License to establish a foreign representative office in Vietnam

A representative office is the most convenient and practical means of initially setting up in the country. This is even more critical given that setting up other forms of commercial presence may be either complicated and time-consuming but the representative office does not engage in any direct profit-making activities. The article below will provide information about procedures for granting a License to establish a foreign representative office at the Department of Industry and Trade to set up a foreign representative office in Vietnam.

Foreign representative offices must have an establishment license

According to Clause 6, Article 3 of the Commercial Law 2015, it is stipulated that representative offices of foreign traders in Vietnam are dependent units of foreign traders, established following the provisions of Vietnamese law to learn the market and carry out several trade promotion activities permitted by Vietnamese law.

Accordingly, it can be understood that a Foreign Representative Office Establishment License is a legal document issued by a competent authority, confirming that a foreign company or organization has been allowed to establish a foreign representative office. representative office in that locality.

This license usually certifies the legal existence of the company or organization and determines the rights, responsibilities, and operating conditions of the representative office. It is one of the requirements for a company or organization to be able to conduct business activities in another country or locality.

Authority to issue the License to establish a foreign representative office in Vietnam

Thus, the Department of Industry and Trade of provinces and centrally run cities where traders plan to locate representative offices outside industrial parks, export processing zones, economic zones, and high-tech zones have the authority to issue a License to establish a foreign representative office.

Conditions for granting a License to establish a foreign representative office in Vietnam

According to Article 7 of Decree 07/2016/ND-CP regulating conditions for granting a License to establish a foreign representative office are as follows:

• Form of presence in host country: established, registered business according to the laws of countries and territories participating in international treaties to which Vietnam is a member of the laws of other countries and territories This territory recognizes;
• Operating time in the host country: at least 01 year from the date of establishment or registration. In case the Enterprise Registration Certificate or equivalent document of a foreign trader stipulates an operating term, that term must be at least 01 years til the date of submission of the application;
• Operational content of the Representative Office: comply with Vietnam’s commitments in international treaties to which Vietnam is a member. Note that some professions are not allowed to establish representative offices according to Vietnam’s commitments under In case the content of activities is not appropriate, it must be approved by the Minister or Head of the ministerial-level agency in specialized management (hereinafter referred to as the Minister of specialized management).

Dossier for granting a License to establish a foreign representative office at the Department of Industry and Trade

Clause 1, Article 10 of Decree 07/2016/ND-CP stipulates the components of the application for a License to establish a Representative Office, including:

Procedures for granting a License to establish a foreign representative office at the Department of Industry and Trade

According to Article 11 of Decree 07/2016/ND-CP stipulating the order and procedures for granting a License to establish a foreign representative office will include the following steps:

Step 1: Apply for a License to establish a foreign representative office

Foreign traders submit applications directly or by post or online (if eligible) to the Department of Industry and Trade where the Representative Office is expected to be located.

Step 2: Receive and process dossier

Within 03 working days from the date of receiving the dossier, the Department of Industry and Trade shall check and request additional documents if the dossier is not complete and valid. Requesting additional documents can be made at most once during the document processing process.

Step 3: Send dossier to seek opinions from specialized management ministries (if any)

In the case specified in Clause 5, Article 7 of Decree 07/2016/ND-CP and in cases where the establishment of a Representative Office has not been specified in specialized legal documents, the Licensing Agency shall send a document. Get opinions from the specialized management ministry within 03 working days from the date of receipt of complete and valid documents.

Within 05 days from the date of receiving the written request for opinions from the Licensing Agency, the Ministry of Specialized Management shall issue a document clearly stating its agreement or disagreement to grant a license to establish a Representative Office.

Step 4: Issue a License to establish a foreign representative office

In cases where opinions from specialized management ministries are not required, within 07 working days from the date of receipt of complete and valid documents, the Licensing Agency shall issue or not issue the License to establish representative offices for foreign traders. In case of refusal to grant a license, there must be a written statement clearly stating the reason.

In case it is necessary to obtain opinions from the Ministry of specialized management, within 05 working days from the date of receiving the opinion of the Ministry of specialized management, the Licensing Agency shall issue or not grant the License to establish a foreign representative office. In case of refusal to grant a license, there must be a document clearly stating the reason.

Some note for clients

Note about dossier components

According to Clause 2, Article 10 of Decree 07/2016/ND-CP stipulates several notes on the components of the application for a License to establish a foreign Representative Office as follows:

• Documents specified in Point b, Point c, Point d, and Point dd (in case a copy of the passport of the head of the Representative Office is a foreigner) Clause 1, Article 10 of Decree 07/2016/ND-CP must translate into Vietnamese and authenticate according to the provisions of Vietnamese law.
• Documents specified in Point b, Clause 1, Article 10 of Decree 07/2016/ND-CP must be certified or consularly legalized by Vietnamese diplomatic missions and consulates abroad according to regulations of Vietnamese law.

Licensing fee

According to the provisions of Clause 1, Article 4, Circular 143/2016/TT-BTC stipulates the fee rates for licensing the establishment of foreign representative offices as follows:

• In case of new issuance, it is 3,000,000 VND/license.
• In case of re-issuance, amendment, supplement, or extension: 1,500,000 VND/license.

Term of License to establish a foreign representative office

According to Article 9 of Decree 07/2016/ND-CP, the License to establish a Representative Office is valid for 05 years but does not exceed the remaining term of the Business Registration Certificate or documents of equivalent value. documents of foreign traders in case those documents have regulations on deadlines.

Thus, the term of the License to establish a Foreign Representative Office is 5 years.

Active reporting mode

According to Article 30 of Decree 07/2016/ND-CP regulating the regime of reporting activities of foreign representative offices, specifically:

• Before January 30 every year, the Representative Office is responsible for sending a report according to the form of the Ministry of Industry and Trade on its activities in the previous year by mail to the Licensing Agency.
• Representative offices are obliged to report, provide documents, or explain issues related to their activities at the request of competent state management agencies.

Services on establishing foreign representative offices by Viet An Law

• Consulting on legal issues related to procedures for granting licenses to establish foreign representative offices;
• Support clients in drafting documents to carry out procedures to apply for a License to establish a foreign representative office;
• Representing clients to carry out procedures for applying for a License to establish a foreign representative office at the Department of Industry and Trade;
• Consulting on other legal issues at the request of clients.

Above is all the information prescribed on procedures for granting a License to establish a foreign representative office in Vietnam at the Department of Industry and Trade. If you have related questions or need legal support regarding the license to operate a foreign representative office, please contact Viet An Law for the best support!