Fees for establishing foreign representative offices in Vietnam

Many foreign companies want to expand their business scope in Vietnam and choose to establish representative offices. However, foreign businesses may encounter difficulties understanding the procedures and fees. The following article from Viet An Law will provide you with information about fees for establishing foreign representative offices in Vietnam.

Legal basis

• Law on Enterprise 2020;
• Law on Fees and Charges 2015;
• Decree 07/2016/ND-CP detailing the implementation of the Commercial Law on the establishment, operation, rights, and obligations of representative offices and branches of foreign traders in Vietnam;
• Decree 98/2020/ND-CP stipulating penalties for administrative violations in commercial activities, production and trading of counterfeit and banned goods and protecting consumer rights, amended by Decree 17/ 2022/ND-CP;
• Circular 47/2019/TT-BTC, as amended and supplemented by Circular 74/2022/TT-BTC regulates collection rates, collection, payment, management, and use of fees for providing business information, fees business registration fees.
• Circular 143/2016/TT-BTC stipulates the rates, collection, and payment regime of fees for licensing the establishment of representative offices of foreign trade promotion organizations and foreign traders in Vietnam, as amended and supplemented by Circular 74/2022/TT-BTC.

Concept and functions of foreign representative offices in Vietnam

• According to the provisions of Clause 2, Article 45 of the Law on Enterprises 2020, a representative office is a dependent unit of the enterprise, with the task of authorized representative for the interests of the enterprise and protecting those interests.
• Representative offices are divided into 02 groups: with commercial presence in Vietnam, and without commercial presence in Vietnam.
• A representative office has no business function and can only represent authorized representatives or sign transactions serving office administrative activities at the location where the representative office is established.
• Foreign representative offices perform the functions of liaison offices, market research, and promotion of business investment opportunities of the traders they represent, excluding the service industry where the establishment of representative offices in that field is regulated in specialized legal documents.

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

Article 7 of Decree 07/2016/ND-CP stipulates the conditions for foreign traders to be granted a License to establish representative offices, including:

• Foreign traders are established and registered by the laws of countries and territories participating in international treaties to which Vietnam is a member or recognized by the laws of these countries and territories;
• Foreign traders have been operating for 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 year from the date of submission of the application;
• The operational content of the Representative Office must be consistent with Vietnam’s commitments in international treaties to which Vietnam is a member;
• In case the content of activities of a Representative Office is not consistent with Vietnam’s commitments or the foreign trader does not belong to a country or territory participating in an international treaty to which Vietnam is a member, the establishment of a Representative Office will be necessary. Representative offices must be approved by the Minister and Head of the ministerial-level agency in specialized management.

Regulations on registration fees for establishing representative offices in Vietnam

For representative offices established by foreign companies in Vietnam

Fees and charges

Agencies collecting fees and charges

For each type of fee, the corresponding competent authority will be charged as follows:

• Fees for providing business information are collected by:
  • Business Registration Support Center under the Department of Business Registration Management (Ministry of Planning and Investment).
  • Department of Planning and Investment of provinces.
• Business registration fee (including new issuance, re-issuance, change of content of Certificate of registration of enterprise representative office operation):
  • Department of Planning and Investment of provinces and centrally run cities.
  • The investment registration agency collects revenue from foreign investors and economic organizations with foreign investment capital in case of carrying out investment registration and business registration procedures according to the interconnected one-stop mechanism.

Note

Enterprises that register representative office operations electronically (National Business Registration Portal) are exempt from business registration fees (other fees are not included). You can register at the website https://dangkylanhdoanh.gov.vn/vn/Pages/Trangchu.aspx

For representative offices established by foreign traders with no commercial presence in Vietnam

When foreign traders are granted a license to establish a representative office in Vietnam, they must pay fees according to a separate Circular (Circular 143/2016/TT-BTC).

Fees and charges

The fee rates for licensing the establishment of representative offices of foreign traders in Vietnam are as follows:

Depending on the location where the foreign company’s representative office is (expected to be) located, the fee and fee collection agency is also the licensing agency to establish the representative office, including:

• Departments of Industry and Trade of provinces and centrally run cities where foreign traders plan to locate representative offices outside industrial parks, export processing, economic, and high-tech zones.
• Management board of industrial parks, export processing, economic, and high-tech zones.

Currency Unit collecting fees and charges

Fees for licensing to establish representative offices of foreign traders in Vietnam are collected in Vietnamese Dong.

Renewal of License to establish foreign trader representative offices

The license to establish a representative office of a foreign trader is valid for 05 years but does not exceed the remaining term of the Enterprise Registration Certificate or documents of equivalent value of the foreign trader in the case of documents requiring a time limit.

Regarding license renewal time:

• A dossier to renew the License to establish a representative office must be submitted at least 30 days before the License expires.
• Foreign traders submit applications directly or by post or online (if eligible) to the Licensing Agency.
• Within 03 working days from the date of receipt of the dossier, the Licensing Agency 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.
• Within 05 working days from the date of receipt of complete and valid documents, the Licensing Agency shall extend the License to establish a representative office. In case of non-renewal, a document must clearly state the reason.
• In case the extension of the License to establish a representative office has not been stipulated in specialized legal documents, the Licensing Agency shall send a document to seek opinions from the specialized management Ministry within 03 working days. from the date of receipt of complete and valid documents. Within 05 working days from the date of receipt of the document from the Licensing Agency, the Ministry of specialized management shall issue a document clearly stating its agreement or disagreement to extend the License to establish a representative office. Within 05 working days from the date of receiving comments from the specialized management ministry, the licensing agency shall extend or not extend the license to establish a representative office or the license to establish a branch for foreign traders. In case of non-renewal, a document must clearly state the reason.

What will be the penalty when not renewing the foreign representative office license?

Pursuant to Point b, Clause 4, Article 67 of Decree 98/2020/ND-CP, if a representative office of a foreign trader continues to operate after the competent state management agency revokes the Establishment License. An expired representative office or license that is not renewed will be fined from 30,000,000 to 50,000,000 VND.

If you have any further questions about the fees for establishing foreign representative offices in Vietnam, please contact Viet An Luat for the best support!