Establishing a foreign trader’s representative office in Vietnam

Establishing a representative office in Vietnam is one of the options that many foreign companies choose when they want to access and explore the Vietnamese market in their business field.

In this article, we will guide in detail the conditions, procedures, and precautions to note when establishing a representative office in Vietnam.

  1. Legal basic 

Commercial Law 2005
Decree 07/2016/ND-CP detailing the Commercial Law on foreign trader’s representative office in Viet Nam 
Circular No. 11/2016/BTC guiding Decree 07/2016/ND-CP
  1. Conditions for establishing a representative office in Viet Nam

  • Foreign companies have operated in their home country for at least 01 year, from the date of establishment or registration
  • In the case of the foreign business registration certificate specifying the operating period, the validity of that license must be at least 01 year from the date of submission of the file in Vietnam
  • The scope of activities of the representative office: performing liaison functions, market research, promoting and enhancing investment and business opportunities of the represented trader.
  1. Conditions for the head of the representative office

  • Not be concurrently the head of a branch of the same foreign trader or the head of a branch of another foreign trader.
  • Not be the legal representative of the foreign trader or another foreign trader.
  • Not be the legal representative of an economic organization established under the provisions of Vietnamese law.
  1. Documents required for establishing a representative office

  • A proposal to establish a representative office of the foreign company in Vietnam according to the form of the Ministry of Industry and Trade;
  • Legalized consular and translated foreign business registration certificate;
  • Documents appointing the head of the foreign trader’s representative office;
  • Certified translation of audited financial statements or written confirmation of the tax or financial obligations for the previous fiscal year;
  • Passport of the head of the representative office
  • Documents related to the planned location of the representative office, including:
  • A lease agreement for the office and its authenticated copy;
  • Certified copy of the land use the right certificate of the lessor (if the leased property belongs to an enterprise that needs to provide a certificate of business registration with the function of real estate business);
  • In addition, the location of the foreign trader’s representative office must comply with the provisions of Vietnamese law.
  1. Steps to establish a representative office in Vietnam:

  • Apply for a license to establish a representative office of a foreign company. 

The processing time is 10-15 working days and the issuing authority is the Department of Industry and Trade of the province, centrally-run city or Industrial Park Management Board for representative offices located in industrial parks, export processing zones, economic zones, and high-tech zones.

  • Have a round seal made and register the seal sample for the representative office of the foreign company

The processing time is 05 working days and the issuing authority is the provincial kor city police department.

  • Register for tax code issuance announcement for the representative office of the foreign company. 

The processing time is 05-07 working days and the issuing authority is the direct tax management agency.

  • Open a bank account for the representative office: 

The representative office can open a foreign currency and a Vietnamese dong account with foreign currency origin at a bank licensed to operate in Vietnam. This account can only be used for the activities of the representative office.

  1. Labor permit, PIT obligation, and social insurance obligation for the head of the representative office and Vietnamese employees working for the representative office:

  • Foreigners appointed as the head of the representative office must apply for a labor permit in Vietnam before starting to work.
  • The head of the representative office and employees of the representative office must declare personal income tax obligations when there is income generated in Vietnam, regardless of whether the representative office pays for it or not.
  • Foreigners and Vietnamese employees who sign contracts with the representative office must participate in mandatory social insurance.

The above is the advice of Quan Lieu Joint Stock Company on the conditions, procedures, and steps to establish a representative office of foreign traders in Vietnam. If there are any further questions that need to be answered, please contact us.

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