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Conditions and Procedures for Establishing a Branch of a Foreign-Invested Company in Vietnam

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Establishing a branch of a foreign-invested company in Vietnam requires meeting numerous detailed conditions and procedures to ensure compliance with legal regulations and to protect the interests of both foreign investors and the Vietnamese market. This is a complex process that demands enterprises have a clear understanding of the requirements and related procedures. The following article provides a clear analysis of the conditions and procedures for foreign investors to easily carry out investment activities in Vietnam.

Conditions for Establishing a Branch

Conditions and Procedures for Establishing a Branch of a Foreign-Invested Company in Vietnam

Continuous Operation for at Least 5 Years

A foreign enterprise wishing to establish a branch in Vietnam must have been continuously operating for at least 5 years from the date it was granted a business license in its home country. This requirement ensures that the enterprise has a stable operating history and sufficient experience in the market before expanding its business abroad.

Remaining Validity of Business License of at Least 1 Year

If the parent company’s business registration certificate specifies an operating term, the remaining validity must be at least 1 year from the date of submission of the branch establishment application. This ensures that the parent company can continue to support the branch in Vietnam during its operation.

Business Lines of the Branch

The business lines of the branch must be based on the main business lines of the foreign enterprise. This ensures that the branch does not expand beyond the capacity and expertise of the parent company, while remaining consistent with international commitments and Vietnamese law.

Compliance with International Treaties

The branch’s operations must comply with international treaties to which Vietnam is a party. This ensures that foreign enterprises do not infringe upon market rights or violate agreements Vietnam has signed internationally.

Country of the Parent Company Must Be Covered by an International Treaty

The foreign enterprise must originate from a country or territory covered by an international treaty to which Vietnam is a party, or be recognized under Vietnamese law.

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Procedure for Establishing a Branch of a Foreign-Invested Company in Vietnam

Conditions and Procedures for Establishing a Branch of a Foreign-Invested Company in Vietnam

Dossier for Branch Establishment

To establish a branch of a foreign-invested enterprise in Vietnam, the enterprise must prepare a complete dossier including the following documents:

– Notice of branch establishment: This notice declares to the competent authority the establishment of the branch and provides necessary information related to the branch’s operations.
– Application for issuance of branch establishment license: This is the main document requesting the competent authority to issue the license for branch establishment. It includes information about the parent company, reasons for establishing the branch, and other detailed information.
– Decision on branch establishment by the owner/Board of Directors: This is the official decision from the parent company to expand business abroad through the establishment of a branch.
– Minutes of meeting on branch establishment: For enterprises with a members’ council or board of directors management model, minutes of the meeting approving the branch establishment decision are required.
– Document appointing the head of the branch: This is the document appointing the legal representative of the branch in Vietnam, who is responsible for all branch activities in the locality.
– Documents proving the right to use the branch office location: The enterprise must provide evidence of lawful use of the proposed branch office location.
– Certified copy of the parent company’s business license: This is a notarized copy of the parent company’s business license, proving its legal status.
– Certified copy of personal identification documents of the branch head: Documents such as citizen identity card, citizen identity card, or passport of the branch head must be provided and notarized.
– Audited financial statements for the most recent fiscal year: This document proves the parent company’s stable financial operations.

Note: Documents provided from abroad must be consular legalized and translated into Vietnamese before submission.

Processing Procedure for Establishing a Branch of a Foreign Company in Vietnam

Submission of Dossier to the Ministry of Industry and Trade

The complete dossier shall be submitted to the Ministry of Industry and Trade for examination and review. Upon receipt of the dossier, the Ministry of Industry and Trade will check the validity and completeness of the documents within 3 working days.

– If the dossier is incomplete or non-compliant, the enterprise will be requested to supplement it once.
– If the dossier is complete and valid, within 7 days, the Ministry of Industry and Trade will issue the branch establishment license.

Cases Requiring Opinions from Specialized Ministries

In certain special cases, the Ministry of Industry and Trade may forward the dossier to specialized ministries for opinions. This process may take 10 to 15 days.

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Key Notes When Establishing a Branch

– Prohibition on leasing or lending the branch office: The branch is not permitted to lease or lend out the registered principal office location.
– License validity period is 5 years: The branch operation license has a maximum term of 5 years but must not exceed the remaining validity period of the parent company’s business license.
– Annual activity reporting: Before January 30 each year, the branch must submit an activity report to the licensing authority.

Frequently Asked Questions When Foreign Investors Establish a Branch in Vietnam

Is the procedure for establishing a branch complicated?

The process of establishing a branch can be quite complex if the enterprise does not fully understand the legal regulations. However, using legal consultation services will help the enterprise complete the process quickly and accurately.

How long does it take to process the dossier?

The dossier processing time usually ranges from 10 to 15 days, depending on whether opinions from specialized ministries are required.

How long is the branch license valid?

The branch operation license has a maximum term of 5 years but must not exceed the remaining validity period of the parent company’s business license.

What should be noted during operations?

The branch must comply with regulations on annual activity reporting and update any changes related to license information throughout its operation. Establishing a branch for a foreign-invested enterprise in Vietnam offers many attractive business opportunities; however, strict compliance with legal regulations and conditions is essential to avoid legal risks.

Investment Consultation Services Provided by BKC Law

The comprehensive investment law consultation service at BKC Law provides an all-in-one solution for investors, including advice on legal regulations, support for enterprise establishment, optimal investment structuring, and contract drafting. We also assist in completing necessary legal procedures, resolving disputes if they arise, and ensuring compliance with legal regulations throughout the investment process, helping investors save time and effort in managing and developing investment projects.

With a team of senior lawyers with many years of experience, solid legal knowledge, and strong bilingual consultation capabilities, BKC LAW is confident in being one of the best legal partners on the market to support foreign investors in carrying out investment activities in Vietnam.

To receive free legal consultation at BKC Law, please contact our lawyers using the following information:

Telephone: 0901 3333 41
Email: info@bkclaw.vn
Branch in District 1: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, District 1, Ho Chi Minh City
Branch in Binh Tan: 41 Ten Lua Street, Binh Tan District, Ho Chi Minh City

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