NOTES ON FOREIGN REPRESENTATIVE OFFICE ESTABLISHMENT IN VIETNAM

Foreign traders have the right to invest in Vietnam through the establishment of a representative office (RO). Before making decision on foreign representative office establishment in Vietnam, in addition to considering the circumstances, market, culture, and local business environment, factors such as laws and specific regulations for foreigners also need to be carefully examined.

To be granted a license for foreign representative office establishment in Vietnam, traders need to fully meet the prescribed conditions

Foreign traders shall be granted license for foreign representative office establishment if they satisfy the following requirements:

– 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 01 year from the date of establishment or registration;

– The Certificate of Business Registration or the equivalent document is valid for at least 01 more year from the date of submission of the application;

– The scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatory;

– Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies have given approval for establishment of the representative office.

Foreign traders may not be granted license for foreign representative office establishment in some cases

The licensing agency shall refuse to grant the license for foreign representative office establishment  in the following cases:

– The foreign trader fails to satisfy one of requirements stipulated for applications for licenses or establishment of representative offices;

– The foreign trader applies for the license or establishment of the representative office or branch within 02 years from the date of revocation of the license or establishment of the representative office;

– Foreign representative office establishment subjects to restrictions from the establishment of representative offices for reasons of national defense and security, social order, social ethics and community health.

– Cases restricted by provisions of laws.

The number of foreign representative offices is restricted according to legal regulations

One foreign trader is not allowed to establish more than one representative office with the same name within the jurisdiction of a province or centrally-run city.

The head of a foreign representative office is not allowed to concurrently hold a number of positions according to regulations

The head of a representative office shall not concurrently hold the following titles:

– The head of a branch of the same foreign traders;

– The head of a branch of another foreign trader;

– The legal representative of the same foreign trader or others;

– The legal representative of a business organization incorporated in accordance with Laws of Vietnam.

Foreign representative offices in Vietnam can only operate within the permitted scope

Based on the current Commercial Law regulations, establishing a foreign representative office in Vietnam aims to explore the market and conduct certain trade promotion activities permitted by Vietnamese law, acting as a dependent unit of the foreign trader.

Foreign representative offices are not allowed to engage in profit-generating activities directly in Vietnam.

>> HANDLE OF FOUNDING SHAREHOLDERS’ INSUFFICIENT CAPITAL CONTRIBUTION https://linconlaw.vn/handle-of-founding-shareholders-insufficient-capital-contribution/

>> ISSUANCE PROCEDURE OF ESTABLISHMENT LICENSE OF FOREIGN REPRESENTATIVE OFFICE https://linconlaw.vn/issuance-procedure-of-establishment-license-of-foreign-representative-office/