Set up a foreign representative office in Vietnam

Setting up a foreign representative office is one of the popular forms of commercial presence of foreign traders in Vietnam to survey the market and find partners. However, in reality, many foreign enterprises encounter difficulties when carrying out this procedure. To support our clients, Viet An Law Firm would like to present the following article on License to establish a foreign representative office in Vietnam.

What is a Foreign Representative Office in Vietnam?

According to Clause 2 of Enterprises Law 2020, a representative office is understood as a dependent unit of an enterprise, with the task of representing the interests of the enterprise by authorization and protecting those interests. A representative office does not perform the business functions of the enterprise.

According to Clause 6, Article 3 of Commerce Law 2005, a representative office of foreign traders in Vietnam is a dependent unit of foreign traders, established following the provisions of Vietnamese law to perform the function of market research and carry out several trade promotion activities permitted by Vietnamese law.

Licensing service for foreign representative office in Vietnam

The Licensing service for a foreign representative office in Vietnam is a crucial document issued by a competent state authority to enterprises that meet the requirements for establishing a foreign representative office. This is a vital legal foundation for a foreign enterprise’s representative office to operate legally in Vietnam.

Some key contents of the license for establishing a foreign representative office include:

• Information about foreign enterprise: name, enterprise establishment license, head office address;
• Information about the foreign representative office: name, head office address, head of office, office activities;
• Validity period of the license, number of copies of the license: establishment license. The foreign representative office has a term of 05 years but does not exceed the remaining term of the Enterprise registration certificate or equivalent document of the foreign enterprise in case such document has provisions on the term.

Conditions for granting license to establish a foreign representative office

To be granted a license to establish a Representative Office, a foreign enterprise must satisfy the conditions prescribed by law. Pursuant to Article 7 of Decree 07/2026/ND-CP, the conditions that a foreign enterprise must satisfy include the conditions for establishment, the conditions for the duration of operation and the activities of the Representative Office, specifically as follows:

• Establishment conditions: Enterprises must be registered according to the regulations of the countries.
• Duration of operation:
  • Operating for at least 1 year from the date of establishment or registration.
  • In case the registration certificate specifies a term, that term must be at least 1 year from the date of application submission.
• Scope of activities of Representative Office:
  • Must be consistent with Vietnam’s commitments in international treaties of which Vietnam is a member;
  • In case the content is not consistent with Vietnam’s commitments, the establishment of a Representative Office must be approved by the Minister or the head of the specialized management agency.

Application dossier for licensing a foreign representative office in Vietnam

According to Article 10 of Decree 07/2016/ND-CP, the application dossier for a license to establish a foreign representative office includes the following specific types of documents:

• Application for a License to establish a Representative Office drafted by Viet An Law Firm. Application form for a License to establish a Representative Office (MD-1 Issued with Circular 11/2016/TT-BCT).
• Copy of Enterprise registration certificate or equivalent documents of foreign enterprise provided by client;
• Document of foreign enterprise appointing/designating the head of Representative Office provided by the client;
• A copy of the audited financial report or a document confirming the fulfillment of tax or financial obligations in the most recent fiscal year or a document of equivalent value issued or certified by a competent authority or organization where the foreign enterprise is established, proving the existence and operation of the foreign enterprise in the most recent fiscal year provided by the client;
• Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreign) of the Head of the Representative Office provided by the client;
• Documents on the proposed location of the Representative Office provided by the client.

Procedure to apply for a license to establish a foreign representative office

Pursuant to Article 11 of Decree 07/2016/ND-CP, the application for a license to establish a Representative Office must be carried out specifically as follows:

• Competent authorities:
  • Department of Industry and Trade: office headquarters located outside industrial parks, export processing zones, economic zones, high-tech zones
  • Management board of industrial parks, export processing zones, economic zones, high-tech zones
• Method of application submission
  • Direct submission.
  • Postal service.
  • Online submission (if eligible).
• Processing time: 3 working days from the date of receipt of application
• Result: Granting a license to establish a foreign representative office, in case of refusal, state the reason.

Obligated procedures after setting up a representative office

• Annually, foreign companies must certify salaries and incomes (following the set form) to the Head of Representative Office and employees of the Representative Office;
• Pay personal income tax, and insurance for the Head of the Representative Office and employees of the Representative Office (if any). Note, when paying taxes, save the entire tax declaration form and tax receipts of state agencies and annual income tax finalization for the Head of the representative office and employees of the Representative Office;
• Every year, before January 30 of the following year, the Representative Office must send a written report on its activities in the year to the Department of Industry and Trade (according to the form);
• Prepare a cash fund book to record all revenues and expenditures during the operation of the representative office;
• Apply for a work permit for foreign workers working at the Representative Office (if any);
• Sign labor contracts with the Head of Representative Office and employees of the Representative Office;

Notes on the license for establishing a foreign representative office

In the process of preparing the dossier and carrying out the procedures for applying for a license to establish a representative office, foreign enterprises should note the following specific issues:

• Functions of the foreign representative office: The representative office’s functions include communication, market research, and promoting business investment opportunities for the trader it represents. These functions do not include sectors where the establishment of a representative office is governed by specialized legal documents. The representative office does not have the business functions of the enterprise.
• Establishment according to international commitments: Foreign enterprises can establish their representative offices in Vietnam according to Vietnam’s commitments in international treaties to which Vietnam is a member. A foreign enterprise cannot establish more than one representative office with the same name within a province or centrally-run city.
• Document submission and processing: The request for additional documents can only be made once during the entire process of handling the application.
• Documentation Requirements: All documents in the application dossier must be translated into Vietnamese, notarized, and consularly legalized according to Vietnamese law.
• Number of Dossier Sets: One set of the dossier is required to apply for the license to establish a foreign representative office in Vietnam.
• Name of the Representative Office: The office name must include the phrase “Representative Office” and be written using Vietnamese alphabet characters, including the letters F, J, Z, W, numbers, and symbols.
• Office Location: The location of the representative office must comply with Vietnamese laws regarding security, order, occupational safety, hygiene, and other legal conditions.

Set up foreign representative office service in Vietnam of Viet An Law firm

• Consulting on the functions of foreign representative offices;
• Consulting on conditions for applying for a License to establish a foreign representative office;
• Consulting on procedures for applying for a License to establish a foreign representative office;
• Consulting on application documents for the License to establish a foreign representative office;
• Consulting on the authority to grant licenses to set up a foreign representative office in Vietnam.
• Trademark registration, patent registration, industrial design registration in Vietnam for foreign traders.

If you need consultation on licensing service for foreign representative office in Vietnam from Viet An Law Firm, please contact us for the best support.