A foreign business entity or a foreign trader is allowed to establish Representative Office in Vietnam according to the Commercial Law.
Representative
office of a foreign business entity in Vietnam (referred as “Representative
Office”) means a subsidiary unit of the foreign business entity, established in
accordance with the law of Vietnam in order to survey markets and to undertake
a number of commercial enhancement activities permitted by the law of Vietnam.
Representative Office will need to apply and obtain the establishment
license; and have a seal bearing the name of the representative office.
Setting up a
Representative Office is less complicated than setting up a company in Vietnam. The
Vietnam Department of Trade will be approving the establishment of
Representative Office in Vietnam while Vietnam Ministry of Planning and
Investment will be the State agency that coordinate the setting up a company in
Vietnam. The time duration to establish a Representative Office is
shorter than to establish a company. There are fewer conditions to meet
than conditions in setting up company in Vietnam. The main difference
between a Representative Office and a company in Vietnam is that the
Representative Office could not directly conduct profit making activities.
Rights of the Representative Office:
- To operate
strictly in accordance with the purposes, scope and duration stated in the
license for establishment of such representative office;
- To rent
offices and to lease or purchase the equipment and facilities necessary
for the operation of the Representative Office;
- To recruit
Vietnamese and foreign employees to work for the Representative Office in
accordance with the law of Vietnam;
- To open
accounts in foreign currency and in Vietnamese Dong sourced from foreign
currency at banks which are licensed to operate in Vietnam, and to use
such accounts solely for the operation of the Representative Office.
Obligation of the Representative Office:
- Not to
directly conduct profit making activities in Vietnam;
- Not to enter
into commercial contracts of the foreign business entity or to amend or
supplement such contracts already signed except where the head of the
Representative Office has a valid power of attorney from the foreign
business entity;
- To pay
taxes, fees and charges and to discharge other financial obligations in
accordance with the law of Vietnam;
- To report on
the operation of the Representative Office in accordance with the law of
Vietnam
A foreign company
which has effectiveness business activities will be allowed to open the
Representative Office in Vietnam if this company has real demand to open the
market in Vietnam and meet conditions as below:
- Being a
business entity or trader recognized by the law of the country or the
territory (hereinafter referred to collectively as the country) where it
has been lawfully established or made its business registration;
- Having been
operating for at least one year after its lawful establishment or business
registration in its country.
The issuing period
will be within 20 working-days after the date of submitting the full valid
documents as requested.
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