 1, Article 212 of the 2020 Law on Enterprises).
• After revocation, the enterprise must still carry out dissolution procedures under Article 209, with the 10-day deadline to convene a meeting.
• Tax obligations, late-payment interest and outstanding insurance do not simply disappear.

There is still a way forward. An enterprise in this situation should first check its tax code status and legal status, then choose: restore to resume operations, suspend properly, or dissolve. See also Dissolution After Revocation of the Enterprise Registration Certificate.

Four questions to help choose the right direction

1. Does the enterprise plan to resume operations within the next 24 months? Yes → consider suspension. No → consider dissolution.
2. Are assets sufficient to pay all debts, including wages, insurance and taxes? Sufficient → dissolution is possible. Insufficient → another direction needs to be assessed first.
3. What status is the tax code currently in? If the tax authority has already determined the enterprise is not operating at its registered address, this must be resolved with the tax authority first.
4. How long has the enterprise already been suspended? If close to the 24-month limit, a decision between resuming and dissolving should be made soon.

These four questions are for self-assessment only and do not replace a review of the specific dossier.

What Thái Tín supports while you are deciding

Thái Tín is the coordinating point that helps an enterprise choose a direction and proceed in the right order:

• A preliminary check of legal status, tax code, time already suspended and outstanding obligations.
• Explaining the two options using the enterprise’s own figures, so the owner can decide.
• Assisting with the suspension dossier or the dissolution dossier under current regulations; connecting accounting and tax partners for tax declarations and finalization.
• Tracking the suspension deadline and reporting progress.

For large enterprises, those with many employees, or foreign-invested enterprises, Thái Tín also coordinates the labor dossier and social insurance. State authorities review and decide on the dossier.

Preparing before deciding

• Enterprise Registration Certificate, Charter, and legal representative’s information.
• Tax reports and financial statements for the most recent periods; invoice status.
• List of employees, contracts still in effect, and payables.
• Timeline of any prior suspension, to calculate the 24-month limit.

If choosing dissolution, costs include the service fee, third-party fees and the enterprise’s outstanding obligations — see What Does the Cost of Company Dissolution Include?.

Questions and answers

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Dissolution How Long Does Company Dissolution Take? Statutory Milestones Dissolution What Does the Cost of Company Dissolution Include? Dissolution Dissolution After Revoking the Enterprise Registration Certificate