What Are Tax Obligations of a Representative Office in Vietnam? | ANT Lawyers

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise. As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

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KMH Group - Korea Proposed to Invest in Developing High-Tech Industrial Cluster in Thua Thien Hue | ANT Consulting

Chairman of Thua Thien Hue Provincial People’s Committee has just had a meeting with Chairman of the Board of Directors of KMH Group – Korea, seeking opportunities to invest in Vietnam and exchanging information to expand investment projects in tourism, relaxation and high-tech industry in Thua Thien Hue.

At the meeting, according to Chairman of the Board of Directors of KMH, the implementation of investment projects of resorts and golf courses associated with entertainment services in Chan May – Lang Co Economic Zone with the total investment capital of 100 million USD of the Group is on schedule. KMH Group is looking forward to expanding investment cooperation in this area in some coastal areas of the province, at the same time linking with major Korean corporations to invest in developing high-tech industrial clusters in Thua Thien Hue province.

Also at the meeting, representative of KMH proposed: “The KMH wants the provincial leaders to pay attention and create conditions for the Group to study and implement some investment projects in the province in the shortest time”.

In response to the investor’s proposal, Chairman of the Provincial People’s Committee welcomed KMH Group to invest in Thua Thien Hue, especially in the potential areas of the provinces with policies to attract investment such as tourism, trade, high-tech industry.

Chairman of the Provincial People’s Committee also affirmed: “Thua Thien Hue province is ready to support KMH Group to research and expand investment, especially to create conditions for KMH Group to cooperate with its partners in establishing Korean high technology parks in Hue”.

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Set-up Branch Office in Vietnam

Foreign entity is allowed to set up branch office in Vietnam to conduct business activities according to the law.
The branch of a foreign business entity in Vietnam (referred as “The Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

The Branch is permitted to conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

It should be noted that the liability of the Branch is the liability of the foreign entity.  The business activity of the Branch has to be consistent with the business activity of the foreign entity. The Branch has to has office address.

Therefore the investor should consider its investment strategy when setting up its Branch in Vietnam.

Readmore : http://www.antconsult.vn/services/set-up-branch-office-in-vietnam.html 

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