Establishment of foreign company representative offices in Vietnam

In 2023, procedures  for set up a representative office of foreign companies in Vietnam  continue to be applied according to the provisions of Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of Foreign Traders in Vietnam. In order to help foreign traders and foreign companies facilitate legal procedures in the process of establishing a foreign company’s representative office in Vietnam, Viet An Law Firm summarizes the conditions, documents to be prepared, procedures and services for establishing a representative office of a foreign company in Vietnam as follows:

Legal basis

• 2005 Commercial Law;
• Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of Foreign Traders in Vietnam;
• Circular No. 11/2016/TT-BCTguiding Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of Foreign Traders in Vietnam.

Conditions for establishing a foreign company’s representative office in Vietnam

Foreign traders may only issue operation certificates of representative offices in Vietnam when fully meeting the following conditions:

• Foreign companies that have been established or registered for business in accordance with the laws of countries acceding to international treaties to which Vietnam is a contracting party or recognized by the laws of these countries;
• The foreign company has been operating in the host country for at least 01 year from the date of establishment or registration;
• In case the foreign business registration certificate stipulates the operation term, the term of such license must be at least 01 year from the date of submission of the application in Vietnam;
• Contents of representative offices: market research, trade promotion in Vietnam.
• In case the operation contents of the representative office are inconsistent with the commitments of Vietnam or foreign traders not belonging to countries or territories acceding to treaties to which Vietnam is a contracting party, the establishment of a representative office must be approved by the Minister, Heads of ministerial-level agencies for specialized management (hereinafter collectively referred to as the Minister of Specialized Management).

Dossier of establishment of a representative office of a foreign company in Vietnam

• An application for the establishment of a representative office of a foreign company in Vietnam;
• Consular legalization and notarized translation of business registration certificates or papers of equivalent value of foreign traders certified by competent agencies where the foreign company is established;
• Documents appointing the head of the representative office of the foreign company;
• Notarized translation of audited financial statements or documents certifying the performance of tax or financial obligations in the latest fiscal year or papers of equivalent value issued or certified by competent agencies or organizations where foreign traders are established, prove the existence and operation of foreign traders in the latest financial year;
• Notarized translation of passport or identity card or citizen identity card (if Vietnamese) or copy of passport (if foreigner) of the head of the representative office;
• Documents on the proposed location of the representative office include:
  • Office lease agreement certified by copy;
  • Notarized copy of the lessor’s land use right certificate (if renting from an enterprise, it is necessary to provide an additional Certificate of business registration with real estate business function);
  • In addition, the location of the foreign company’s representative office must comply with the provisions of Vietnamese law on security, order, occupational safety and health and other conditions as prescribed by law

Note: All dossiers of license for establishment of representative offices shall be signed and stamped by the parent company.

Steps to establish a foreign company representative office in Vietnam

Step 1: Grant the license to establish a representative office of a foreign company

Completion deadline is from 07 – 10 working days;

Step 2: Engrave the round seal and register the seal sample of the foreign company’s representative office

Completion deadline: 05 working days;

Step 3: Register for issuance of tax code notice of foreign company representative office

Completion deadline: 05 -07 working days.

Cases of non-license to establish a representative office of a foreign company in Vietnam

The agency issuing the license for establishment of a representative office of a foreign company in Vietnam shall not grant a license for establishing a representative office of a foreign company in Vietnam in the following cases:

• Foreign traders do not fully meet the conditions specified above.
• Foreign traders shall only trade goods and/or services on the List of goods and services prohibited from trading in accordance with the provisions of Vietnamese law.
• Foreign traders shall apply for a license to establish a representative office of a foreign company in Vietnam within 02 years from the date of revocation of the license for establishment of a representative office.
• There is evidence that the establishment of representative offices of foreign companies harms national defense, security, social order and safety, historical traditions, culture, morality, fine customs and customs of Vietnam and people’s health, destroys natural resources and destroys the environment.
• Submitting invalid documents and failing to supplement sufficient documents at the request of the licensing authority.

Reporting regime of foreign company representative offices in Vietnam:

• Before January 30 of each year, the representative office shall send a report according to the form of the Ministry of Industry and Trade on its activities in the previous year by post to the Department of Industry and Trade.
• Representative offices are obliged to report, provide documents or explain issues related to their operations at the request of competent state management agencies.

The following procedures for establishing a foreign company’s representative office in Vietnam

• Open a specialized account in foreign currency and a specialized account in Vietnamese dong with foreign currency origin at a bank licensed to operate in Vietnam and may only use this account for the operation of the representative office;
• Annually, before January 30 of the next year, the representative office must send a written report on its activities during the year to the Department of Industry and Trade (according to the form);
• Make a cash book to record all revenues and expenditures during the operation of the representative office;
• Apply for a work permit for foreign workers working at a representative office (if any);
• Sign labor contracts with the chief representative and employees of the representative office;
• Every year, the foreign company must certify salary and income (according to the form) for the chief representative and employees of the representative office;
• Pay personal income tax, insurance to the chief representative and employees of the representative office (if any). Note, when paying taxes, save all tax payment declarations and tax receipts of state agencies and finalize annual income tax for the chief representative and employees of the representative office;
• Other obligations as prescribed by current law;

Some questions related to the establishment of a foreign company’s representative office in Vietnam

What records should a representative office keep at the office during operation?

In the course of operation, the representative office should keep the following documents: Operation license; Seal, seal sample certificate; Notification of tax identification number paid by the representative office; Dossiers and documents as instructed in the procedures after establishing a representative office.

Can a foreign company’s representative office in Vietnam sign an economic contract?

Contents of representative offices: market research, trade promotion in Vietnam. Therefore, representative offices of foreign companies in Vietnam are not allowed to sign and execute economic contracts.

Can the representative office of the foreign company collect the money paid by the customer to the foreign company?

Contents of representative offices: market research, trade promotion in Vietnam. Therefore, representative offices of foreign companies in Vietnam are not allowed to collect payments from foreign companies by customers.

Does a foreign company without a seal or dossier of establishment of a representative office have to be consular legalized?

In addition to the Certificate of operation registration of the foreign company, consular legalization is required according to regulations. Establishment documents signed and stamped by foreign companies are not subject to consular legalization.

Service of establishing a representative office of a foreign company in Vietnam of Viet An Law Firm

• Pre-establishment consultancy on issues related to the establishment of foreign company representative offices in Vietnam;
• Drafting dossiers of establishment of foreign company representative offices in Vietnam in accordance with the requirements of the Client and the provisions of law;
• Applying for a license to establish a representative office of a foreign company in Vietnam;
• Registration of issuance of seals and seal sample certificates to foreign company representative offices in Vietnam;
• Register and complete procedures for issuance of tax code notice to the foreign company’s representative office in Vietnam;
• Advising on the following procedures for establishing a representative office of a foreign company in Vietnam;
• Declare personnel and labor procedures of representative offices of foreign companies in Vietnam with the Department of Industry and Trade and social insurance agencies;
• Advising on legal procedures, representing the representative office of personal income tax finalization for employees working at representative offices in Vietnam.

If you are interested in the procedures for establishing a representative office of a foreign company in Vietnam, please contact  Viet An Law Firm for the fastest and most accurate package support!