Set up branch office in Vietnam | ANT Consulting

 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.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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Which Form of Investment – Branch or Company? | ANT Lawyers

  Foreign entities can set-up company or branch offices in Vietnam to carry out business activities.

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.

1. Conditions

- Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.

- Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.

2. Certificate

- The Branch office needs to apply and obtain the operation license of a Branch;

- A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.

3. Capital

- Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.

- Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.

4. Obligation of owner

- For branch office in Vietnam, owner takes full responsibility;

- For company, owner takes responsibility within the capital contributed into the company in Vietnam;

5. Other matters

For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company; the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters. The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.

Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is a stand alone Vietnam entity recognized under Vietnam laws.

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