Establishing a branch is currently a strategic decision due to the need to expand the business scale and activities of many companies in Vietnam. A company branch is a dependent unit of the enterprise, tasked with performing all or part of the enterprise’s functions, including the function of authorized rep. Viet An Law hereby provides current regulations to set up a branch of company in Vietnam to facilitate this procedure for enterprises.
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Overview of setting up a branch of company in Vietnam
Information
Content
Legal basis
– Enterprise Law 2020;
– Decree 01/2021/ND-CP on business registration;
– Decree 07/2016/ND-CP detailing the Commercial Law on representative offices and branches of foreign traders in Vietnam.
– Circular 47/2019/TT-BTC regulates the rates, collection, payment, management, and use of fees for providing business information and business registration fees.
Main procedures need to be performed
Register branch operations of Vietnamese companies
Competent authority
Business Registration Office under the Department of Planning and Investment where the branch is located
Documents clients need to provide
– Copies of resolutions, decisions, and meeting minutes of the Board of Members for limited liability companies with two or more members, partnerships, and of the Board of Directors for joint stock companies; Resolutions and decisions of the company owner for one-member limited liability companies on the establishment of branches and representative offices;
– Copies of personal legal documents for the head of the branch.
Method of submitting
– Directly at the Business Registration Office;
– Postal services;
– Electronically at the National Business Registration Portal (https://dangkylanhdoanh.gov.vn);
Resolution deadline
03 working days from the date of receiving the application.
Results
Branch operation registration certificate
Fees and charges
Business registration fees (Circular 47/2019/TT-BTC):
– For applications submitted directly to the Business Registration Office: 50,000 VND/application.
Exemption when registering a business via an electronic information network.
– Information disclosure fee: 100,000 VND/file.
What is a company branch?
According to the provisions of Article 84 of the Civil Code 2015, a branch is a dependent unit of a legal entity, not a legal entity. The branch is responsible for performing all or part of the functions of the legal entity.
According to the provisions of Clause 1, Article 44 of the Law on Enterprises 2020, a company branch is a dependent unit of the enterprise, responsible for performing part or all of the functions of the enterprise, including the function of authorized representative.
A company branch is different from a company representative office in that if the representative office does not have the business function of the company, the branch has the business function and must do business in the right industries registered by the company.
Requirements to set up a branch of company in Vietnam
Branch name condition
Branch names must use letters in the Vietnamese alphabet, and can also be combined with letters F, J, Z, W, numbers, and symbols. T
The branch name must include the company name followed by the phrase “Branch”.
The branch name must be written or posted at the branch headquarters. The branch name is printed or written in smaller font size than the Vietnamese name of the enterprise on transaction papers, documents, and publications issued by the branch.
In addition to names in Vietnamese, branches can register names in foreign languages and abbreviated names. A name in a foreign language is a name translated from a Vietnamese name into one of the foreign languages in the Latin script. Abbreviated names are abbreviated from Vietnamese names or names in foreign languages.
Conditions for branch headquarters
The branch’s headquarters is the contact location of the enterprise in the territory of Vietnam and must have a specific address, including house number, alley, lane, street, road, hamlet, hamlet, commune, etc. wards, towns, districts, districts, towns, provincial cities, provinces. The head office also needs a phone number, fax number, and email (if any).
The company can place one or more branches in a locality according to administrative boundaries. In addition, businesses can also establish a company branch abroad.
Industry and business conditions of the branch
The branch’s business line must be similar to the company’s business line. Branches can only be registered to carry out professions that were originally registered by the company.
If you want to register another business line, you need to additionally register that business line for the main enterprise first and then perform additional registration for the branch later.
Conditions for head of the branch
The head of the branch must be an individual with full civil capacity. This person can be another person or a member of the company. However, the head of the branch must not be in the case of having his tax code suspended on the national tax registration and business registration system.
Conditions for establishing a branch of a foreign company
According to Article 8 of Decree 07/2016/ND-CP, foreign traders are granted a Branch Establishment License when they meet the following conditions:
According to commitments in international treaties;
Foreign traders have been operating for at least 5 years 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 content of the Branch’s operations must be consistent with Vietnam’s market access commitments in international treaties to which Vietnam is a member and following the business lines of foreign traders.
Establishing conditions according to specialized laws
Conditions for establishing a branch of a foreign securities company in Vietnam
According to Article 76 of the Securities Law 2019, a foreign securities company is allowed to establish a branch in Vietnam when it meets the following conditions:
Have not yet established or contributed capital to a securities company or securities investment fund management company in Vietnam where foreign securities companies own more than 49% of charter capital.
The minimum allocated capital for branches of foreign securities companies in Vietnam is 10 billion VND (Clause 2, Article 175, Decree 155/2020/ND-CP).
There are sufficient facilities, techniques, equipment, office equipment, and technology systems following the professional process of securities business activities.
There is a (General) Director, at least 03 employees with securities investment consulting practice certificates, and at least 01 compliance control employee. The (General) Director must meet the standards according to Clause 5, Article 74 of the Securities Law 2019.
Conditions for establishing foreign bank branches in Vietnam
Foreign banks that want to establish branches in Vietnam must comply with the conditions according to Clause 3, Article 29 of the Law on Credit Institutions 2024.
Foreign bank branches must have a minimum allocated capital of 15 million US dollars (USD) (Article 2 of Decree 86/2019/ND-CP).
Managers, executives, and members of the Supervisory Board must meet the standards and conditions specified in Article 41 of the Law on Credit Institutions;
The activities expected to be carried out in Vietnam must be activities that the foreign credit institution is currently permitted to carry out in the country where the foreign credit institution is headquartered.
Conditions for establishing branches of foreign insurance enterprises in Vietnam
To establish a foreign insurance company branch in Vietnam, it is necessary to meet the conditions prescribed in Article 67 of the Law on Insurance Business 2022 and Article 11, Article 36 of Decree 46/2023/ND-CP, specifically:
Only establish branches in the field of foreign non-life insurance or foreign reinsurance.
Foreign insurance enterprises are allowed by the foreign state insurance management agency where the enterprise is headquartered to establish a branch in Vietnam to operate within the scope of insurance operations that the enterprise is licensed to do. business.
Foreign insurance enterprises have at least 07 years of experience in the field expected to apply for a license to operate in Vietnam.
Regarding legal capital: Minimum allocated capital of branches of foreign reinsurance enterprises according to Decree 46/2023/ND-CP.
The capital source for establishing a branch is a legal source, not using loan capital or investment trust capital in any form.
Conditions for establishing a foreign law firm branch in Vietnam
According to the Law on Lawyers 2006, as amended and supplemented in 2012 and 2015 and Decree 123/2013/ND-CP, as amended and supplemented by Decree 137/2018/ND-CP, conditions for the establishment of branches Branches of foreign law firms in Vietnam are as follows:
Lawyers of foreign law firms’ branches are not allowed to participate in proceedings as representatives, defenders, defenders of the litigants’ legitimate rights and interests before Vietnamese Courts or perform other services. Regarding legal documents and notarization related to Vietnamese law, only allowed to practice Vietnamese law consulting.
The foreign law firm commits and guarantees to have at least two foreign lawyers, including one lawyer to be the branch head.
The branch head manages and directs the branch’s operations in Vietnam, and is also the authorized representative of the foreign lawyer’s organization.
The branch head can be a Vietnamese lawyer and must have at least two years of continuous law practice.
Procedures for establishing a company branch
Step 1
Submit
The company submits the application for registration of branch operations to the Business Registration Office where the branch is located.
Step 2
Pay the establishment registration fee
When applying to register a branch operation, the company will have to pay a business registration fee according to the law.
Step 3
Document processing
Within 03 working days from the date of receipt of valid documents, the Business Registration Office shall issue the Branch Operation Registration Certificate.
In case the dossier is not valid, the Business Registration Office will notify the enterprise in writing of the content that needs to be amended or supplemented.
Step 4
Receive the Branch Operation Registration Certificate
This certificate will confirm that the branch is registered and legally operating in that area.
Enterprises are responsible for registering changes to the content of the Branch Operation Registration Certificate within 10 days from the date of the change.
Notes on establishing branches of foreign companies in Vietnam
Notification obligation: Within 30 days from the date of officially establishing a branch abroad, the enterprise must notify in writing the Business Registration Office where the enterprise is headquartered. The notice must be accompanied by a copy of the branch or representative office registration certificate or equivalent documents.
Reporting obligation: Before January 30 every year, the foreign branch is responsible for sending a report according to the form of the Ministry of Industry and Trade on its activities in the previous year by mail to the Licensing Agency.
Tax obligations: Implement accounting regime according to Vietnamese law; In case it is necessary to apply another common accounting regime, it must be approved by the Ministry of Finance of the Socialist Republic of Vietnam.
License term: The license to establish a branch of a foreign trader is valid for 05 years but does not exceed the remaining term of the Business Registration Certificate or equivalent document of the foreign trader in this case. If that document has a deadline. Foreign traders may extend their Representative Office Establishment License or Branch Establishment License upon the expiration of the term specified in the License.
Set up a branch of company in Vietnam service of Viet An Law
Legal advice on conditions for establishing branches of Vietnamese companies;
Consulting foreign companies on conditions and procedures for establishing foreign company branches in Vietnam;
Support in drafting dossiers and documents to apply for and extend branch establishment licenses;
Representing clients, submitting applications, and tracking documents from state water agencies;
Consulting on tax obligations for branches;
Service of registering changes in branch operations;
Answering legal issues during the branch establishment process as well as after the branch comes into operation;
If you have any questions or need legal service support related to branch establishment or business establishment, please contact Viet An Law Firm for the best support!
Disclaimer: This article was last updated in May 2024. Laws may have changed since then. Please contact Viet An Law to confirm the information in this article is current and for any legal assistance.
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