When it is necessary to expand the business network and increase the scale of the company’s operations to promote business operations to new markets, many companies have chosen to establish representative offices. Phapluatdoanhnghiep.vn would like to share with our customers some information surrounding the issue “ESTABLISHMENT OF A REPRESENTATIVE OFFICE OF FOREIGN COMPANIES IN VIETNAM”.
- Legal basis
- Commercial Law 2006;
- Decree 07/2016 / ND-CP detailing the Commercial Law regarding representative offices and branches of foreign traders in Vietnam;
- Circular No. 11/2016 / TT-BCT guiding Decree 07/2016 / ND-CP detailing the Commercial Law regarding representative offices and branches of foreign traders in Vietnam.
- Conditions for the establishment of a representative office of a foreign company in Vietnam
- A foreign trader may only be granted an operation certificate of a representative office in Vietnam when fully meeting the following conditions:
- Foreign companies that have been established and registered for business in accordance with the laws of the countries participating in international treaties to which Vietnam is a member or recognized by the laws of these countries;
- The foreign company has been operating in the host country for at least 1 year from the date of its establishment or registration;
- In case a foreign business registration has a term of operation, the duration of that license must be at least 1 year counting from the date of filing the dossier in Vietnam;
- Activities of the Representative Office: market research, trade promotion in Vietnam.
- In case the operation contents of the representative office are inconsistent with the commitments of Vietnam or the foreign trader does not belong to a country or territory participating in a treaty to which Vietnam is a signatory, the establishment of the Office Representative offices must be approved by Ministers, Heads of ministerial agencies in charge of specialized management (hereinafter referred to as Ministers of specialized management).
- Profile set up representative office of foreign company in Vietnam
- An application for setting up a representative office of a foreign company in Vietnam;A copy of the foreign trader’s business
- registration certificate or papers of equivalent value certified by a competent agency of the locality where the foreign company is established;
- The written appointment of the head of the representative office of the foreign company;
- Copies of audited financial statements or documents certifying the performance of tax or financial obligations in the latest fiscal year or papers of equivalent value issued by competent agencies or organizations where traders are located. established foreign grant or certify, prove the existence and operation of foreign business in the most recent fiscal year;
- Copy of passport or identity card or citizen identification card (if Vietnamese) or passport copy (for foreigner) of the head of the representative office;
- Documents on the expected location of the representative office include:
- Office lease contract and Land use right certificate of the lessor (if renting from the company, additional business registration certificate with real estate business function is required)
- In addition, the location of the representative office of the foreign company must comply with the provisions of Vietnamese law on occupational safety, order, and safety and other conditions as prescribed. under the law
- Documents need notarized translation and consular legalization
- Documents that need consular legalization and notarized translation: Business registration certificate
- Resources need to be translated into Vietnamese and notarized:
- Passport of the head of the Representative Office
- Company rules;
- Audited financial statements or documents certifying the performance of tax or financial obligations in the most recent fiscal year
Note: All documents for a license to establish a representative office are signed and sealed by the parent company. If the parent company in a foreign country has no seal, the entire dossier must be consularly legalized.
- Steps to establish representative offices of foreign companies in Vietnam
- Step 1: Grant the establishment license of a representative office of a foreign company:
- Time limit for completion from 7 – 10 working days;
- Step 2: Engrave the round seal of the representative office of foreign company
- Deadline for completion: 05 working days;
- Step 3: Issue notice of tax code to pay on behalf of the representative office of foreign companies
- Deadline for completion: 05 -07 working days.
- Cases of not licensing the establishment of representative offices of foreign companies in Vietnam:
1.The agency granting a license to establish a representative office of a foreign company in Vietnam does not grant a license to establish a representative office of a foreign company in Vietnam in the following cases:
2.The foreign business entity does not fully satisfy the above conditions.
3. Foreign traders only trade in goods or services on the list of goods and services banned from trading according to the provisions of Vietnamese law.
4. A foreign trader applies for a license to establish a representative office of a foreign company in Vietnam within 2 years from the date of revocation of the license to establish the representative office.
5. There is evidence that the establishment of a representative office of a foreign company is detrimental to national defense, security, social order and safety, historical traditions, culture, ethics, and fine Vietnamese customs. South and the people’s health, destroying natural resources, destroying the environment.
6. Submission of invalid documents and inadequate documents at the request of the licensing authority.
- Disclosure of information about the representative office of foreign companies in Vietnam
Within 15 days from the date of issuance, re-issuance, modification, renewal and revocation of the license to establish a representative office, the licensing agency shall announce on its website the contents of the stand behind:
1. Name and address of the representative office;
2. The name and address of the head office of the foreign trader;
3. The head of the representative office;
4. Number, date and duration of the License to establish the representative office, the licensing agency;
5. Content of the representative office’s activities;
6. Date of re-issue, modification, extension and revocation of the representative office establishment license.
Reporting regime on representative offices of foreign companies in Vietnam:
- Before January 30 every year, the representative office shall send a report according to the Ministry of Industry and Trade’s form on its performance in the previous year by post to the Service of Industry and Trade.
- Representative offices are obliged to report, provide documents or explain matters related to their operations at the request of the competent state management agency.
The following procedures to establish representative offices of foreign companies in Vietnam
- Open foreign currency specialized accounts and Vietnam dong special accounts with foreign currency origin at banks licensed to operate in Vietnam and only use this account for the operations of representative offices;
- Annually, before January 30 of the following year, a representative office must send a written report on its activities in the year to the Department of Industry and Trade (as per form);
- Make a cash register to record all revenues and expenditures during the operation of the representative office;
- Apply for a work permit for the foreign worker working at the representative office (if any);
- Representative office must submit annual operation report (form) and be certified by Department of Industry and Trade;
- Signing labor contracts with the Chief Representative and the employees of the Representative Office;
- Annually, the foreign company must certify the salary and income (according to the form) for the Chief Representative and the employees of the Representative Office;
- Pay personal income tax to the Chief Representative and the employees of the Representative Office (if any). Note, when paying taxes, keep all tax returns and tax receipts from state agencies and finalize annual income tax for the representative and the employees of the representative office;
Other obligations according to current law provisions;
Legal records need to be kept throughout the operation of the representative office of a foreign company in Vietnam
- Operation license;
- Seal, Seal Certificate Certificate;
- Notice of tax code paid on behalf of the representative office;
- Documents and vouchers as guided above.
Services to establish representative offices of foreign companies in Vietnam by phapluatdoanhnghiep.vn:
1. Pre-establishment consultation on issues related to the establishment of representative offices of foreign companies in Vietnam;
2. Drafting documents to establish representative offices of foreign companies in Vietnam in accordance with the requirements of the Client and the provisions of the law;
3. Apply for a license to establish a representative office of a foreign company in Vietnam;
4. Register to issue the seal and seal certificate to the representative office of foreign companies in Vietnam;
5. Register and complete the procedures for issuing Notification of tax identification number to be paid on behalf of representative offices of foreign companies in Vietnam;
6. Consult about following procedures to set up representative offices of foreign companies in Vietnam;
7. Declare personnel and labor procedures of the representative office of the foreign company in Vietnam with the Department of 8. Industry and Trade, the social insurance agency;
9. Legal consulting, representing representative office of personal income tax finalization for employees working in representative offices in Vietnam.
