Branches of foreign traders in Vietnam are dependent units of foreign traders. They are a popular form chosen when foreign traders need to provide services but do not want to establish new companies in Vietnam. To operate legally, in addition to licensing conditions for establishment and maintenance of operations, the branches need to comply with obligations related to operational reporting. So, how is the operation reporting regime of foreign branches regulated?
1. How to determine a foreign branches 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. Obligation on operation reporting regime of foreign branches
Branches are obliged to execute the operation reporting regime of foreign branches according to the provisions of the laws of Vietnam.
The operation reporting regime of foreign branches in Vietnam is regulated as follows:
– Before January 30 every year, the foreign branch is responsible for sending a report according to the form of the Ministry of Industry and Trade on its activities in the previous year by mail to the Licensing Agency.
– Branches are obliged to report, provide documents or explain issues related to their operations at the request of competent state management agencies.
>> HEAD OF FOREIGN BRANCH, HOW IS REGULATED? https://linconlaw.vn/head-of-foreign-branch-how-is-regulated/
>> PUBLIC COMPANY ADMINISTRATION https://linconlaw.vn/public-company-administration/
3. Penalties for violations of the obligation on operation reporting regime of foreign branches
Foreign branches may be subject to administrative sanctions for violations of the obligation on operation reporting regime of foreign branches, including:
– Failure to make periodic reports or reporting dishonestly on the Branches’ operation to the competent state management agency that has issued the license according to regulations;
– Failure to report on performing the obligation on operation reporting regime of foreign branches, provide documents or explain issues related to the branch’s activities at the request of competent state management agencies;
The fine for violating the obligation on operation reporting regime of foreign branches ranges from VND 20,000,000 to VND30,000,000, depending on the behavior and severity of the violation.
- 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;
- Decree 98/2020/ND-CP regulating penalties for administrative violations in commercial activities, production and trading of counterfeit and banned goods and protecting consumer rights promulgated on August 26, 2020.
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