Establishment of a representative office in Vietnam.

A representative office is the most convenient and practical way for a foreign company to establish a commercial presence in a country, especially when other forms of presence are complicated and slow to set up. Its drawback is that a representative office cannot carry out any direct profit-making activities.

Below, we answer common questions about the legal basics of setting up a representative office.

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A foreign trader must meet the following conditions to obtain a licence for a representative office

• The foreign trader is established and registered under the laws of a country or territory that is a party to an international treaty to which Vietnam is also a party, or under the laws of a country or territory that recognises Vietnam's legal system in this respect;
• The foreign trader has been operating for at least one year from the date of its establishment or registration;
• The foreign trader's enterprise registration certificate, or an equivalent document, remains valid for at least one year from the date of application;
• The representative office's scope of activities is consistent with Vietnam's commitments under the international treaties to which Vietnam is a party;
• If the representative office's scope of activities is not consistent with Vietnam's commitments, or the foreign trader is not headquartered in a country or territory that is a party to those treaties, the representative office may be established only with the approval of the relevant ministers and heads of ministerial-level agencies (the "relevant ministers").

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The application for a representative office comprises the following documents

• An application for a licence to establish a representative office, on the form issued by the Ministry of Industry and Trade and signed by the foreign trader's authorised representative;
• A copy of the foreign trader's business registration certificate or equivalent document, translated into Vietnamese and certified or legalised by a Vietnamese diplomatic mission or consular office abroad in accordance with Vietnamese law;
• A letter appointing the head of the representative office, translated into Vietnamese and certified in accordance with Vietnamese law;
• A copy of the audited financial statements, or a certificate of fulfilment of tax and financial obligations, for the most recent financial year, or an equivalent document proving that the foreign trader exists and operates. The competent authority of the place where the foreign trader is established must issue or certify the document, which must be translated into Vietnamese and certified in accordance with Vietnamese law;
• A copy of the passport or identity card (for a Vietnamese national) or of the passport (for a foreign national) of the head of the representative office;
• Documents on the proposed location of the representative office, including:
• a copy of the memorandum of understanding (MOU), lease agreement or other document proving the right to use the location as a representative office;
• copies of documents showing that the proposed location meets the requirements on security, hygiene, occupational safety and other provisions of Vietnamese law.

Note: The parent company signs and seals all documents for the representative office application. If the parent company abroad has no seal, all documents must be consular legalised.

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Establishing a representative office involves the following steps

Step 1: Obtain the licence to establish the representative office.

Time required: 7 to 10 working days;

Step 2: Make the seal of the representative office and register the seal specimen.

Time required: 5 working days;

Step 3: Register the representative office's tax identification number.

Time required: 5 to 7 working days.

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A foreign trader is refused a licence in the following cases

• The foreign trader does not fully meet the conditions above;
• The foreign trader trades in goods or services on the list of goods and services prohibited from business under Vietnamese law;
• The foreign trader applies for a licence within two years after its previous licence to establish a representative office was revoked;
• There is evidence that the representative office would harm national defence, security, social order, Vietnam's historical traditions, culture, ethics and customs, or public health, or would damage natural resources or the environment;
• The foreign trader submits an invalid application and fails to supply the missing documents at the licensing authority's request.

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The head of a representative office is restricted in certain activities

The head of a representative office may not also hold any of the following positions:

• head of a branch of the same foreign trader;
• head of a branch of another foreign trader;
• legal representative of the same foreign trader or of another trader;
• legal representative of a business organisation established under Vietnamese law.

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Information about representative offices is published online

Within 15 working days after it issues, reissues, amends, extends or revokes a licence to establish a representative office, the licensing authority publishes the following information on its web portal:

• the name and address of the representative office;
• the name and head office address of the foreign trader;
• information on the head of the representative office;
• the number, date of issue and validity period of the licence, and the licensing authority;
• the representative office's scope of activities.

Note:

• Before 30 January each year, the representative office sends its report on the previous year's activities, on the Ministry of Industry and Trade's form, to the Department of Industry and Trade by post.
• At the request of the competent state authorities, the representative office must report, provide documents or explain matters relating to its activities.

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After establishment, a representative office must complete the following procedures

• Each year, the foreign company certifies (on the prescribed form) the salary and income of the head and employees of the representative office;
• The representative office pays personal income tax and insurance for its head and employees (if any). It should keep all tax returns, tax payment receipts and annual personal income tax finalisations for its head and employees;
• Each year, before 30 January of the following year, the representative office sends a written report on the year's activities to the Department of Industry and Trade (on the prescribed form);
• The representative office keeps a cash book recording all receipts and payments during its operation;
• The representative office applies for work permits for its foreign employees (if any);
• The representative office signs labour contracts with its head and employees;
• Other obligations under current law.