Guide to set up branch and representative office in Vietnam

During their operation and development, enterprises may establish one or more dependent units in potential provinces and cities to expand their business scale. The most commonly established dependent units by enterprises include branches and representative offices. So what are these units and what are their functions? In the article below, Viet An Law would like to guide to set up branch and representative office in Vietnam by current law.

What is a dependent unit of an enterprise?

The dependent units of an enterprise are units under the management of the enterprise and the enterprise has full control over the leadership and business areas of these dependent units. Currently, pursuant to Article 44 of the Enterprise Law 2020, enterprises have 03 types of dependent units, specifically the following units:

• Branches, including affiliated branches and independent branches;
• Representative offices;
• Business locations.

In this article, Viet An Law will focus on guiding to set up branch and representative office in Vietnam for customers.

What is a branch of an enterprise?

According to the concept in Clause 1, Article 44 of the Enterprise Law 2020, a branch is a dependent unit of an enterprise, responsible for performing all or part of the functions of the enterprise, including the function of authorized representation. The branch’s business lines must be consistent with the business lines of the enterprise.

Thus, a business can register one or all of its business lines for a branch to conduct business activities. A business has full rights to establish branches domestically and internationally, depending on its needs and business scope.

The branch will have its tax code and seal. The branch’s tax code structure will be: Business tax code – Branch establishment serial number.

For example, if a business has the tax code: 0110123456 and establishes its first branch, that branch will have the tax code: 0110123456-001.

Branches are classified based on accounting methods, which are:

• Independent branch: Declare business license tax, value added tax, and corporate income tax at the tax authority managing the branch. And declare personal income tax at the tax authority directly managing the enterprise.
• Dependent branches: Make centralized corporate income tax declarations at the head office and declare taxes at the tax authority directly managing the enterprise.

What is a representative office of an enterprise?

A representative office is a dependent unit of an enterprise, with the task of representing the interests of the enterprise by authorization and protecting those interests. Unlike a branch, a representative office does not perform the business functions of the enterprise, specifically the production and trading of goods and services.

Therefore, representative offices do not have to pay business license tax nor register to issue and use invoices. However, representative offices still have to submit tax declarations for the types of taxes that the representative office generates.

Enterprises have full rights to set up representative offices domestically and abroad.

Dossiers for registration of branch and representative office activities of enterprises

Branches and representative offices of enterprises have similar dossier components. Specifically as follows:

Single-member LLC

• Notice of establishment of branch or representative office signed by the legal representative of the enterprise;
• Decision of the company owner on the establishment of branches and representative offices;
• Copy of legal documents of the individual for the head of the branch or representative office.

Multiple-member LLC, partnership

• Notice of establishment of branch or representative office signed by the legal representative of the enterprise;
• Copy of resolution, decision and copy of meeting minutes of the Board of Members for multiple-member LLCs, and partnerships;
• Copy of legal documents of the individual for the head of the branch or representative office.

Joint stock company

• Notice of establishment of branch or representative office signed by the legal representative of the enterprise;
• Copy of resolutions, decisions, and copy of meeting minutes of the Board of Directors;
• Copy of legal documents of the individual for the head of the branch or representative office.

Private enterprise

• Notice of establishment of branch or representative office signed by the legal representative of the enterprise;
• Decision of private enterprise owner on the establishment of branch, representative office
• Copy of legal documents of the individual for the head of the branch or representative office.

In addition to the documents required by law, customers need to provide additional authorization for Viet An Law so that we can register the operation of branches and representative offices for enterprises on your behalf.

Guide to set up branch and representative office in Vietnam

Step 1: After completing the application, submit the application to the Business Registration Office where the branch or business location is planned to be located.

Step 2: Within 03 working days from the date of receiving the valid dossier, the Business Registration Office will issue a Registration Certificate of branch and representative office operations to the enterprise.

In case the dossier is invalid, the Business Registration Office will send a written notice to the enterprise so that the enterprise can amend and supplement the dossier.

Fees: Currently, businesses are exempted from registration fees for branches and representative offices.

Notice of establishment of branches and representative offices of Vietnamese company in abroad

For branches and representative offices of Vietnamese companies established abroad, procedures will be carried out in accordance with the laws of that country. Within 30 days from the date of the official establishment of a branch or representative office abroad, the enterprise must notify in writing with a copy of the Registration Certificate of the Branch or Representative Office or equivalent documents to the Business Registration Office where the enterprise has its head office.

Distinguish between branches and representative offices of enterprises

Although both are dependent units of an enterprise, branches, and representative offices have certain differences in terms of the scope of operations, tax and accounting issues, and registration procedures.

Function

A branch has the function of performing one or all business functions and representative functions under the authorization of the enterprise.

Representative offices do not have business functions but only transaction and marketing functions, in other words, transaction offices are places with the function of promoting products, answering questions, and consulting customers.

Accounting and tax declaration forms

Branches will be able to choose between two forms of accounting: independent accounting and dependent accounting. Branches are obliged to pay business license tax, value added tax, personal income tax, and corporate income tax.

Representative offices have only one form of accounting, which is dependent accounting, and tax declaration will be done by the parent company.

Above is the guide to set up branch and representative office in Vietnam of Viet An Law Firm. If you need further advice on the business corporation, please contact us.

Update: 10/2024