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Establishing a Branch of a Foreign Company in Vietnam

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 The establishment of branches of foreign companies in Vietnam has opened significant opportunities for business development within the country’s highly potential economic environment. These branches not only benefit from stable growth and attractive investment policies but also face legal and management challenges. Their presence plays an important role in promoting the local economy and creating added value through technology transfer and job creation.

What is a Branch of a Foreign Company?

Pursuant to Clause 1, Article 44 of the Law on Enterprises 2020, a branch is a dependent unit of an enterprise, tasked with performing all or part of the enterprise’s functions, including authorized representation. The lines of business of the branch must align with those of the parent enterprise.
A branch is not an independent legal entity but merely a part of the parent enterprise; therefore, it does not have legal personality and cannot independently bear legal liability as the parent enterprise does.

Conditions for Establishing a Branch of a Foreign Company in Vietnam

Establishing a Branch of a Foreign Company in Vietnam

A foreign enterprise is granted a License for Establishment of a Branch when it satisfies the following conditions as stipulated in Article 8 of Decree No. 07/2016/ND-CP:
– The foreign enterprise was established and registered for business in accordance with the laws of a country or territory that is a party to an international treaty to which Vietnam is a signatory, or recognized under the laws of such country or territory;
– The foreign enterprise has been in operation for at least 05 years, calculated from the date of establishment/registration;
– If the business registration certificate (or equivalent document) of the foreign trader specifies an operating term, such term must have at least 01 year remaining from the date of dossier submission;
– The scope of activities of the branch must be consistent with Vietnam’s market access commitments under international treaties to which Vietnam is a party and must align with the lines of business of the foreign trader.
In cases where the scope of activities of the branch is inconsistent with Vietnam’s commitments or the foreign enterprise is not from a country or territory that is a party to an international treaty to which Vietnam is a member, or where branch establishment is not yet regulated by specialized legal documents, the establishment of the branch requires approval from the Minister of the line ministry.

Required Dossier for Establishing a Branch of a Foreign Company in Vietnam

  • Application for issuance of a license to establish a branch (Form MD-5 issued together with Circular 11/2016/TT-BCT) signed by the authorized representative of the foreign trader;
  • Certified copy of the business registration certificate or equivalent document of the foreign trader;
  • Document appointing the head of the branch in Vietnam signed by the authorized representative of the foreign trader;
  • Certified copy of the audited financial statement or document confirming fulfillment of tax or financial obligations in the most recent fiscal year, or equivalent document issued or certified by the competent authority in the country where the foreign trader was established, proving the existence and operation of the foreign trader in the most recent fiscal year;
  • Certified copy of the Branch’s Charter of Operation;
  • Notarized copy of the passport or citizen identity card or citizen identification card of the head of the Branch;
  • Documents concerning the intended location of the Branch headquarters, including: a memorandum of understanding or lease agreement for the location, or a document proving the trader’s right to exploit or use the location for the Branch headquarters; a certified copy of documents on the specific intended location of the Branch headquarters: The branch of a foreign trader must comply with Vietnamese legal regulations on security, order, occupational safety and hygiene, and other conditions prescribed by law. The branch is not permitted to lend or sublease its headquarters.

Procedures and Sequence for Establishing a Branch of a Foreign Company in Vietnam

The procedure for establishing a branch of a foreign company in Vietnam is carried out as follows:
Receiving and processing authority:
The Ministry of Industry and Trade is the agency directly responsible for receiving and processing dossiers for the establishment of branches of foreign traders in Vietnam.
Sequence and timeline for applying for a license to establish a branch:

  • The foreign trader submits the dossier directly to the Ministry of Industry and Trade;
  • Within 3 working days, the Ministry of Industry and Trade checks the dossier and requests supplementation if it is incomplete or invalid (note: supplementation may be requested only once during the dossier processing);
  • Within 7 working days from the date of receipt of a complete and valid dossier, the Ministry of Industry and Trade issues the license to establish the branch for the foreign trader. In case of refusal, a written explanation stating the reasons for refusal must be provided;
  • Within 15 days from the date of issuance of the license, the Ministry of Industry and Trade will publish the branch’s information on the Ministry’s electronic information portal.

In particular:

  • Where the scope of activities of the branch deviates from or is inconsistent with Vietnam’s commitments, or the foreign trader is not from a country or territory that is a party to an international treaty to which Vietnam is a member, or where branch establishment is not yet regulated by specialized legal documents, the Ministry of Industry and Trade shall, within 3 working days, send a written request for opinion to the line ministry.
  • Within 5 working days from the date of receipt of the written request for opinion from the Ministry of Industry and Trade, the line ministry shall provide a written response agreeing or disagreeing with the issuance of the license to establish the branch.
  • Within 5 working days from the date of receipt of the line ministry’s written response, the Ministry of Industry and Trade shall issue the license to establish the branch for the foreign trader. In case of refusal, a written explanation stating the reasons must be provided.

Key Notes When Establishing a Branch of a Foreign Company in Vietnam

Regulations on Naming a Branch of a Foreign Company in Vietnam

Pursuant to Article 40 of the Law on Enterprises 2020, the following points should be noted when naming a branch of an enterprise:

  • The branch name must be written using Vietnamese letters, the letters F, J, Z, W, other symbols, and numerals.
  • The branch name of a foreign enterprise must include the name of the enterprise and the phrase “Branch”; no other name is permitted.
  • The branch name must be affixed or written at the branch headquarters. In addition, the branch name must be printed or written in a font size smaller than that of the enterprise name on transaction documents, dossiers, and publications.

Cost of the Dossier for Establishing a Branch of a Foreign Company in Vietnam

Pursuant to Circular 47/2019/TT-BTC, the State prescribes a fee of VND 50,000 per dossier for establishment. Enterprises may choose to pay the fee directly or through postal service.

Support Services for Establishing a Branch of a Foreign Company at BKC Law

At BKC Law, we provide comprehensive support services for establishing branches of foreign companies in Vietnam. Our experienced team of attorneys will guide you through each step of the process, from preparing necessary documents, registering with competent authorities, to complying with legal regulations and completing registration procedures. We commit to delivering dedicated and professional advice to help your enterprise smoothly and efficiently establish a branch in Vietnam.
For free legal consultation at BKC Law, you may contact our attorneys via the following information:
Phone: 0901 3333 41
Email: info@bkclaw.vn
Office in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Office in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City

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