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Compare Representative Office with Branch of Enterprise in Vietnam

1. Legal basics

– Article 44, 45 Law on Enterprises 2020.

– Article 31 Decree 01/2021/NĐ-CP on enterprise registration.

– Circular 47/2019/TT-BTC on prescribing the rates of charges for provision of enterprise information and fees for enterprise registration and charge and fee collection, remittance, management and use.

2. Compare Representative Office with Branch of enterprise in Vietnam

CriteriaRepresentative OfficeBranch
DefinitionA Representative Office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, represents and protects the enterprise’s interests. A representative office shall not do business.A Branch of an enterprise is its dependent unit which has some or all functions of the enterprise, including an authorized representative. The business lines of a branch shall match those of the enterprise.
Dossier 1. A notification of establishment of Representative office/Branch
2. The notarized copy of the resolution or decision and the copy of the minutes of meeting of the Board of Members of the multi-member limited liability company or partnership, or of the General Meeting of Shareholders of the joint-stock company; the copy of the resolution or decision of the owner of the single-member limited liability company on establishment of Representative office/Branch.
3. A notarized copy of the identity card/citizen identity card/passport of the head of the Representative Office/Branch;
4. The notarized copy Enterprise Registration Certificate; Investment Registration Certificate (if applicable).
Quantity of dossier01
Place of issuanceBusiness Registration Office at Planning and Investment Department where located the Representative Office address of Company.
Order of processingStep 1: Submit application for establishment of Representative Office/Branch at the Business Registration Office where the Representative Office/Branch is located through the National Portal on Business Registration (https://dangkykinhdoanh.gov.vn).
Bước 2: Business Registration Office shall issue Representative Office/ Branch Registration Certificate (if the documents are valid). If the documents are invalid, Business Registration Room shall notify in writing the contents that need to be amended or supplemented to the enterprise.
Time03 working days from the date of receipt of valid documents
StampThe enterprise shall decide the type, quantity, design and content of its seal and the seals of its Representative office/Branch
The management and storage of seals shall comply with the company’s charter or regulations of the Representative office/Branch that owns the seal. Seals shall be used by enterprises in transactions as prescribed by law.
Fee- Waiver of fee for issuance of Representative Office/ Branch Registration Certificate.
- Fee for publication of registered contents of Representative Office/ Branch: 100.000 VND.

To save time learning about the law, filling out forms, waiting to submit the dossier, you can contact HT for advice and support for Setting up Representative Office and Branch.

Contact us

    • Email: hue.truong@htlaw.vn
    • Phone number: +84 935 439 454. 
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Representative office vs Branch: which one is better for foreign investor in Vietnam

1. Legal basics

    • Commercial Law No. 36/2005/QH11 dated 14/06/2005 of The National Assembly
    • Decree 07/2016/NĐ-CP dated 25/01/2016 of The Government on detailing the Commercial Law regarding Vietnam-based representative offices and branches of foreign traders.
    • Circular 143/2016/TT-BTC dated 26/09/2016 of Ministry of Finance on fees for processing applications for the license to establish representative offices of foreign trade promotion organizations or foreign traders in Vietnam, and the collection and transfer thereof.

2. The issues of granting Representative Office/ Branch Establishment licenses

CriteriaRepresentative Office Branch
Conditions to grant license- The foreign trader has been established or has registered its operation under the law of a country or territory being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
- In case the foreign trader’s business registration certificate or equivalent paper indicates its term of operation, the remaining term must be at least one year by the date of submission of the application;
- Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies (hereinafter referred to as “relevant Ministers”) have given approval for establishment of the representative office.
The foreign trader has been operating for at least one year since its establishment or business registration;The foreign trader has been operating for at least 5 years since its establishment or business registration;
The scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatoryThe scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign trader
License termRepresentative office/ Branch establishment license shall be valid for 05 years but not exceeding the remaining effective period of the Certificate of Business Registration or the equivalent (for documents having expiry date)
Order of processingStep 1: Submit the dossier directly, by post or online to the licensing agency of a locality where its representative office/ branch is planned to be located (The provincial-level Industry and Trade Department / the management board for Representative office)/ The Ministry of Industry and Trade (for Branch).
Step 2: Within 3 working days after receiving the dossier, the licensing agency shall check and request the applicant to supplement its dossier if it is neither complete nor valid. The request for supplementation to the dossier shall be made only once during the handling of the dossier.
Step 3: Within 7 working days after receiving a complete and valid dossier, the licensing agency shall grant to the foreign trader a representative office /branch establishment license or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason.
Dossier1. An application for a representative office/ branch establishment license.
2. A certified copy of the business registration certificate or equivalent paper of the foreign trader.
3. The foreign trader’s document on appointment of head of the representative office/ branch.
4. Certified copies of audited financial statements or documents proving the fulfillment of tax liabilities or financial obligations in the latest fiscal year or equivalent paper issued or certified by a competent agency or organization of the locality where the foreign trader was established proving the actual existence and operation of the foreign trader in the latest fiscal year.
5. A certified copy of the passport, people’ identity card or citizen’s identity card (for a Vietnamese) or a copy of the passport (for a foreigner) of the head of the representative office/ branch.
6. Documents on the expected location of the representative office/ branch’s office, comprising:
- A certified copy of the memo of understanding or location rental agreement or a document proving the right to use the location for opening the representative office/ branch;
- A certified copy of the document on the expected location of the representative office/ branch which comply with Vietnamese regulations on security and order, occupational safety and health and other conditions
7. A certified copy of the branch’s charter.
Place of issuanceThe provincial-level Industry and Trade Department of a locality in which a representative office is scheduled to be located outside industrial parks, export processing zones, economic zones and hi-tech parks
The management board of an industrial park, export-processing zone, economic zone or hi-tech park.		The Ministry of Industry and Trade may grant, re-grant, modify, extend or revoke the establishment license and terminate operation of a branch in case the establishment of such branch has not been regulated by any specialized legal document.
Settlement time- For normal cases: 07 working days from the date of receipt of complete and valid dossiers.
- For special cases: 13 working days from the date of receipt of complete and valid dossiers.
Fee3.000.000 VND
Note- In case the scope of operation of the representative office/branch is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory and the case in which the establishment of representative office/ branch has not yet been regulated in any specialized legal document, the licensing agency shall submit a written request for directions to the relevant Ministry before granting or refusing to grant representative office/ branch establishment licenses to foreign trader.

To save time learning about the law, filling out forms, waiting to submit the dossier, you can contact HT for advice and support for Setting up Representative Office and Branch in Vietnam.

Contact us

    • Email: hue.truong@htlaw.vn
    • Phone number: +84 935 439 454. 
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Limitations on permitted activities of representative offices of foreign traders in Vietnam

Limitations on permitted activities of representative offices of foreign traders in Vietnam

Representative office has always been a type of company formation chosen by foreign traders wishing to explore opportunities or expand their business in Vietnam due to its convenience in management and avoidance of the risks arising from local compliance procedures. However, foreign traders should carefully consider restricted activities applied to a representative office in order to avoid legal risks when operating.

Limitations on permitted activities of representative offices of foreign traders in Vietnam - htlaw.vn

I. Legal basics

Comercial Law No. 36/2005/QH11 dated 14/06/2005

Decree 07/2016/NĐ-CP dated 25/01/2016

Decree 98/2020/NĐ-CP dated 26/08/2020

II. What is a representative office of foreign investor in Vietnam?

A representative office of a foreign investor in Vietnam means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market surveys and several commercial promotion activities permitted by Vietnamese law. 

III. Permitted activities of representative office

Under Vietnamese law, though the representative office is a dependent unit of its foreign trader, it only plays a supportive role in researching market trends and conducting a number of commercial promotion activities. The representative office does not have actual “business” function; therefore its permitted activities are limited, including:

    • Acting as a liaison office;
    • Operating for researching and marketing surveys;
    • Seeking for and conducting commercial promotion activities, business partners such as entering into contracts with traders conducting commercial advertising activities; directly organizing or participating in trade fairs and exhibitions for the traders that they are representing with valid letters of authorization from foreign traders;
    • Renting offices, renting and purchasing equipment and facilities necessary for their operations;
    • Recruiting Vietnamese and expatriate employees to work for them; and
    • Opening accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to operate in Vietnam and to be allowed to use those accounts solely for their operations.

IV. Restricted activities of representative office

Besides conveniences in market research activity, the representative office is forbidden to engage in the following activities:

    • Directly conducting profit-generating activities in Vietnam;
    • Conducting sale promotions themselves or hiring other traders to conduct sale promotions in Vietnam for the traders that they are representing;
    • Directly conducting commercial advertising activities; directly organizing or participating in trade fairs and exhibitions;
    • Directly displaying and introducing goods and/or services of traders they are representing, apart from displaying and introducing at representative office.
    • Entering into contracts, amending or supplementing contracts already entered into by foreign traders, except where chief representatives obtain valid letters of authorization from foreign traders or other cases such as Renting offices, renting and purchasing equipment and facilities necessary for their operations; Recruiting Vietnamese and expatriate employees to work for them; Opening accounts in foreign currencies for their operations;
    • Issuing invoices;
    • Providing after-sale-services concerning a service or product provided by foreign traders; and
    • Carrying out activities as an agent between a client and foreign traders.

In light of the information above, foreign traders should be cautious when conducting activities through their representative office in Vietnam, especially avoiding letting the representative office carry out profit-generating activities. Carrying out former restricted activities may lead to revocation of the right to use Representative office Establishment license.

To save time learning about the law, filling out forms, waiting to submit the dossier, you can contact HT for advice and support for Setting up representative office.

Contact us

    • Email: hue.truong@htlaw.vn
    • Phone number: +84 935 439 454. 
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Set up representative offices for foreign investors in Vietnam

REPRESENTATIVE OFFICES
htlaw - Representative offices for foreign investors in Vietnam
htlaw - Representative offices for foreign investors in Vietnam

I. What is a representative office of a foreign investor in Vietnam?

A representative office of a foreign investor in Vietnam means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law. 

II. Requirements for grant of Licenses for establishment of representative offices

Foreign businesses shall be granted Licenses for establishment of offices if they satisfy the following requirements:

    1. The foreign investor is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
    2. The foreign investor has come into operation for at least 01 year from the date of establishment or registration;
    3. The Certificate of Business registration or equivalent document is valid for at least 01 more year from the date of submission of the application;
    4. The scope of operation of the representative office is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory;
    5. Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign investor is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies (hereinafter referred to as “relevant Ministers”) have given approval for establishment of the representative office.

III. The power to grant of Licenses for establishment of representative offices

    1. The Department of Industry and Trade of the province where the representative office is expected to be located outside industrial parks, export-processing zones, economic zones or hi-tech zones.
    2. Management Boards of industrial parks, export-processing zones, economic zones or hi-tech zones (hereinafter referred to as Management Boards) where the representative office is expected to be located in industrial parks, export-processing zones, economic zones or hi-tech zones.

IV. Order of granting representative offices establishment license

Step 1: Submit your application in person or by post to the licensing agency

Step 2: The licensing agency shall examine such application and request the applicant to complete their application from the date of receipt of the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of such application.

Step 3: The licensing agency shall send the applicant a written notification of whether the license or establishment of the representative offices is granted. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

Note: Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign investor is not located in the country or territory being party to treaties to which Vietnam is a signatory or the establishment of representative offices that has not prescribed by specialized legislative documents, the licensing agency shall submit a written request for directions to the relevant Ministry before deciding to grant or not grant a representative office establishment license to a foreign investor.

V. Dossiers

    1. An application form for license for establishment of the representative office
    2. Copies of the Certificate of Business Registration or equivalent documents of the foreign trader
    3. A letter of appointment of the head of the representative office
    4. Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign investor issued or certified by competent authorities where such foreign trader is established
    5. Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office
    6. Documents on the expected location of the representative office including:

– Copies of memorandum of understanding or leasing agreements or documents as proof of the right to use a location as the office representative

– Copies of the document on the proposed location of the head office meeting the provisions of Vietnamese law on security, order, and occupational safety and health conditions.

Note:

– Copies of the Certificate of Business Registration or equivalent documents of the foreign trader shall be certified or legalized by overseas diplomatic missions or Consulates of Vietnam, translated into Vietnamese and certified true in accordance with laws of Vietnam.

– Documents No. 3, 4, 5 (for the case where the passport copy of the head of the representative office is a foreigner) shall be translated into Vietnamese and certified true in accordance with laws of Vietnam.

VI. Settlement time

– Normal cases: 7 working days from the date of receipt of complete and valid dossiers.

– Special cases: 13 working days from the date of receiving complete and valid dossiers

VII. Fees

3.000.000 VND

If you wonder about setting up a company, representative office, or branch, you can contact us to for a consultation. 

To save time learning about the law, filling out forms, waiting to submit the dossier, you can contact HTLaw for advice and support for Presentative office establishment for foreign investor .

Contact us

    • Email: hue.truong@htlaw.vn
    • Phone number: +84 935 439 454. 
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Process of establishment of representative offices in Vietnam

htlaw - ESTABLISHMENT OF REPRESENTATIVE OFFICES IN VIETNAM
htlaw - ESTABLISHMENT OF REPRESENTATIVE OFFICES IN VIETNAM

A representative office is a dependent unit of the enterprise, which has the task of representing by authorization the interests of the enterprise and protecting those interests. Representative offices do not perform the business functions of enterprises. (Article 44 Enterprise Law 2020).

Thus, the main function of the Representative Office is to perform the duties of an authorized representative for the Enterprise. Depending on the purpose of the Enterprise when expanding its business activities, it is decided to establish a Representative Office or Branch or Business Location accordingly.

In this article, the legal consultants of HT INVESTMENT & IMMIGRATION CO., LTD will focus on analyzing and guiding the implementation of necessary steps to apply for a license to establish a Representative Office so that they can actually operate in accordance with the provisions of the law.

1.The legal basis for the establishment of a representative office

Enterprise Law 2020, Articles 44, 45, Representative offices

2. The papers and documents to be prepared to apply for a license to establish a representative office

1/ Notice of representative office registration

2/ A copy of the establishment decision and a copy of the meeting minutes on the establishment of the branch or representative office of the enterprise; copies of legal papers of the individual for the head of the branch or representative office

3/ A copy of the business establishment license; Investment registration license (if any)

3. The process of applying for a representative office establishment license

Dossier-receiving agency: Business Registration Office, Department of Planning and Investment, where the Representative Office is established

Number of records: 01 set

Time: 03 working days if the application is valid

Procedure for submitting applications

    1. Register online on the National Business Registration Portal and get a Receipt of Receipt
    2. Submit the prepared paper application to the application-receiving place with the results of the previous online application

Result: Certificate of operation registration of representative office for the enterprise

4. The seal of the Representative Office

Enterprises decide on the type of seal, quantity, form and content of the representative office’s seal.

The management and keeping of the seal shall comply with the provisions of the company’s charter or regulations promulgated by the representative office of the enterprise with the seal. Enterprises use seals in transactions as prescribed by law.

To save time learning about the law, filling out forms, and submitting documents, you can contact HTLaw for consultation and legal services related to Establish Representative Office.

Contact us

    • Email: hue.truong@htlaw.vn
    • Phone number: +84 935 439 454. 
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PROCEDURE FOR ESTABLISHING THE REPRESENTATIVE OFFICE OF COMPANY IN VIET NAM

A representative office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, represents and protect the enterprise’s interests. A representative office shall not do business. (Article 44 Enterprise Law 2020).

Thus, The Representative office’s function is obliged to represent under the company authorization. Depend on the company’s purposes, investors set up the Representative office or the Branch or Business location on suitable.

In this writing, these
legal consult experts of HT INVESTMENT & IMMIGRATION CO., LTD shall focus on analysing
and guiding the necessary procedure to apply for The Representative Office
Registration Certificate so that The Representative office can do business
activities suitable with the law.

Firstly, the legal basis to set up the Representative Office

  • Enterprise Law 2020, Article 44, 45, Representative office

Secondly, the documents to apply for Representative Office Registration Certificate

1/ Notice of registration activities of Representative Office;

2/ Copies of the Establishment Decision and minutes of the meeting on the establishment of the enterprise’s branch/representative office, legal documents of the head of the branch/representative office.

3/ The notarized copy Enterprise Registration Certificate; Investment Registration Certificate (if have).

Thirdly, the procedure to apply for Representative Office Registration Certificate

Place of Issue: Business Registration Room at Planning and Investment Department where located the Representative Office address of Company

Quantity of dossier: 01

Timeline: 03 business day if valid

Steps apply for dossier:

Register online on National Registration Enterprise online System and receive the Receipt register online.

Hand in documents and the Receipt register online to the Place of Issue above.

Result: Representative Office Registration Certificate.

Fourthly, stamp of the Representative Office

The enterprise shall decide the type, quantity, design and content of its seal and the seals of its representative offices.

The management and storage of seals shall comply with the company’s charter or regulations of the representative office that owns the seal. Seals shall be used by enterprises in transactions as prescribed by law.