Guidance of Representative Office Setting-up in Vietnam | ANT Lawyers

 The establishment of representative office of foreign traders in Vietnam have to follow the procedures as guided by the Commercial Law in Vietnam and the related decrees providing instructions of the law.

Preparation of dossiers for establishment of representative offices includes:

An application form for License for Establishment of the representative office using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.

Copies of the Certificate of Business Registration or equivalent documents of the foreign trader (shall be certified or legalized by overseas diplomatic missions or Consulates of Vietnam under laws of Vietnam);

A letter of appointment of the head of the representative office (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam);

Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam);

Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam.);

Documents on the expected location of the representative office including:

Copies of memorandum of understanding or leasing agreements or documents as proof of the right to use a location as the representative office;

Copies of documents on the expected location of the representative office.

Procedures for granting of Licenses for Establishment of representative offices:

Foreign traders submit applications directly or via post or online (if applicable) to the Department of Industry and Trade of the locality where the representative office is to be located.

Within 03 working days from the date of receipt of the dossier, the Department of Industry and Trade shall examine and request the supplement if the dossier is incomplete and invalid. Requests for additional records are made at most once during the processing of applications.

Except for the establishment of a representative office have to submit for directions of the relevant Ministry of Industry, within 07 working days from the date of receipt of a complete and valid application the Department of Industry and Trade shall grant or refuse to grant a license for establish a representative office for foreign trader. In case of refusal, the reasons must be clearly stated in writing.

Where the establishment of a Representative Office is subject to the approval of the relevant Minister or the Head of the ministerial level agency and the establishment of a Representative Office not yet stipulated in the normative document. The Department of Industry and Trade shall send a written request for directions to the specialized management ministry within 03 working days from the date of receipt of a complete and valid dossier. Within 05 working days from the date of receipt of the written request for the directions of the Department of Industry and Trade, the specialized management ministry shall issue a written statement stating its consent or refusal to grant a license for the establishment of the representative office. Within 5 working days after receiving the opinions of the specialized managing ministries, the provincial / municipal Industry and Trade Services shall grant or refuse to grant permits for the establishment of representative offices to foreign traders. In case of non-licensing, the reasons therefor must be clearly stated in writing.

In addition, for certain special cases managed by the specialized management ministry, the licensing of representative offices is carried out in accordance with the specific regulations.

Our lawyers in Vietnam constantly follow up with changes of law to provide the client with update for better decision making process.

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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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How Foreign Entity Could Set-up a Branch Office in Vietnam | ANT Lawyers

A foreign business entity or a foreign trader is allowed to set-up a branch in Vietnam to conduct business activities.

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam. A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself. The Vietnam Department of Industry and Trade will be approving the establishment of a branch in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to 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 licence 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.

1. Rights of the Branch

To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.

To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.

To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.

To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.

To remit profits abroad in accordance with the law of Vietnam.

To have a seal bearing the name of the branch in accordance with the law of Vietnam.

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.

2. Requested conditions for establishment the Branch in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Branch in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;

Having been operating for at least five years after its lawful establishment or business registration.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department after the foreign company meets all of conditions as Vietnam legal requirements.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

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