Procedures for establishment of representative office/branch of foreign trade in Vietnam

Content Summary

In the globalization, Vietnam is gradually becoming an attractive investment destination with many multinational corporations and foreign enterprises. To conduct trade promotion activities or do business in new markets, foreign traders often choose to set up their own representative offices or branches. So how are the establishment of representative offices and foreign branches regulated by Vietnamese law? Which form should foreign traders choose? AZLAW will answer all the above questions through this article.

GENERAL PROVISIONS ON REPRESENTATIVE OFFICES OF FOREIGN TRADERS IN VIETNAM

Representative offices of foreign traders in Vietnam are dependent units of foreign traders, established under Vietnamese law to study the market and carry out several trade promotion activities permitted by Vietnamese law.

CONDITIONS FOR LICENSE TO ESTABLISH REPRESENTATIVE OFFICE

Foreign traders are licensed to establish a representative office with the following conditions:

Foreign traders may establish and register their business following the laws of countries or territories participating in international treaties to which Vietnam is a party or recognized by the laws of these countries and territories. ;
Foreign traders have operated for at least 01 years from the date of establishment or registration;
In case the business registration certificate or paper of equivalent validity of the foreign trader stipulates the operation term, such time limit must be at least 01 years from the date of application submission;
The operation of the Representative Office must be consistent with Vietnam’s commitments in international treaties to which Vietnam is a signatory;
In case the operation contents of the representative office do not conform to the commitments of Vietnam or the foreign trader is not a member of a country or territory participating in an international treaty to which Vietnam is a contracting party, the establishment of a representative office shall be approved by Ministers or heads of specialized ministerial-level agencies

DOCUMENTATION FOR LICENSE FOR ESTABLISHMENT OF REPRESENTATIVE OFFICE

To apply for a license to establish a representative office, a foreign trader will prepare 01 sets of documents includes:

a) An application form for a license to establish a representative office ( according to the Form of the Ministry of Industry and Trade, signed by a competent representative of the foreign trader)

b) A copy of the business registration certificate or an equivalent document of the foreign trader;

c) The document of the foreign trader appointing the head of the representative office;

d) A copy of the audited financial statement or a written certification of the fulfilment of tax or financial obligations in the latest fiscal year or a paper of equivalent value issued by a competent agency or organization in the locality established foreign traders grant or certify and prove the existence and operation of foreign traders in the latest fiscal year;

e) Copy of passport or identity card or citizen identification card (if Vietnamese) or passport copy (if foreigner) of the head of the representative office;

f) Documents on the proposed location of the representative office’s headquarters

Note: Documents specified in items b, c, d, and e (for the case where the passport copy of the head of the representative office is a foreigner) above must be translated into Vietnamese and certified according to provisions of Vietnamese law. Documents specified in item b must be consular certified or legalized by a diplomatic mission or consular office of Vietnam.

ORDER, PROCEDURES FOR LICENSE FOR ESTABLISHMENT OF REPRESENTATIVE OFFICES

Foreign traders can submit dossiers directly or by post or online (if eligible) to the licensing agency:

In case the representative office is located outside an industrial park, export processing zone, economic zone, or high-tech zone, the foreign trader will send the dossier to the Department of Industry and Trade of the provinces and centrally-run cities.
In case the representative office is located in an industrial park, export processing zone, economic zone or high-tech zone, the foreign trader will send a dossier to the Management Board of industrial parks, export processing zones, economic zones, and high-tech zones…

Then, the Licensing Authority will examine the application and issue a license if the application is valid.

GENERAL PROVISIONS ON THE ESTABLISHMENT OF BRANCHES OF FOREIGN TRADE TRADE

A branch of a foreign trader in Vietnam is a dependent unit of a foreign trader, established and conducting commercial activities in Vietnam under the provisions of Vietnamese law or an international treaty to which the Socialist Republic of Vietnam is a member.

CONDITIONS FOR LICENSE OF BRANCH ESTABLISHMENT

A foreign trader is licensed a branch establishment when it satisfies the following conditions:
Foreign traders are permitted to establish and register their business under the laws of the countries or territories participating in international treaties in which Vietnam is a member or recognized by the laws of these countries and territories;
Foreign traders have operated for at least 05 years from the date of establishment or registration;
In case the business registration certificate or paper of equivalent validity of the foreign trader stipulates the operation term, such time limit must be at least 01 years from the date of application submission;
The operation contents of the branch establishment must be consistent with Vietnam’s commitment to open the market in international treaties to which Vietnam is a contracting party and with the business lines of foreign traders;
In case the operation content of the branch is not suitable with the commitments of Vietnam or the foreign trader is not a country or territory participating in an international treaty in which Vietnam is a member, the establishment of the branch must be approved by the Minister of specialized management.

APPLICATION FOR LICENSE OF BRANCH ESTABLISHMENT

Foreign traders prepare 01 sets of documents, including:

a) An application form for a branch establishment license (according to the Form of the Ministry of Industry and Trade, signed by a competent representative of the foreign trader);

b) A copy of the business registration certificate or an equivalent document of the foreign trader;

c) The document of the foreign trader appointing/appointing the head of the branch;

d) A copy of the audited financial statement or a written certification of the fulfilment of tax or financial obligations in the latest fiscal year or a paper of equivalent value issued by a competent agency or organization in the locality. established foreign traders grant or certify and prove the existence and operation of foreign traders in the latest fiscal year;

e) A copy of the branch’s operating charter;

f) Copy of passport or identity card or citizen identification card (if Vietnamese) or passport copy (if foreigner) of the head of the branch;

g) Documents on the proposed location of the branch office

Note: In case the representative of a branch is a foreigner, documents specified in item b, item c, item d, item e and item f must be translated into Vietnamese and authentication following the law of Vietnam. Particularly, documents specified in item b must be certified or consular legalized by diplomatic missions or consular offices of Vietnam in foreign countries under Vietnamese law.

ORDER, PROCEDURES FOR LICENSE OF BRANCH ESTABLISHMENT

Foreign traders submit dossiers directly or by post or online to the Ministry of Industry and Trade.

After receiving the application, the licensing agency will examine the application and issue a license to establish a branch if the application is valid.

FOREIGN TRADE SHOULD ESTABLISH A BRANCH OR REPRESENTATIVE OFFICE

Both Representative Office and Branch are dependent units of foreign traders in Vietnam. However, there are some differences between branches and representative offices as follows:

Criteria

Branch establishment

Representative office

Rights

– Renting the office, renting and buying the necessary and supplies for the branch’s operations.

– Recruiting Vietnamese and foreign workers to work at the Branch under Vietnamese law.

– Signing the contracts in Vietnam following the operation contents specified in the branch establishment license and accordance with this Law.

– Open an account in Vietnam dong or foreign currency at a bank licensed to operate in Vietnam.

– Remittance of profits abroad under Vietnamese law.

– Having a seal bearing the branch’s name under Vietnamese law.

– Carrying out goods purchase and sale activities and other commercial activities following the establishment license under Vietnamese law and international treaties to which the Socialist Republic of Vietnam is a signatory.

– Other rights as provided for by law.

– To operate following the purposes, scope and duration specified in the representative office establishment license.

– Renting the head office, renting and buying the necessary means and supplies for the operation of the representative office.

– Recruiting Vietnamese and foreign workers to work at representative offices under Vietnamese law.

– Open an account in foreign currency, in Vietnam dong with foreign currency origin at a bank licensed to operate in Vietnam and only use this account for the operation of the Representative Office.

– Having a seal bearing the name of the representative office under Vietnamese law.

– Other rights as provided for by law.

Obligations

– Implement the accounting regime under Vietnamese law; the Ministry of Finance’ approval is necessary to apply other accounting regimes.

– Report on the operation of the branch under the law of Vietnam.

– Other obligations as prescribed by law.

– Not to conduct profit-making activities directly in Vietnam

– To carry out trade promotion activities only within the scope permitted by this Law.

– Not to enter into contracts, to amend or supplement signed contracts of foreign traders, unless the head of the representative office has a lawful power of attorney from the foreign trader or the cases specified in Clauses 2, 3 and 4, Article 17 of the Commercial Law 2005.

– Pay taxes, charges and fulfil other financial obligations under Vietnamese law.

– Report on the operation of the representative office under the law of Vietnam.

– Other obligations as prescribed by law

Based on the needs, purposes and orientation of activities, the foreign trades can choose the appropriate form of dependent unit.

Above is some basic information about the procedures for applying for a license to establish representative offices and branches of foreign traders. In case you still need more information, please don’t hesitate to contact us via a phone number or email to receive the most timely support from AZLAW.