Establish representative office in Vietnam

Procedure to establish representative office of foreign business organization in Vietnam is based on regulations written in Circular 11/2016/BCT, which gives details on Decree 07/2016/NĐ-CP (details on establishment of representative office or branches of foreigner traders of Law on Commerce 2005). With the aim of offering assistance to foreign traders, business organizations to have deep insight to establishment of representative office in Vietnam, Viet An Law Firm shall summarize all relevant requirements, dossier, procedure and legal service to establish representative office in Vietnam, especially for foreign traders.

Legal basis for establish representative office in Vietnam

• The Law on Commerce 2005;
• Decree 07/2016/ND-CP detailed regulations of establishment of representative offices or branches of foreign traders in Vietnam;
• Circular  11/2016/BCT on forms prescribed in Decree No. 07/2016/ND-CP dated January 25, 2016 of the Government on Guidelines for the Law on Commerce in terms off representative offices and branches off foreign traders in Vietnam;

Requirements of establishing representative office in Vietnam

Only when meeting all regulated requirements below, foreign traders shall be issued Establishment of Representative Office in Vietnam:

• The foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
• The foreign trader has come into operation for at least 01 year from the date of establishment or registration;
• The Enterprise Registration Certificate or the equivalent document is valid for at least 01 more year from the date of submission of the application;
• The scope of operation of the representative office includes promotion and market research for holding company, which is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatory;
• Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies (hereinafter referred to as “relevant Ministers”) have given approval for establishment of the representative office.

An application for License for Establishment of a representative office in Vietnam

• 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;
• A letter of appointment of the head of the representative office;
• Certified 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;
• Certified translation of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office;
• Documents on the expected location of the representative office including:
  • Certified copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the representative office;
  • Notarized copy of the Land Use Rights Certificate of the lessor (if renting from a business, it is necessary to provide a Business Registration Certificate with real estate business function);
  • In addition, the location of the representative office of a foreign company must comply with the provisions of Vietnamese law on security, order, labor safety and hygiene and other conditions as prescribed by law.

Documents need to be translated, notarized and certified or consuslar legalized by overseas diplomatic mission

• Documents required to be legalized by overseas diplomatic mission and translated, notarized: Certificate of Business registration.
• Documents required to be translated into Vietnamese and notarized:
  • Passport of the head of representative office;
  • Company Charter
  • Audited financial report or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year.

Notice: Documents, unless otherwise specified, must be translated into Vietnamese and certified in accordance with Vietnamese law. All documents for licensing the establishment of a representative office must be signed and stamped by the holding company.

Procedure to establish representative office in Vietnam for foreign traders

Stage 1: Granting License of Establishment of representative office

The processing time: within 07-10 working days

Stage 2: Engraving representative office’s seal with competent authority

The processing time: within 07-10 working days

Stage 3: Issuing and notifiying Representative offices’ tax code

The processing time: within 05-07 working days

Cases ineligible for Licenses for Establishment of representative offices in Vietnam

The licensing agency shall refuse to grant the License for Establishment of the representative offices or branches to those that:

• Foreign traders do not meet the above conditions.
• Foreign traders only trade in goods and services on the List of prohibited goods and services according to the provisions of Vietnamese law.
• Foreign traders request to be granted a License to establish a Representative Office of a foreign company in Vietnam within 02 years from the date of revocation of the License to establish a Representative Office.
• There is evidence that the establishment of a foreign company representative office harms national defense, security, social order and safety, historical traditions, culture, ethics, Vietnamese customs and traditions, and the health of the people, destroys resources, and damages the environment.
• Submitting invalid documents and not completing the documents as required by the competent licensing authority.

Notification obligation of foreign representative office

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:

• The name and address of the representative office or branch;
• The name or address of the head office of the foreign trader.
• Information on the head of the representative office or branch;
• The reference number, date of issue and effective period of the Licenses for Establishment of the branch or representative office and licensing agency.
• The scope of operation of the representative office or branch;
• Date of re-issue, adjustment, extension or revocation of the License for Establishment of the representative office or branch.

Noted procedure after establishing representative office in Vietnam

Reporting regime of foreign representative office in Vietnam

• By January 30th of each year, every representative office and branch shall submit operation status reports using the form stipulated by the Ministry of Industry and Trade to the licensing agency by post.
• Representative offices and branches shall submit reports, documents and explanations for their operation upon the request of competent state regulatory authorities.

Other process

• 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;
• Having documents recording all inflows and outflows during representative office’s operation;
• Application for work permit for foreign employees working in representative office (if any);
• Signing labor contract with the head of representative office and other employees;
• Issuing Witholding tax certificate to confirm income and salary of the head of representative office and other employees for the previous working year;
• Paying personal income tax for the head of representative office and other employees (if any). Notice, after paying tax, representative office should preserve all file of tax declaration, tax payment receipt and tax audit report on behalf of head and employees of representative office.
• Other current regulated obligations.

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

• License for establishment of representative office;
• Seal and Certificate seal mark;
• Notification of tax code of Representative office;
• The above files, invoices.

Frequently Asked Questions

What records does a representative office need to keep at the office during its operations?

During operation, the Representative Office must keep the following documents: Operating License; Seal, Seal sample certificate; Tax code notice for payment on behalf of the Representative Office; Records and documents as instructed in the procedure section after establishing a representative office.

Can a representative office of a foreign company in Vietnam sign economic contracts?

The scope of activities of the Representative Office is to research the market and promote trade in Vietnam. Therefore, the Representative Office of a foreign company in Vietnam is not allowed to sign and execute economic contracts.

Can a representative office of a foreign company collect money paid by customers to a foreign company?

The scope of activities of the Representative Office is to research the market and promote trade in Vietnam. Therefore, the Representative Office of a foreign company in Vietnam is not allowed to collect payments from customers to foreign companies.

Foreign companies do not have a seal, do the documents for establishing a representative office need to be consular legalized?

In addition to the Certificate of Registration of Foreign Company Operations, consular legalization is required according to regulations. The establishment documents signed and stamped by foreign companies do not need consular legalization.

Viet An Law Firm service for establishing representative office of foreign traders in Vietnam

• Consulting initiating woes relating to establishing representative office of foreign traders in Vietnam;
• Editing dossier for establishing representative office of foreign traders in Vietnam complied with clients’ requirement and regulations;
• Applying for License of Establishment of Representative office in Vietnam;
• Registering for issuing seal and Certificate of seal for representative office in Vietnam;
• Adjustment of License for establishment of representative office in Vietnam;
• Registering and fulfilling procedure of Notification of tax code for Representative office of foreign trade in Vietnam;
• Consulting about procedure after establishing Representative office of Foreign traders in Vietnam;
• Enumerating issues with respect to employees of representative office of foreign trader in Vietnam with Department of Industry and Trade, Social Insurance Agency;
• Consulting legal procedure, doing tax audit report on behalf of representative, for employees working in Vietnam.

Client interested in the procedures to establish representative office in Vietnam, please contact Viet An Law Firm  for the fastest and most accurate package support!