Establishing representative office of foreign companies in Vietnam

Establish Representative Office Of Foreign Companies In Vietnam
Establish Representative Office Of Foreign Companies In Vietnam

How to Establish representative office in Vietnam ? Vietnam with advantages such as political stability, strong economic growth, clear legal system, many preferred investment policies, tax incentives and business conditions…. is becoming an ideal destination for foreign investors

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Representative office – a form of trading presence in Vietnam

To have a commercial presence in Vietnam, a foreign investor can choose one of the following popular options:

  • Establishing a company with 100% foreign capital.
  • Establishing a joint venture company between Vietnam and foreign countries.
  • Establishing a branch.
  • Establishing a representative office.

Representative office: a unit depending on the parent company has the function of introducing, promoting, and researching the market … … it has no business function, and it is not allowed to sign directly economic contracts to customers that must be signed by the parent company.

When should you establish representative office in Vietnam?

Investors should choose to establish representative office over other forms of investment instead when:

  • Desiring to have a legal address to conduct unprofitable transactions with partners in Vietnam; carry out market research, promote business opportunities, and perform the function of communication.
  • When needing to pay salaries or expenses for operations in Vietnam but do not want to be involved in tax declaration or invoice issuance.
  • The representative office helps the parent company to research the market without worrying about tax issues, conducting business.
  • The parent company wants to have a simplest model of presence in Vietnam, easy to set up and control
  • Simple costs and procedures of establishing are not entangled in the investment lines.

Steps to establish representative office in Vietnam

6 Steps to open new representative office in Vietnam

7 days 7 days, 10 hours and 10 minutes

Step 1: Checking the establishment conditions of representative office in Vietnam

Make sure that your company meets the following conditions:
– Up to now, your company has been operating properly for at least 01 year in a country or territory recognized by Vietnam.
– The operating period of your company is at least 01 year from the date of filing the application for setting up a representative office in Vietnam.
– The business lines of the company as well as those of the representative office are in accordance with Vietnamese laws and / or the commitments in international treaties which Vietnam is committed to implement.

Step 2: Checking the name of representative are accepted

The name of a representative office of a foreign business in Vietnam is acceptable when it covers the following requirements:
– Written with Latin letters (including Vietnamese letters; F; Z; W; J) that can be combined with numbers and symbols.
Example: Vietnam OS TRAVEL representative office
– Beginning or ending with the term Representative Office and must also contain the name of parent company in the proper name.
For example: Representative Office in Hanoi – AP POWER Company Limited
– The name of the representative office may include the place (province, city) where the registered office is located. This part of place can be behind the text of the Representative Office or behind the proper name.
For example: Representative office – QS Spring company in Hanoi

Step 3:  Applications for Licenses for Establishment of representative offices

– An application for the establishment of a representative office of a foreign company in Vietnam contains the following documents:
– A copy of the parent company establishment registration license or corresponding papers.
– Financial statements of the most recent year (required to be audited).
– Decision of appointment of the chief of the representative office
Copy (Consular legalization) of the personal papers of the head of the representative office (Passport; ID card; Citizen card).
– Address of R.O, office lease contract (Notarized copy).
– An application form for a license to establish Representative Office (ABB Law will draft).
Explanation related to business line (if necessary).

Step 4. Submit documents of the establishment of a representative office.

Certificate of representative office in vietnam
#1. The applicant shall conduct a document review as in Step 3 and submit to the licensing agency as follows:
– Departments of Industry and Trade of province for the representative offices located in that province or city
Management boards of industrial parks, economic zones, export processing zones or high-tech zones  for representative offices whose headquarters are located in one of these zones.
#2. Check and request modifications (if any)
– After receiving the dossier, the licensing agency examines the dossier and within 03 days will issue one of the following notices: acceptance, request for amendment and supplement of documents.
Note: Announcement of document modification and supplementation is issued once
#3. Respond results
– After the application is valid as prescribed, the licensing agency (the Department of Industry and Trade, or the Management Board of the zones) will issue an official announcement of the result of the application: accept the or refuse the license
In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejection shall be specified.       
In case of licensing, the applicant will receive a license for establishment of representative office of foreign trader in Viet Nam

Step 5: Carve the seal and register the representative office seal sample.

After obtaining an establishment license, the representative office needs to carry out seal engraving and seal sample registration of the office.
Processing agency: Provincial / municipal police.
Processing time: 05-07 working days.

Step 6: Register and notify tax code

Within 10 days from the date of receipt of the Establishment License (at Step 3), the representative office must carry out the tax identification registration procedure and notify the tax code to the tax authority where Representative office located.
#Required Documents:
– A tax code registration application.
– Power of attorney.
Time: In the period from 05 to 07 working days, the tax agency will issue an announcement on tax code for the office.

Note: Cases ineligible for Licenses for Establishment of representative offices in Viet Nam

– Fail to satisfy one of requirements to establish representative office (Refer to Step 1 above).

– Although an announcement has been issued requiring amendments and supplements (at step 2), the applicant has not made additions or failed to supplement / amend the application

– The business lines of the parent company, or the one intended to be registered, belong to the  banned business lines in Viet Nam: For example: rare animals, banned substances, human organs …

– The purpose of establishment is not clear, not for the purpose of commercial activities. For example: for the purposes of politics, defense ….

– The license to establish representative office in Vietnam has been revoked within the past two years up to the time of filing the application.

Validity of License for establishment of a representative office of a foreign trader in Viet Nam.

In general, a license to establish representative office in Vietnam is valid for 5 years from the date of grant, however this period may be shorter so that it does not exceed the validity period on the Certificate of Business Registration of the parent company

In case the certificate of establishment of a representative office expires for 5 years but the parent company still has a period of operation, and at the same time still want to maintain the operation of a representative office, it is necessary to carry out the procedure for renewing the validity of the license.     

Extension of validity of a representative office establishment license

Time for implementation of extension:

30 days prior to the expiration, the representative office  must submit documents to renew the validity of the establishment license:

Required Documents
  • An application for an extension of the validity of the operation license of the representative office (AS Law will draft)
  • Business registration certificate or operation license of the parent company abroad. (Note: the remaining operating time will be related to the extension of the operation time of the registration office)
  • Financial statements of the most recent year (with audited) of the parent company abroad.
  • The copy of the establishment license of the representative office in Vietnam (the license is in need of renewal).
  • Power of attorney.
  • Decision to appoint the manager of the representative office (if there is a change).

 

Procedures of the validity extension of the establishment certificate of a representative office

  • Document examination: within 03 working days from the date of receipt. In the case, the document does not satisfy requirements of the competent authority, it is required to amend and supplement (1 time only).
  • Return the result: after examine the valid document, the licensing agency will issue an announcement of refusal of renew or approval of extension of the license within 05 working days.

The cost of the establishment of representative offices of foreign traders in Vietnam.

(The cost of establish representative office is detailed in Circular No. 47/2019 / TT-BTC August 5, 2019), specifically:

Works Cost
Enterprise registration fee: new representative office 50.000 VND
Fee for re-granting the establishment certificate of representative offices of foreign traders in Vietnam 50.000 VND
Fee for document translation from foreign language into Vietnamese 60.000 VND/ 100 words
Fee for the certificate of translated documents 10000 VND/ pages
Fee for opening a bank account of representative office Maintaining fee1.000.000 VND/ an account
Fees for setting up new representative office in Vietnam

Things to do after setting up a representative office

  • Open a bank account: a Representative Offices are only allowed to open a payment account, of which there are two accounts that need to be opened: a foreign currency account and a VND account.
  • Signing labor contracts with employees working at the Office.
  • Make payroll, accounting books, revenue and expenditure books. Confirm the payroll of the head of office and other employees annually.
  • Submit the operation report annually. Deadline is January 30 of the following year.
  • Apply for the acticity license and temporary resident card (if there are foreign workers).
  • Declare and pay personal income tax to the manager of the representative office as well as other employees in the Representative Office.
  • Pay employee insurance.
  • Apply for registration trademarks to protect the rights to names / abbreviations / products / services.

Service of setting up representative offices of ABB Law

Service Of Setting Up Representative Offices Of Ans Law 1024x684
Service Of Setting Up Representative Offices Of Ans Law 1024×684

Who is ABB Law?

ABB Law is an intellectual property law firm and an enterprise founded in 2013 by Attorney Do Ba Thich (Hanoi Bar Association).

Success Cases.

  • Setting up the representative office of Korean export processing company in the Industrial Park Que Vo – Bac Ninh.
  • Consulting factory transfer and establishing representative office of Samwua company in Thai Nguyen.
  • Extending licenses for companies and representative offices of Japanese companies in Bac Giang.
  • Doing procedures to open a representative office for a Hong Kong agricultural machine components company in Hanoi.
  • Finding an office and doing legal procedures for a Taiwanese company specializing in business management consulting to open a representative office in Ho Chi Minh City.

ABB LAW’s Service of Opening a R.O in Vietnam

•   Consulting and answering questions related to the representative office in Vietnam.

•   Advising enterprises to choose the name of the representative office.

•   Finding the appropriate office address.

•   Letting out a place to open a representative office.

•   Drafting records and preparing documents in accordance with laws.

•   Submitting and following up with your application until the results are available

  • Answering, amending, suplementing and working with competent authority to ensure the validity of documents.
  • Consulting on the following procedures (after the establishment): Tax; Labor; Visa; Temporary residence card; Contract; ect.
  • Undertaking to time of the implement of procedures.

How to contact with ABB Law?

ABB Law is headquartered in Hanoi and has two representative offices: 1 in Ho Chi Minh City and 1 in Phu Tho province.

If you would like to establish representative office in Vietnam. ABB Law can consult directly at the office of ABB Law (with no fee) or consult through the following contact information:

+ Email: info@abbfirm.com

+ Phone: +84922772222

+ Skype: abbfirm

+ Whatapps: +84922772222

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