Establishment of representative offices of foreign traders

In 2021, the procedures for establishing a representative office of a foreign trader in Vietnam will continue to be applied according to the provisions of Decree 07/2016/ND-CP detailing the Commercial Law on representative offices of foreign traders. Foreign employees in Vietnam and Circular No. 11/2016/BCT guiding Decree 07/2016/ND-CP. In order to help foreign traders and foreign companies to facilitate legal procedures in the process of establishing a representative office of a foreign company in Vietnam, Van Luat Company summarizes the conditions and documents that need to be prepared. , procedures and services for setting up a representative office of a foreign company in Vietnam are as follows

XEM THÊM: Representative offices of foreign traders are not allowed to perform any acts

Legal basis

• Commercial Law 2005;
• Decree 07/2016/ND-CP detailing the Commercial Law on representative offices and branches of foreign traders in Vietnam;
• Circular No. 11/2016/TT-BC Guiding Decree 07/2016/ND-CP detailing the Commercial Law on representative offices and branches of foreign traders in Vietnam.

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

• Foreign traders may only be granted operation certificates of representative offices in Vietnam when fully meeting the following conditions:
• The foreign company has been established and registered for business in accordance with the laws of a country that is a party to an international treaty to which Vietnam is a member or recognized by the laws of these countries;
• The foreign company has operated in the host country for at least 01 year from the date of establishment or registration;
• In case the foreign business registration certificate stipulates the operation term, the duration of such license must be at least 01 year from the date of filing in Vietnam;
• Activities of Representative Offices: market research, trade promotion in Vietnam.
• In case the operation content of the representative office is not consistent with the commitments of Vietnam or the foreign trader is not a member of a country or territory participating in an international treaty to which Vietnam is a contracting party, the establishment of a representative office shall be carried out. Representative offices of foreign traders must be approved by ministers or heads of ministerial-level agencies in charge of specialized management (hereinafter referred to as the Minister of specialized management).

Dossier to apply for a license to establish a representative office for a foreign company include what?

1. Dossier 01 set includes:
2. a) An application form for a license to establish a representative office, made according to the form of the Ministry of Industry and Trade, signed by a competent representative of the foreign trader;
3. b) A copy of the business registration certificate or an equivalent document of the foreign trader;
4. c) The document of the foreign trader appointing/appointing the head of the representative office;
5. d) A copy of the audited financial statement or a document certifying the fulfillment of tax or financial obligations in the latest fiscal year or a paper of equivalent value issued by a competent agency or organization in the locality. established foreign traders grant or certify and prove the existence and operation of foreign traders in the latest fiscal year;
6. dd) Copy of passport or identity card or citizen identification card (if Vietnamese) or passport copy (if foreigner) of the head of the representative office;
7. e) Documents on the proposed location of the representative office’s headquarters, including:

A copy of the memorandum of understanding or agreement to rent the location or a copy of the document proving that the trader has the right to exploit and use the location to locate the representative office;

A copy of the document on the proposed location of the representative office’s headquarters as prescribed;

2. Documents specified at Point b, Point c, Point d and Point dd (for the case where the passport copy of the head of the representative office is a foreigner) Clause 1 must be translated into Vietnamese and authenticated. in accordance with the laws of Vietnam. Documents specified at Point b, Clause 1 must be certified or consularly legalized by Vietnamese diplomatic missions or consular offices abroad in accordance with Vietnamese law.

Steps to establish a representative office of a foreign trader in Vietnam

Step 1: Issuance of a license to establish a representative office of a foreign company

Completion time is from 07 – 10 working days;

Step 2: Engrave a circular seal and register the seal sample of the representative office of the foreign company

Completion time: 05 working days;

Step 3: Register for tax identification number notification of the representative office of the foreign company

Completion time: 05 – 07 working days.

Cases where the establishment of a representative office of a foreign company is not granted in Vietnam

The agency that issues the establishment license of a representative office of a foreign company in Vietnam shall not grant a license to establish a representative office of a foreign company in Vietnam in the following cases:

• Foreign traders do not fully satisfy the conditions specified above.
• Foreign traders only trade in goods and services on the List of goods and services banned from business in accordance with Vietnamese law.
• The foreign trader applies for a license to establish a representative office of a foreign company in Vietnam within 2 years from the date on which the license to establish a representative office is revoked.
• There is evidence that the establishment of a representative office of a foreign company is harmful to national defense, security, social order and safety, historical traditions, culture, morality, fine customs and traditions of Vietnam. South and the health of the people, destroy natural resources, destroy the environment.
• Submit invalid and incomplete dossiers at the request of licensing agencies.

Reporting regime for representative offices of foreign companies in Vietnam:

• Before January 30 of each year, the representative office is responsible for sending a report according to the form set by the Ministry of Industry and Trade on its activities in the previous year by post to the Department of Industry and Trade.
• Representative offices are obliged to report, provide documents or explain issues related to their operations at the request of competent state management agencies.

XEM THÊM: The process of setting up a business in Vietnam

The following procedures to establish a representative office of a foreign company in

• Open accounts for expenditure in foreign currency and accounts for expenditure in Vietnam dong to bring in foreign currency at banks licensed to operate in Vietnam and only consumer account into the activities of the representative office;
• Annually, before January 30 of the following year, the Representative Office must send a written report on its activities in the year to the Department of Industry and Trade (under the form);
• Up cash book recorded most amounts of revenues and expenditures in stages operation of representative offices;
• Labor permit application for the necessary labor countries outside made at the representative office (if any);
• Register indentured labor with the chief representative and the necessary employees of representative offices;
• Annual water company outside the mandatory recognition of wage and income (pro forma) for the chief representative and the employees of the representative office;
• Personal income tax payment, insurance for the chief representative and the employees of representative offices (if any). Note, at taxpayer saved the majority of tax returns and tax receipts agency’s national and tax settlement of annual income for the chief representative and the necessary employees of representative offices;
• Other obligations as prescribed by current law ;

Notes when establishing a representative office for a foreign company

1. About naming representative office:

• The name of the Representative Office must be written with the letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.
• The name of the representative office must bear the name of the foreign trader together with the phrase “representative office”.
• The name of the representative office must be written or attached at the head office of the representative office. The name of the representative office is printed or written in a smaller font size than the name of the foreign trader on transaction papers, documents and publications issued by the representative office.

2. Regarding the setting of the representative office’s head office address:

The location of the head office of a representative office of a foreign trader must conform to the provisions of Vietnamese law on security, order, occupational safety and health conditions and other conditions as prescribed by law. Law and Representative Offices are not allowed to lend or sublease their headquarters.

3. Management apparatus of a representative office after its establishment:

The management apparatus and personnel of the Representative Office shall be decided by the foreign trader; The employment of foreign workers in representative offices must comply with the provisions of labor law and in accordance with Vietnam’s commitments in international treaties to which Vietnam is a member.

4. Regulations on the head of a representative office
5. The head of a representative office is obliged to bear obligations before the foreign businessperson regardless of his or her activities and that of the representative office to the extent authorized by the business of the neighboring country .
6. The head of the representative office must bear responsibility for what their activities in case the practice of activities not mentioned scope are Merchants water beside authorization.
7. The head of the representative office must authorize in writing another person to exercise the rights and obligations of the head of the representative office at law when leaving Vietnam. This authorization requires the consent of the foreign businessman . The head of the representative office is still obliged to take responsibility for the exercise of the authorized rights and responsibilities .
8. Where an authorization expired but the head of representative office has not returned to Vietnam and not to authorize other persons authorized to have the right to continue to practice the rights and duties of the head office representatives in the framework has been authorized to come to the head of the representative office back to work at representative offices or to the merchant country beside appointed by another person makes the head of representative office.
9. Where the head of the representative office is not present in Vietnam more than 30 days but not authorize others to perform the rights and duties of the head of the representative office or killed, missing, temporarily If a person is incarcerated, sentenced to prison, or is prevented from losing his/her civil act capacity, the trader of a neighboring country needs to appoint another person to act as the head of the representative office.
10. The head of the representative office of one businessman countries excluding not concurrently hold the office division follows:

• The head of the branch and a merchant abroad;
• Head of the Branch of the other excepted country merchants ;
• The representatives at law of merchant countries do not count it or merchant countries not including other;
• The legal representative of an economic enterprise may be present on the market in accordance with the laws of Vietnam.

7. In the case of the head of the representative office are traders countries excluding authorized allocation combined contracts, amendments and additional contracts were concluded , the traders country no matter required to implement the authorization in writing copies for each time of contract agreement, amendment and supplementation of the signed contract .

XEM THÊM: The process of foreigners setting up businesses in Vietnam

Service of setting up a representative office for a foreign company

• Advising customers on information related to procedures for setting up a representative office for a foreign company;
• Receiving information from customers about procedures for establishing representative offices for foreign companies;
• Drafting documents related to procedures for establishing representative offices for foreign companies;
• Submit the application for the establishment of a representative office for a foreign company;
• On behalf of clients, carry out procedures for establishing representative offices for foreign companies;
• Receiving and handing over the results to the client after completing the procedures for establishing a representative office for the foreign company;
• Consulting on related issues after completing the procedures for establishing a representative office for a foreign company.