Procedure to establish a representative office of FDI company in Vietnam

According to the provisions of the Enterprise Law, foreign-invested companies established in Vietnam (FDI companies) are Vietnamese legal entities. Therefore, the procedures for establishing a representative office of a foreign-invested company are applied the same way as a Vietnamese-owned company. 

Document of establishment a representative office dossier

The representative office of a foreign-invested company established in Vietnam (FDI company) is a dependent unit of the company, having the task of representing under authorization for the common interests of the company and ensuring the safety of the company. protect those interests. Thus, representative office is not allowed to conduct business activities, only to perform the function of transaction and trade promotion for the parent company.

The documents and procedures for establishing a representative office of a foreign-invested company are as follows:

Dossier and instructions for signing the application for the establishment of a representative office of a foreign-invested company:

Procedures for setting up a representative office of a foreign-invested company

The time to complete the procedures for establishing a representative office of a foreign-invested company is from 4 to 6 days, including the seal engraving procedure.

Authority to receive dossiers of establishment of representative offices of foreign-invested companies

Enterprise registration agency – Department of Planning and Investment where the representative office is located

Notes on general procedures after establishing a representative office

Tax procedures of representative offices

Licensing tax

A representative office is a dependent unit of an enterprise, which has function of representing by authorization for the interests of the enterprise and protecting those interests.

• From January 1, 2017, Representative Offices must pay license tax. Within 30 days from the date of having the operation certificate of the representative office, the license tax must be declared and paid.
• On January 24, 2017, the Ministry of Finance issued Official Letter 1200/BTC-TCT, guiding the tax policy of the representative office as follows: “ In Clause 6, Article 2 of Decree No. 139/2016/ND-CP on license fees dated October 4, 2016 regulated as follows:

License fee payers are organizations or individuals engaged in production and business activities of  goods and services, except for the  case specified in Article 3 of this Decree, including : 

…

6. Branches, representative offices and business locations of organizations specified in Clauses  1 , 2, 3, 4 and 5 of this Article (if any).”

Based on the above provisions, representative offices that carry out activities such as representation, marketing, and market research without production or business activities are not required to pay license tax.

Personal income tax

Representative offices are responsible for withholding, declaring and paying personal income tax on income from wages and salaries of representative office employees as prescribed in Articles 24 and 25 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding the implementation of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No. 65/2013/ND-CP; procedures and dossiers for declaration and payment of personal income tax shall comply with the guidance in Article 16 of the Circular No. 156/2013/TT-BTC dated November 6, 2013 of the Ministry of Finance guiding the implementation of a number of articles of Law on Tax Administration and Decree No. 83/2013/ND-CP.

About the use and issuance of invoices

• Representative offices do not have business functions, have no income from selling goods or providing services, so they do not have to issue and use invoices;
• Representative offices must submit monthly (Quarterly) tax declaration dossiers for arising representative office tax regulations that must be paid or payable on behalf of;
• Representative offices are not required to submit VAT returns, corporate income tax, and financial statements.

Hanging the sign at the head office and representative office

Hanging signs at representative offices. The signboard has the following information: Name of representative office, head office address, phone number, governing body.

Change of representative office

If there are any changes related to the operation and the content shown on the representative office operation certificate, the procedures for change must be carried out in accordance with the law and submitted to the Enterprise Registration Agency – Department of Planning and Investment.

For further information, please refer to the article Declare representative office expenses in Vietnam of Viet An Law.

During the operation of the business, it is inevitable that concerns and problems arise related to legal procedures. Please contact Viet An law firm for advice and related services!