ESTABLISHMENT OF A REPRESENTATIVE OFFICES

Legal foundation

– Commercial Law 2006 (Trade Law 2006);

– Decree 07/2016 / ND-CP detailing the Trade Law on representative offices, branches of foreign businesses in Vietnam;

– Circular No. 11/2016 / TT-BCT guiding the implementation of the Government’s Decree 07/2016 / ND-CP, which details the Trade Law on representative offices, branches of foreign businesses in Vietnam.

Since 2018, procedures of establishing a representative office of a foreign business in Vietnam are conducted in accordance with the Circular No. 11/2016 / TT-BCT guiding the implementation of the Government’s Decree 07/2016 / ND-CP which details the Trade Law on representative offices, branches of foreign businesses in Vietnam.

Specific conditions for establishment of a representative office of a foreign trader in Vietnam:

  1. A foreign company is established and registered in accordance with the law of nations/territories which are parties to international treaties in which Vietnam is a member or recognized by the laws of these territories;
  2. A foreign company has been operating for at least 01 years in the host country since the establishment or registration;
  3. In cases where the business registration certificate or equivalent papers of the foreign company stipulate the operation duration, such time limit must be at least 01 year counting from the date of filing the dossier in Vietnam;
  4. The content of operation of representative offices and branches: market research and trade promotion in Vietnam;
  5. In case where the operation of the representative office is inconsistent with Vietnam’s commitments or foreign traders who do not belong to any nations and territories participating in the international treaties in which Vietnam is a member, the establishment of representative offices must be approved by the Minister of specialized management.

The dossier of application for a representative office establishment license in Vietnam includes:

  1. An application form for a representative office establishment license in Vietnam;
  2. A copy of the business registration certificate or equivalent paper of the foreign company, certified by a competent authority in which a foreign company was established;
  3. A letter of appointment of the head of the representative office in Vietnam;
  4. Copies of audited financial statements or documents certifying the performance of tax or financial obligations in the latest fiscal year or equivalent papers of competent agencies or organizations where the foreign company established issue or certify the existence and operation of the foreign company in the latest fiscal year;
  5. A copy of passport or identity card or citizen identification card (if a Vietnamese) or a copy of passport (if a foreigner) of the head of the representative office in Vietnam;
  6. Documents about the expected location of the representative office, including:

– An office lease agreement and a certificate of land use right of the lessor (in case the lessor is an enterprise, it is obligatory to have the business registration certificate with the function of real estate business);

– In addition, the location of a representative office of a foreign company need to be consistent with the provisions of the Vietnamese law on security, occupational safety and health conditions and others.

– Document need notarized translation and consular legalization: The business registration certificate

– Document need notarized translation into Vietnamese: the passport of the head of a representative office; charter’s company; audited financial statements or documents certifying the performance of tax or financial obligations in the latest fiscal year.

Notes: All dossier of application for a representative office establishment license will be signed and sealed by the parent company. In case the parent company at abroad does not have any seal, all dossier must be consular legalized.

Steps to establish a representative office of a foreign trader in Vietnam:

Step 1: Issue a license of establishment of a representative office

Step 2: Create a representative office’s seal

Step 3: Issue and notify a representative office s’ tax code.

Cases which are ineligible to issue a license of establishment of a representative office in Vietnam:

  1. Foreign traders who fail to satisfy one of above requirements for applications for licenses or establishment of representative offices.
  2. Foreign traders who trade goods and services on the list of goods and services banned from business as prescribed by law.
  3. Foreign traders who apply for the license of establishment of a representative office or a branch within 02 years from the date of revocation of the license or establishment of the representative office or branch.
  4. There is an evidence that the establishment of a representative office of a foreign company is detrimental to national defense, security, public order and safety, historical, cultural, and moral traditions, environment, etc.
  5. The dossier is not valid and fails to supplement as the requirements of competent authorities.

Notification of a foreign company’s representative office in Vietnam

Within 15 working days from the date of grant, re-grant, adjustment, extension and revocation of the license for establishment of a representative office or branch, the licensing agency shall publish the following information on its web portal:

  1. Name and address of the representative office or branch;
  2. Name or address of the head office of the foreign trader;
  3. Information on the head of the representative office or branch;
  4. The reference number, date of issue and effective period of the licenses for establishment of the branch or representative office and licensing agency;
  5. The content of operation of the representative office and branch;
  6. Date of re-issue, adjustment, extension or revocation of the license for establishment of the representative office or branch.

Reporting of a foreign trader’s representative office in Vietnam:

By January 30th of each year, every representative office and branch will submit operation status reports using the form stipulated by the Ministry of Industry and Trade to the Department of Industry and Trade by post.

Representative offices and branches will submit reports, documents and explanations for their operation upon the request of competent state regulatory authorities.

The procedure after establishing representative office in Vietnam:

– Open a bank account in foreign currency and an expenditure account in Vietnam dong which derives foreign currency at a licensed bank in Vietnam and only use this account for representative office’s operation;

– Annually, by January 30th of the next year, submit documents of report to the Department of Industry and Trade;

– Prepare documents to record all inflows and outflows during representative office’s operation;

– Apply for work permits for foreign workers working at the representative office (if any);

– Submit annual operation and get ratification report to Department of Industry and Trade;

– Sign labor contract with the head of representative office and other employees;

– Confirm income and salary of the head of representative office and other employees;

– Pay personal income tax for the head of the representative office and other employees (if any). Note that after paying tax, the representative office should save all file of tax declaration, tax payment receipt and tax audit report on behalf of the head and employees of representative office;

– Other current regulated obligations.

Legal documents need to be preserved during the representative office’s operations in Vietnam

– License for establishment of representative office;

– Seal and Certificate seal mark;

– Notification of tax code of Representative office;

– The above files, invoices.

The services Siglaw performs to establish a representative office of foreign traders in Vietnam:

– Advise on initial issues related to establishment of a representative office of foreign traders in Vietnam;

– Edit dossier for establishing a representative office of foreign traders in Vietnam complied with clients’ requirement and regulations;

– Apply for license of establishment of a representative office in Vietnam;

– Register for issuing seal and certificate of seal for a representative office in Vietnam;

– Register and fulfill procedures of notification of tax code for a representative office of foreign traders in Vietnam;

– Advise on procedure after establishing a representative office of foreign traders in Vietnam;

– Advise on issues with respect to employees of a representative office of foreign traders in Vietnam with the Department of Industry and Trade, Social Insurance Agency;

– Advise on legal procedure, making tax audit report on behalf of the representative, for employees working in Vietnam.

For further information about services related to establishment of a representative office of foreign traders in Vietnam, please get in touch with us through email siglaw.contact@gmail.com or dunglt@siglaw.vn, or our website www.siglaw.vn.