License to establish representative office (RO) adjustment in Vietnam

Currently, there are many foreign companies setting up representative offices (RO) in Vietnam to carry out business activities. A license to establish RO for a foreign company in Vietnam is a legal document required for the representative office of a foreign company to operate legally in Vietnam. Thus, in the case of a license to establish representative office adjustment in Vietnam, what issues should be noted? In the following article, Viet An Law will answer this question for clients.

What legal documents regulate the licenses of RO in Vietnam?

• Decree 07/2016/ND-CP detailing the implementation of Commercial Law on the establishment, operation, rights, and obligations of Representative Offices and Branches of foreign traders in Vietnam.
• Decree 98/2020/ND-CP regulating administrative sanctions for violations in commercial activities, production and trading of counterfeit and prohibited goods, and protection of consumer rights, amended and supplemented by Decree No. 17/2022/ND-CP.
• Circular 11/2016/TT-BCT stipulates the form for implementing Decree 07/2016/ND-CP, amended and supplemented by Circular 03/2024/TT-BCT.
• Circular 143/2016/TT-BTC regulating the collection rates, collection, and payment regime of fees for granting licenses to establish representative offices of foreign trade promotion organizations and foreign traders in Vietnam, issued by the Minister of Finance.

When procedures to adjust the license of RO in Vietnam is needed?

Under Article 15 of Decree 07/2016/ND-CP, during the operation in Vietnam, when the following changes occur, foreign traders must carry out procedures to adjust the license to establish a representative office in Vietnam:

• Change the name or head office address of the foreign company.
• Change of Head of Representative Office.
• Change the name of the Representative Office.
• Change the activities of the Representative Office.
• Change the address of the Representative Office’s headquarters in a province, or in a geographical area under the management of a Management Board

What dossiers are required to adjust a License to establish a Representative Office?

The component of the dossier

The dossier for adjusting the License to establish a Representative Office 01 set includes:

• Application for adjustment of License to establish a Representative Office signed by the authorized representative of the foreign company according to Form MD-7 of the Appendix issued with Circular 11/2016/TT-BCT;
• Documents proving the content of the adjustment vary depending on the case of adjustment.
• Original copy of License to establish Representative Office;

Notes the proving documents

• In case of change of name or head office address of foreign company: Legal documents issued by competent authority proving the change of name or head office address of foreign company.
• In case of changing the name:
  • Document of foreign trader appointing/designating new Head of Representative Office;
  • Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreign) of the new Head of the Representative Office;
  • Documents proving that the former Head of the Representative Office has fulfilled personal income tax obligations up to the time of change.
• In case of changing the address of the Representative Office’s quarter:
  • Copy of memorandum of understanding or lease agreement or copy of document proving that the trader has the right to exploit and use the location to set up the Representative Office;
  • Copy of documents on the proposed location of the Representative Office.
• Representative office information, foreign company information such as License to establishment/ Enterprises registration certificate/ Business code, name of representative office/foreign company, head office address of representative office/foreign company, foreign currency account number, Vietnamese currency account number,…

Where to submit the dossier for the License to establish representative office adjustment?

According to Clause 2, Article 17 of Decree 07/2016/ND-CP, foreign companies submit their dossiers directly or by post or online (if eligible) to the Licensing Authority.

Specific:

• Department of Industry and Trade: in case the representative office is located outside industrial parks, export processing zones, economic zones, high-tech zones
• Management board of industrial parks, export processing zones, economic zones, high-tech zones: in case the representative office is located in an industrial park, export processing zone, economic zone, high-tech zone.

Steps to adjust License to establish RO in Vietnam

Step 1: Prepare for changing conditions

Within 60 working days from the date of change in the contents of the case requiring Licence to establish representative office adjustment as analyzed above, the foreign company must carry out procedures to adjust License to establish Representative office.

Step 2: Submit dossier for license adjustment

Foreign companies submit their dossiers directly or by post or online (if eligible) to the Department of Industry and Trade or the Management Board of industrial parks, export processing zones, economic zones, and high-tech zones (depending on the case).

Step 3: Agency receiving and checking dossier

• Within 03 working days from the date of receiving the dossier, the licensing authority shall check and request additional information if the dossier is incomplete or invalid.
• Requests for additional documents can be made a maximum of once during the dossier processing process.

Step 4: Grant of adjustment License

• Within 05 working days from the date of receiving a complete and valid dossier, the licensing authority shall adjust or not adjust License to establish Representative Office.
• In case of no adjustment, there must be a document stating the reason.

Step 5: Information disclosure

Within 15 days from the date of License to establish Representative Office adjustment, the Licensing Authority shall be responsible for publishing on its website the following contents:

• Name and head office address of Representative Office;
• Name and head office address of foreign trader;
• Head of Representative Office;
• Number, date of issue, and validity of License to establish Representative Office;
• Activities of Representative Office;
• Date of adjustment, License to establish Representative Office

Note: In case the adjustment of the Representative Office’s activities results in the Representative Office’s activities being inconsistent with Vietnam’s commitments or the foreign trader is not from a country or territory participating in an international treaty of which Vietnam is a member and in case the adjustment of the Representative Office’s activities has not been regulated in specialized legal documents, the Licensing Authority shall send a written request for comments from the specialized management Ministry within 03 working days from the date of receipt of a complete and valid dossier.

Fees for adjustment RO License

According to Circular 143/2016/TT-BTC, the fee for adjusting the granting of a license to establish a representative office of a foreign company is 1,500,000 (one million five hundred thousand) VND/license.

Note, that fees are collected in Vietnam Dong (VND).

Punishments for failure to adjust RO license

Pursuant to Point d, Clause 2, Article 67 of Decree 98/2020/ND-CP, in case of failure to carry out procedures to adjust the license to establish a representative office of a foreign trader in Vietnam in cases prescribed by law, a fine of from VND 10,000,000 to VND 20,000,000 will be imposed.

Note that this is fine for individuals. The fine for organizations will be double the fine for individuals, specifically from 20,000,000 VND to 40,000,000 VND.

Note on adjusting License to establish representative office according to specialized laws

License to establish representative offices of foreign securities companies adjustment in Vietnam

This case will be governed by the provisions of the Securities Law 2019 and Decree 155/2020/ND-CP. Specifically:

The components of dossier

• Application for change of name, head office address, capital granted to branches, branch directors, and Heads of representative offices of securities companies in Vietnam: according to Article 183 of Decree 155/2020/ND-CP.
• Dossier for changing the name and head office address of a foreign securities company with a representative office in Vietnam: according to Article 185 of Decree 155/2020/ND-CP.

The order of execution

• License adjustment dossiers are submitted to the State Securities Commission.
• Within 07 working days from the date of receipt of complete and valid documents and results of the inspection of facilities, the State Securities Commission shall issue, change or adjust the Registration Certificate of representative office operations. In case of refusal, a written response must be given stating the reasons.

License of representative offices of foreign insurance companies adjustment in Vietnam

Foreign insurance enterprises, foreign reinsurance enterprises, foreign financial and insurance corporations, and foreign insurance brokerage enterprises are allowed to set up representative offices in Vietnam.

In this case, the license adjustment procedure will be governed by the provisions of the Law on Insurance Business 2022 and Decree 46/2023/ND-CP.

The components of dossier

• Cases of amending and supplementing the license to establish the representative office of a foreign insurance company in Vietnam are similar to the general cases in Decree 07/2016/ND-CP.
• The license amendment and supplement dossier includes 01 copy in Vietnamese and 01 copy in English according to Clause 2, Article 58 of Decree 46/2023/ND-CP.

The order of execution

• Foreign enterprises submit directly or by post or online (if eligible) 01 set of documents to the Ministry of Finance.
• Within 14 days from the date of receipt of a complete and valid dossier, the Ministry of Finance shall issue an Adjustment License. In case of refusal to approve, the Ministry of Finance shall issue a written explanation clearly stating the reasons.

License to establishment representative offices of foreign credit institutions adjustment in Vietnam

A representative office of a foreign credit institution is granted a License when it fully satisfies the conditions under Clause 4, Article 29 of the Law on Credit Institutions 2024.

According to Article 10 of Circular 34/2024/TT-NHNN, the license to establish representative office adjustment for the following changes:

• Change of name;
• Change the location of the head office to another province or city where the foreign representative office is located;
• Extend the term of operation.

The components of dossier

Application for amendment and supplementation of License according to Clause 1, Article 11, Circular 34/2024/TT-NHNN.

The order of execution

• Foreign representative offices prepare a dossier to send to the State Bank branch where the headquarters is located (in case of name change, extension of operation period) or to the State Bank branch where the headquarters is expected to be relocated (in case of change of headquarters location).
• Within 30 (thirty) days from the date of receipt of a complete and valid dossier, the State Bank branch shall decide to amend and supplement the License for the changed contents of the foreign representative office. At the same time, it shall send a written notice to the State Bank branch where the foreign representative office is located (in case of changing the location of the head office to another province or city).

License to establish representative office adjustment in Vietnam of Viet An Law

• Consulting on regulations related to conditions for license to establish representative office adjustment;
• Supporting in drafting documents, papers, and preparing complete dossiers according to regulations
• Representing clients, carrying out procedures to adjust licenses to establish representative office at competent authorities;
• Consulting on procedures for renewal and re-issuance of license to establish representative office;
• Consulting on rights and obligations of foreign company representative offices;
• Other legal services as requested by clients.

If you have any questions or need advice for the license to establish representative office adjustment in Vietnam, please contact Viet An Law for the best support!