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Procedures for establishment of a representative office for foreign investors in Vietnam

28/03/2024
Procedures for establishment of a representative office for foreign investors in Vietnam

Foreign investment enterprises entering the Vietnamese market often invest substantial capital along with a high-quality team to elevate our country’s economy to a new level of development and strength. Therefore, the establishment of representative offices and the development of business investment plans by foreigners in Vietnam are increasingly growing. So, what do foreign investors need to prepare and how should they proceed to comply with the regulations?

Legal basis

Articles 7, 8, and 9 of Decree No. 07/2016/ND-CP specify the Commercial Law regarding the representative offices and branches of foreign traders in Vietnam.

Regulations on the Rights to establish representative offices, branches for foreigners in vietnam

In international treaties that Vietnam participates in, the establishment of representative offices and branches by foreign investors in Vietnam is properly regulated. According to these treaties, within the jurisdiction of a province or central city, a foreign investor is not entitled to establish more than one representative office or branch with the same name.

Only one representative office is established within a province

The Department of Industry and Trade is authorized to issue licenses for the establishment of representative offices

The Departments of Industry and Trade of provinces and central cities are authorized to issue licenses for the establishment of representative offices for foreign investors.

Additionally, the Department of Industry and Trade manages the following activities:

  • Re-issuance of licenses
  • Amendment of information on the license
  • Extension of the license
  • Revocation and termination of the representative office’s operations, in case the establishment of the representative office is illegal. Therefore, foreign enterprises need to thoroughly learn the prohibited investment sectors in Vietnam as well as other regulations to avoid termination of their business operations.

Conditions for foreign companies to establish representative offices and branches

A foreign enterprise shall meet the following conditions to establish a representative office and branch:

  • In economic organizations or international treaties which Vietnam is a member, foreign companies must have been established and registered for business.
  • From the date of establishment or business registration in the home country, the foreign company must have been operational for at least one year.
  • If the foreign business registration certificate specifies a term of operation, then the term must be at least one year remaining from the date of application in Vietnam.
  • The representative office shall operate the functions stated on the license: communication office, market research, promotion of business investment opportunities,

The establishment of a Representative Office must be approved by the Minister, Head of the ministerial-level authority managing the specialized sector (hereinafter collectively referred to as the Minister of the specialized managing ministry).

Dossier for the establishment of a foreign company’s representative office in vietnam

  1. Application for the establishment of a foreign company’s representative office in Vietnam as regulated.
  2. Copy of the legal dossier of the company:
  • Business registration certificate
  • Or equivalent documents of the foreign trader verified by the competent authority where the foreign company was established.
  1. Notification of the appointment of the head of the foreign company’s representative office.
  2. Copy of the financial dossier:
  • Audited financial statements
  • Or document confirming the tax obligations, financial obligations for the most recent year.
  • Equivalent documents issued or verified by the competent authority or organization where the foreign trader was established, proving the existence and operation of the foreign trader in the most recent fiscal year.
  1.     Copy of personal documents of the head of the representative office
  • Copy of passport or identity card or citizen identity card (for Vietnamese)
  • Copy of passport (for foreigner)
  1.     Documents concerning the planned location of the representative office headquarters
  • Office lease contract and Land Use Right Certificate of the lessor (if renting from a business, additionally provide the Business Registration Certificate with real estate business function).
  • The location of the foreign company’s representative office headquarters shall comply with Vietnamese law regarding security, order, occupational health and safety conditions, and other legal requirements.

Investors should prepare the dossier properly to achieve the best results

Additionally, in the case where the head of the representative office is required documents translated and notarized as per law:

  1. A copy of the Business Registration Certificate or equivalent documents of the foreign trader is certified or legalized by the Vietnamese diplomatic or consular missions abroad as per Vietnamese law.
  2. The document from the foreign trader appointing/nominating the head of the Representative Office.
  3. Financial dossier.
  4. Copy of personal documents of the head of the representative office.

Foreign investors have been considering Vietnam as a market full of potential, and the representative office is just a step to explore the market before establishing a foreign-invested company and developing the entire investment plan later on. Therefore, to ensure sufficient operations, investors need to learn the regulations on establishing representative offices for foreign investors thoroughly. This will facilitate the process of entering the Vietnamese market significantly.