Vietnam in recent years has been an attractive destination for foreign investors, through the establishment of representative offices or branches to explore the market and carry out a number of commercial activities of investors besides establishing new companies or participating in capital contribution or business cooperation. However, the establishment of foreign branch in Vietnam requires compliance with certain procedures and conditions to obtain approval from the licensing agency. So, how are these contents regulated? Please follow the article below.
1. Regarding the form of foreign branch in Vietnam
Branches of foreign traders in Vietnam are dependent units of foreign traders, established and operating commercially in Vietnam in accordance with the provisions of Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a member.
According to the demands and requests of traders, the establishment of branches of foreign traders in Vietnam is licensed according to regulations. The license for establishment of foreign branch is valid for 05 years, however, not exceeding the remaining term of the Business Registration Certificate or documents of equivalent value of the foreign trader in the case of documents having a time limit.
2. Conditions for issuance of Licenses for establishment of foreign branch in Vietnam
Foreign traders will be issued a Licenses for establishment of foreign branch in Vietnam when they meet the following conditions:
– The foreign trader 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;
– The foreign trader has come into operation for at least 05 year from the date of establishment or registration;
– The Certificate of Business registration or equivalent document is valid for at least 01 more year from the date of submission of the application;
– The 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;
– Where the businesses of the branch is inconsistent with Vietnam’s Commitments or the foreign trader is not located in one of countries or territories being parties to treaties to which Vietnam is a signatory, the branch can be established only if they obtain a prior consent of the relevant Minister for establishment of the branch.
3. Some notable content for establishment of foreign branch in Vietnam
a. Restrictions on establishment of foreign branch in Vietnam
01 foreign trader is not allowed to establish more than 01 branch with the same name within a province or centrally run city.
b. Branch representative
– The head of foreign branch must not concurrently hold the following positions:
+ Head of representative office of another foreign trader;
+ Head of representative office of the same foreign trader;
+ Legal representative of an economic organization established in accordance with Vietnamese law.
– The head of foreign branch performs the function of representing foreign traders in Vietnam under authorization and must comply with Vietnamese laws related to the regime of sub-authorization for people to perform the principal’s obligations of head of foreign branch.
c. Some obligations need to be complied with after establishment
Branches of foreign traders in Vietnam have the following obligations:
– Implementing the accounting regime according to the laws of Vietnam; In case it is necessary to apply another common accounting regime, it must be approved by the Ministry of Finance of the Socialist Republic of Vietnam.
– Implementing report on branch operations in accordance with the laws of Vietnam.
– Other obligations as prescribed by laws.
>> OPERATION REPORTING REGIME OF FOREIGN BRANCHES IN VIETNAM https://linconlaw.vn/operation-reporting-regime-of-foreign-branches-in-vietnam/
>> AUTHORIZED REPRESENTATIVE OF SHAREHOLDERS AS ORGANIZATION, HOW MANY PERSONS AS MAXIMUM? https://linconlaw.vn/authorized-representative-of-shareholders-as-organization-how-many-persons-as-maximum/
LINCON LAW FIRM SPECIALIZES IN SUPPORTING INVESTORS AND PROVIDING IN-DEPTH LEGAL ADVICE ON ESTABLISHING BRANCHES OF FOREIGN TRADERS IN VIETNAM:
– Consulting on legal regulations and procedures for establishment of foreign branch in Vietnam;
– Consulting on necessary papers and documents to prepare documents for establishment of foreign branch;
– Drafting documents to establish foreign branches;
– Authorized representative of the customer submits documents, explains, amends, supplements and receives results at the competent state agency;
– Post-establishment consulting: contracts, labor, taxes, trade promotion activities of foreign branches;
– Consulting or drafting contracts to serve the process of establishing and operating branches of foreign traders in Vietnam.
- Commercial Law 2005;
- Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of foreign traders in Vietnam promulgated on January 25, 2016.
𝐋𝐈𝐍𝐂𝐎𝐍 𝐋𝐀𝐖 𝐅𝐈𝐑𝐌 – 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐥𝐞 𝐜𝐨𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧
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