SOME ISSUES ON OPERATION OF FOREIGN TRADERS’ BRANCHES

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. Besides the initial establishment procedures, foreign traders need to pay attention to a number of issues regarding the organization and operation of foreign traders’ branches.

1. Scope of operation of foreign traders’ branches in Vietnam

Operational content of foreign trader branches according to the laws of Vietnam is as follows:

– Branches provide services in service industries, excluding service industries in which the establishment of branches in that field is regulated in specialized legal texts.

– In case the branch operates in industries and professions that are required by law to have conditions, the branch may only operate when it meets the prescribed conditions.

2. Rights and Obligations of foreign traders’ branches in Vietnam

a. Foreign traders’ branches have rights to:

– To rent offices, rent and purchase equipment and facilities necessary for their operations.

– To recruit Vietnamese and expatriate employees to work for them according to Vietnamese laws. In particular, the management apparatus and personnel of the branch are proactively decided by foreign traders. However, it should be noted that the use of foreign workers to work at the branch must comply with labor laws and in accordance with Vietnam’s commitments in international treaties to which Vietnam is a member.

– To enter into contracts in Vietnam in compliance with their operation contents specified in their establishment licenses and the provisions of this Law.

– To open Vietnam dong accounts and foreign-currency accounts at banks licensed to operate in Vietnam.

– To transfer profits overseas according to the provisions of Vietnamese law.

– To have seals bearing their own names according to the provisions of Vietnamese law.

– To conduct activities of goods purchase and sale and other commercial activities in compliance with their establishment licenses according to the provisions of Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting party.

– To have other rights provided for by law.

b. Foreign traders’ branches have 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:

+ 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.

– 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/

>> CONDITIONS FOR ESTABLISHMENT OF FOREIGN BRANCH IN VIETNAM https://linconlaw.vn/conditions-for-establishment-of-foreign-branch-in-vietnam/

>> ISSUANCE OF WORK PERMITS FOR KOREAN WORKER, DIFFICULTY IN IMPLEMENTATION? https://linconlaw.vn/issuance-of-work-permits-for-korean-worker-difficulty-in-implementation/

3. Headquarters and branch name

a. Headquarters of foreign traders’ branches in Vietnam

The location of the headquarters of foreign traders’ branches must be in accordance with the provisions of Vietnamese law on security, order, labor safety and hygiene conditions and other conditions as prescribed by laws.

Note that branches are not allowed to lend or sublease their headquarters.

b. Name of foreign traders’ branches in Vietnam

– Branch name must be written with letters in the Vietnamese alphabet, letters F, J, Z, W, numbers and symbols.

– The branch name must bear the name of the foreign trader accompanied by the phrase “Branch”.

– The name of the branch must be written or attached at the branch headquarters, printed or written in smaller font than the name of the foreign trader on transaction papers, documents and publications issued by the branch.

4. 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.