Set up a branch of a foreign capital company in Vietnam

Foreign capital companies wishing to expand production and business activities may carry out procedures for establishing company branches in the locality where the enterprise is headquartered or other localities in accordance with the Law on Enterprises. Viet An Law would like to give some legal opinions on the dossier of establishment of a branch of a foreign capital company as follows:

Legal bases

• Law on Enterprise 2020
• Decree 01/ND-CP dated January 04^th 2021
• Circular 01/2021/TT-BKHDT dated March 16^th 2021

The concept of a foreign capital company branch in Vietnam

According to the provisions of Article 44 of the Law on Enterprises, “A branch is a dependent unit of an enterprise, tasked with performing all or part of the functions of the enterprise, including the function of authorized representative. The branch’s line of business must be consistent with the business line of the enterprise.”

Company has the right to set up branch at hometown and abroad. Company can set up one or more branches in a locality according to the boundaries of administrative units.

How to name a branch of a foreign capital company in Vietnam

In principle, a branch is only a dependent unit of the company, so the name of the branch must always be accompanied by the name of the company and ensure the following regulations:

• The branch name must be written with letters of the  Vietnamese alphabet, letters F, J, Z, W, numbers and symbols.
• The branch name must include the business name accompanied by the phrase “Branch”.
• The branch name must be written or affixed at the branch office. The branch name is printed or written in a smaller font size than the Vietnamese name of the enterprise on transaction papers, documents and publications issued by the branch.

Dossier to set up of a branch of a foreign capital company in Vietnam

The enterprise submits the application for branch operation registration at the Business Registration Office where the branch is located. The dossier includes the following documents:

• The notice of establishment of a branch shall be signed by the legal representative of the enterprise;
• A copy of resolutions, decisions and minutes of meetings of the Members’ Council for limited liability company with two or more members, partnerships, of the Board of Directors, for joint-stock company; a copy of the resolution or decision of the company owner for a one-member limited liability company on the establishment of a branch;
• Copies of legal papers of the individual for the head of the branch;
• Power of Attorney for Viet An Law to carry out the procedure on behalf of the procedure.

Within 03 working days from the date of receipt of a valid dossier, the Business Registration Office shall issue a Certificate of branch operation registration.

Some questions related to the dossier to set up a branch of a foreign capital company in Vietnam

Can a company set up multiple branches on the same locality?

The Enterprise Law 2020 does not have regulations limiting the number of branches. Therefore, businesses can set up multiple branches in the same locality.

Can a legal representative be the Head of a branch at the same time?

In the prohibitions of the Enterprise Law 2020, there is no provision prohibiting a person from being both a legal representative and the head of a branch. Therefore, the Legal Representative can concurrently act as the Head of the Branch.

Can the company do business in industries and trades that the company has not registered?

According to the provisions of the Enterprise Law, a branch is a dependent unit of an enterprise, tasked with performing all or part of the functions of the enterprise, including the function of authorized representative. The branch’s line of business must be consistent with the business line of the enterprise.

Consulting services on setting up of branch of foreign capital company of Viet An Law Firm

• Advising on conditions and procedures for establishing branches of foreign capital company;
• Drafting dossiers, representing customers to submit dossiers at competent state agencies;
• Receiving results and send them back to customers;
• Advising on legal issues arising from applying for the Certificate of eligibility for operation, sublicenses of branches of foreign capital company;