A Branch is a independent entity that conducts business in its own name but still acts on behalf of the company. Therefore, set up a branch is a type of bussiness that many foreign investors want to proceed in Vietnam. Vietan law has received a lot of questions about the procedures to set up a branch in Vietnam so Vietan law please to answer these for clients below:
What are requirements to be granted the Establishment of branches license?
Foreign businesses shall be granted Licenses for Establishment of branches if they satisfy the following requirements:
- The foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
- The foreign trader has come into operation for at least 05 year from the date of establishment or registration;
- The Bussiness Registration Certificate or equivalent document is valid for at least 01 more year from the date of submission of the application;
- The scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with bussiness lines of the foreign trader;
- The businesses of the branch is inconsistent with Vietnam’s Commitments or the foreign trader in one of countries or territories being parties to treaties to which Vietnam is a signatory, the branch can be set up only if they obtain a prior approval of the relevant Minister for establishment of the branch.
What kinds of document you need to prepare for the dossier to set up a branch of a foreigned-invested company in Vietnam?
A dossier for the establishment of branches license of a foreign trader shall include:
- An application form for license for establishment of the branch using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader;
- Copies of the Business Registration Certificate or equivalent documents of the foreign trader (translated into Vietnamese and certified or legalized by overseas diplomatic missions or Consulates of Vietnam in accordance with laws of Vietnam);
- A letter of appointment of the head of the branch (translated into Vietnamese and certified true in accordance with laws of Vietnam);
- Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established (translated into Vietnamese and certified true in accordance with laws of Vietnam);
- Copies of the branch charter (translated into Vietnamese and certified true in accordance with laws of Vietnam.);
- Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch;
- Documents on the planned location of the branch including:
- Copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the branch;
- Copies of documents on the planned location of the branch which satisfies requirements for security, occupational hygiene and safety and others stipulated in laws of Vietnam.
How can the dossier for the Establishment of branches license be submitted?
The foreign trader shall submit their application to the licensing agency (Ministry of Industrial and Trade) where the representative office is expected to be located directly or by post office or online (if applicable). The licensing agency shall examine such application and request the applicant to complete their application within 03 working days from the date of receipt of the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of such application.
Within 15 days from the date of issue, re-issue, adjustment, renewal and revocation of the Establishment of Branch License, the state-authorized bodies has the responsibility to announce on their web portal the following information:
- Name and address of the branch;
- Name and address of the foreign trader;
- The head of the branch;
- The number, issue date and validity of the Establishment of Branch License;
- The scope off operation of the branch;
- The date of re-issue, adjustment, renewal and revocation of the Establishment of Branch License.
What is the validity of the Establishment of branches license ?
The Establishment of Branch License shall be valid for 05 years but not exceeding the remaining validity of the certificate of registration or equivalent document of the foreign trader in case the documents aforesaid have expired date.
Are there anything to notice for the Head of the Branch?
- The Head of the Branch shall be responsible to the foreign trader for his / her activities and the Branch in the scope authorized by the foreign trader;
- The Head of a Branch shall be responsible for his / her activities in the case of carrying out activities outside the scope authorized by the foreign trader;
- The head of a branch must authorize in writing for another person to perform the rights and obligations of the head of the branch in accordance with the law upon exit from Vietnam. This authorization must be approved by the foreign trader. The Head of the Branch is still responsible for the exercise of the authorized rights and obligations;
- If at the end of the authorization period specified at Point 3 above, the head of the branch has not returned to Vietnam and has no other authorization, the authorized person has the right to continue performing the rights and obligations of the head of the Branch within the scope of its authorization until the Head of the Branch returns to work at the Branch or until the foreign trader appoints another person to be the Head of the Branch;
- If the head of the branch does not present in Vietnam for more than 30 days without authorizing another person to perform the rights and obligations of the head of the branch or is dead, missing, detained, sentenced to imprisonment or he/she is restricted from losing their civil act capacity, foreign traders must appoint another person to be the head of the branch;
- Heads of branches of foreign traders must not concurrently hold the following positions:
- Head of Representative Office of another foreign trader;
- The head of a representative office of the same foreign trader;
- The legal representative of an economic organization established under Vietnamese law.
Vietanlaw has just answered some basic questions that foreign investors always wonder when prepare to set up a branch in Vietnam. If there are any issues or procedures that you do not understand clearly, please contact to us via phone number or website to get information for more details. Vietan law is willing to help you solve all legal difficulties that you have faced up with!