CONDITIONS FOR ESTABLISHING FOREIGN REPRESENTATIVE OFFICE IN VIETNAM

Establishing a foreign representative office is a common form of commercial presence frequently opted for by foreign merchants upon initially entering the Vietnamese market for the purposes of market research and trade/investment promotion. However, pursuant to prevailing laws, the establishment and operation of such foreign representative office are strictly governed by specific licensing conditions.

1. Scope of application

The rules on establishing foreign representative office apply to foreign traders seeking to set up a dependent unit in Vietnam for purposes such as liaison, market research, and promoting investment or business opportunities on behalf of that trader — an RO is not permitted to directly conduct profit-generating business activities in Vietnam. The regulations cover new establishment, re-issuance, adjustment, and extension of RO licenses. Where a foreign trader operates in a sector governed by specialized legislation (e.g., banking, foreign lawyers’ organizations), that specialized legislation applies instead of the general rules.

2. Conditions for establishing foreign representative office under current regulations

To be licensed, a foreign trader generally must satisfy the following conditions:

• Be lawfully established and registered under the law of a country or territory that is a party to an international treaty with Vietnam, or otherwise recognized under that country’s law;
• Have been operating for at least one year from the date of establishment or registration;
• If the business registration certificate specifies an operating term, at least one year of that term must remain as of the date the application is filed;
• The proposed scope of activities of the foreign representative office must be consistent with Vietnam’s commitments under relevant international treaties;
• Where the proposed activities fall outside such treaty commitments, or the foreign trader is not from a treaty-member country, licensing requires the approval of the relevant specialized management ministry.

In addition, a foreign trader may not establish more than one foreign representative office bearing the same name within the same province or centrally-run city.

3. Legal procedure required for establishing foreign representative office

a. Name of procedure:

Application for License to establish representative office of a foreign trader in Vietnam.

b. Competent agency:

The application is submitted to the competent licensing authority (typically the provincial Department of Industry and Trade, or the management board of the relevant industrial park/economic zone where the foreign representative office will be based).

Within 7 working days of receiving a valid and complete application, the licensing authority decides whether to grant or refuse the license; where consultation with a specialized ministry is required, processing may take longer due to the inter-agency consultation process.

c. Outcome:

Application for License to establish foreign representative office is valid for a maximum of 5 years but not exceeding the remaining term of the foreign trader’s business registration certificate (if such term is specified). After licensing, the foreign representative office must publicly announce its establishment and register the relevant information before commencing operations.

4. Penalties for violations

The licensing authority will refuse to grant a license if the foreign trader fails to meet the statutory conditions, or if the application is filed within 2 years from the date its previous foreign representative office license in Vietnam was revoked. Foreign representative office that operates beyond its licensed scope, fails to submit periodic activity reports, or otherwise violates regulations on commercial activity management may be subject to administrative penalties, suspension of operations, or revocation of its establishment license under the laws on administrative sanctions in trade and foreign trade management.

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