Service of establishing representative office of foreign company in Vietnam

Vietnam is becoming an attractive destination for international companies thanks to its fast-growing economy and favorable investment environment. Establishing a representative office of a foreign company in Vietnam helps foreign companies access the market, build partnerships and seize business opportunities. This process requires compliance with legal regulations, but brings many strategic benefits in expanding operations and increasing presence in the Southeast Asian region.

Representative office of foreign traders in Vietnam

A representative office of a foreign trader in Vietnam is a dependent unit of a foreign trader, established in accordance with the provisions of Vietnamese law to research the market and carry out a number of trade promotion activities permitted by Vietnamese law.

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Rights and obligations of representative office

Rights of Representative Office:

According to Article 17 of the Commercial Law 2005 , the rights of a representative office are as follows:

Operate for the correct purposes, scope and duration specified in the license to establish the Representative Office;

Rent headquarters, rent and purchase necessary equipment and supplies for the operations of the Representative Office;

Recruiting Vietnamese and foreign employees to work at the Representative Office in accordance with the provisions of Vietnamese law;

Open an account in foreign currency or Vietnamese Dong with foreign currency origin at a bank licensed to operate in Vietnam and only use this account for the operations of the Representative Office;

Have a seal bearing the name of the Representative Office according to the provisions of Vietnamese law; Other rights according to the provisions of law.

Obligations of representative office:

According to Article 18 of the Commercial Law 2005 , a representative office has the following obligations:

Not allowed to conduct direct profit-making activities in Vietnam;

Only carry out trade promotion activities within the scope permitted by this Law;

Not to enter into contracts, amend or supplement contracts already entered into by foreign traders, except in cases where the Head of the Representative Office has a legal authorization letter from the foreign trader or in other cases as prescribed by law;

Pay taxes, fees, charges and fulfill other financial obligations as prescribed by Vietnamese law;

Report on the activities of the Representative Office according to the provisions of Vietnamese law,

Other obligations as prescribed by law.

Conditions, documents and procedures for establishing a representative office of a foreign company in Vietnam

Conditions for establishing a representative office of a foreign company in Vietnam

To enjoy the benefits always come with conditions. Establishing a representative office of a foreign company in Vietnam is no exception to that rule. Foreign individuals and organizations who want to be recognized by law and granted a certificate to establish a representative office must comply with the conditions specified in Article 7, Chapter 2, Decree 07/2016/ND-CP.

Conditions for establishing a representative office of a foreign company in Vietnam are as follows:

– Foreign individuals and organizations must be established and registered to do business in accordance with the regulations of the country or territory or must be effective in Vietnam.

– Has been in production and business for at least one year since establishment.

 – If the business establishment dossier of a foreign individual or organization has a limited operating period, that period must be at least one year.

– Representative offices established by foreign individuals and organizations must have activities consistent with Vietnam’s commitments.

– If the content of the activities is not suitable, foreign individuals and organizations establishing representative offices must obtain approval from the Minister of the specialized management ministry.

Documents for establishing a representative office of a foreign company in Vietnam

According to Article 10 of Decree 07/2016/ND-CP , the dossier for granting a license to establish a representative office of a foreign trader includes:

• Application for a License to establish a Representative Office (sample file of the Ministry of Industry and Trade) signed by an authorized representative of the foreign trader;
• Copy of Business Registration Certificate or equivalent document of foreign trader;
• Decision of foreign trader on appointing/designating the head of Representative Office;
• A copy of the financial report (audited) or a document confirming the fulfillment of tax or financial obligations in the most recent fiscal year or a document of equivalent value issued by a competent authority or organization where the foreign trader is established;
• Copy of passport (if foreigner) of the head of the Representative Office; or copy of ID card/citizen identification card (if Vietnamese citizen);
• Memorandum of Understanding or lease agreement for the location of the representative office,
• Copy of legal documents on the proposed location of the new headquarters of the Representative Office in accordance with relevant laws.

Procedures for establishing a representative office of a foreign company in Vietnam

Step 1: Traders prepare information and documents for establishing a representative office.

Step 2: Prepare documents to establish a representative office to the Department of Industry and Trade

Step 3: Department of Industry and Trade reviews the application for establishing a representative office of a foreign company.

Step 4: Receive certificate of registration of foreign company representative office

Step 5: Submit notification of foreign company representative office activities

Procedures after establishing a representative office of a foreign company in Vietnam

• Open a bank account for the Representative Office. The Representative Office’s account is only used to receive salaries and other operating expenses of the Office.
• Submit activity reports to the Department of Industry and Trade as prescribed;
• Comply with accounting standards as prescribed;
• Sign labor contracts and apply for work permits for foreign employees working at the Representative Office (if any);
• Make reports and settle personal income tax for the Office School and the Office’s employees;

Service of establishing Representative Office of foreign company in Vietnam provided by BKC Law

With a team of experienced lawyers, solid legal knowledge and good bilingual consulting ability, BKC LAW is confident to be one of the best legal partners in the market to support the services of establishing Representative Offices of foreign companies in Vietnam.

For free legal advice at BKC Law, you can contact our Lawyers with the following information:

Phone: 0901 3333 41

Email: info@bkclaw.vn

District 1 Office:  9th Floor, Diamond Plaza Building, 34 Le Duan, District 1, Ho Chi Minh City

Binh Tan Office: 41 Ten Lua, Binh Tan District, Ho Chi Minh City

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