Headquarters profile to establish FDI company in Vietnam

With a rapidly growing economy and a favorable FDI investment environment, establishing a foreign-invested company in Vietnam is an attractive option for international businesses. Thus, what conditions must businesses meet to establish a headquarters in Vietnam? In the following article, Viet An Law will provide instructions for headquarters profile to establish FDI company in Vietnam following legal regulations.

What is the headquarters of a company?

According to Article 42 of the Law on Enterprises 2020, the definition of Company Headquarters is defined as the head office of an enterprise located in the territory of Vietnam, is the contact address of the enterprise, and is determined according to the administrative unit’s boundaries; has a telephone number, fax number, and email (if any).

When establishing a business, the head office address of the business must be registered with the Business Registration Office – Department of Planning and Investment where the head office is located. A business can have many business establishments but is only allowed to register 1 head office for transactions.

Documents proving legal right to use company headquarters

Enterprises need to prove legal rights to use the proposed head office address, specifically:

• In case the house, land use rights, or factory are purchased or built by the company itself, there must be a certificate of land use rights, house ownership rights, or a land lease contract from the infrastructure company, a land lease decision from a state agency, or one of the documents proving ownership rights according to the land law.
• In case the house, land use rights, and factory are rented by the company, there must be a lease contract and documents proving the legal right to lease of the lessor: Residential land must be legally owned by the lessor. Project land and factory must be legally owned by the lessee and have the function of subleasing, Business license with the function of leasing real estate, and license related to real estate business recording the right to lease of the lessor.

Conditions for setting up FDI company headquarters

FDI enterprises when establishing headquarters must meet the following conditions:

Specify specific information about the head office address

According to Article 42 of the Enterprise Law 2020, which stipulates the head office of an enterprise, the head office address of an enterprise must be clearly and specifically identified, including house number, alley, lane, street, road or village, hamlet, commune, ward, town, district, county, town, provincial city, province, centrally run city; telephone number, fax number and email (if any).

However, if the head office does not have a house number or street name, please confirm with the local authority that the address does not have a house number or street name and submit it with the business registration application.

In addition, businesses need to choose a stable, long-term headquarters to avoid having to change or adjust information about business registration and invoices.

Do not locate business headquarters in apartment buildings intended for residential purposes

The Housing Law defines apartment buildings into two types: apartment buildings built for residential purposes and apartment buildings built for mixed residential and business purposes, and strictly prohibits the use of apartment buildings for non-residential purposes.

Thus, FDI enterprises that need to use apartment buildings for business, office, service, or trade need to determine whether the apartment building has mixed-use purposes for residence and business or not. If it does not have the above purpose, it cannot be used as the enterprise’s headquarters.

Regulations on hanging signs at company headquarters

A signboard display is a mandatory requirement for businesses. The business signboard must be displayed at the main gate or front of the premises, and must contain the following information:

• Name of direct governing body (if any);
• Business name as per enterprise registration certificate;
• Address, phone number.

According to Clause 2, Article 52 of Decree 122/2021/ND-CP, enterprises that do not display their business name at their headquarters will be fined from VND 30,000,000 to VND 50,000,000 and forced to display their business name at their headquarters.

Head office address suitable for specific business lines

In addition to the above regulations, some specific business lines will also have to comply with additional requirements for head office location when registering a business, for example:

• For industry groups: production, processing, farming…

In case the head office carries out production, processing, and farming of agricultural/aquatic products… it is necessary to locate the head office in neighboring areas, far from residential areas, far from the city center.

In case the enterprise wants to set up its headquarters in the city center, it is only allowed to trade, exchange, and display products.

• For the hotel service industry:

Reception desk; shared restroom; parking space; minimum requirement of 10 bedrooms; shared living items such as beds, mattresses, towels, pillows, etc.

Resort hotels, floating hotels, and roadside hotels need to have kitchens, dining rooms, and food services…

Notes on FDI company headquarters

FDI enterprises wishing to have the right to use the land to build headquarters in Vietnam must carry out the following procedures according to the provisions of the Land Law:

• Request the State to lease land;
• Land lease, sublease of land from individuals, economic organizations with Vietnamese nationality or Vietnamese people residing abroad;
• Subleasing land associated with the infrastructure of Vietnamese enterprises or foreign-invested enterprises (Commercial and service land; non-agricultural production land).
• Receiving the transfer of investment capital is the value of land use rights of enterprises using land with the origin of land allocated by the State with land use fees collected, land lease with lump-sum payment for the entire lease term, and the value of land use rights has been capitalized into the enterprise’s capital according to the regulations cited above.

In addition, enterprises must publish and notify the Business Registration Office – Department of Planning and Investment about new registration or when there is a change in information about the company’s headquarters. In case of violation, enterprises will be subject to administrative penalties as follows:

• Fine from VND 20,000,000 to VND 30,000,000 for the act of falsely declaring the head office address as prescribed in Article 43 of Decree 122/2021/ND-CP
• Warning or fine up to VND 30,000,000 for late/failure to register when changing head office address, based on Article 44 of Decree 122/2021/ND-CP.

Regulations on project implementation locations of FDI companies

For trading and service companies

The project implementation location is usually the company’s head office address, provided that the head office meets the above guidelines.

For companies that carry out manufacturing and processing of goods

Companies registering for production and processing activities must have a project location in an industrial park or industrial cluster that meets the conditions for production and processing in the industry the company has registered for and is permitted to register for operations. The business location for production and processing can be rented from another qualified entity or rented in an industrial park or a project can be established to request land leases from the state.

Is an FDI company required to have its headquarters at the project implementation location as required by state agencies?

According to Point g, Clause 1, Article 11 of the Investment Law 2020, which stipulates the guarantee of investment and business activities, specifically, the State does not require investors to establish their headquarters at the location required by competent state agencies. Except in the case where a company registers for production and processing activities, it is required to have a project implementation location in an industrial park or industrial cluster as instructed above.

Can multiple companies have the same head office address?

According to Article 42 of the Law on Enterprises 2020, the head office of an enterprise is stipulated as follows: The head office of an enterprise is located in Vietnam, is the contact address of the enterprise, and is determined according to the administrative unit’s boundaries; has a telephone number, fax number, and email.

Based on the above provisions, the law currently does not prohibit two or more companies from registering their headquarters at the same address. Therefore, a valid address can be used to register headquarters for many businesses.

Above is all the information about the regulations on the Guidance on the head office documents when establishing an FDI company. If you have any related questions or need legal support on the headquarters profile to establish FDI company in Vietnam, please contact Viet An Law for the best support!