SERVICE OF ESTABLISHING REPRESENTATIVE OFFICES OF FOREIGN BUSINESSES IN VIETNAM
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1- WHAT IS THE SERVICE OF ESTABLISHING REPRESENTATIVE OFFICES OF FOREIGN BUSINESSES IN VIETNAM?
- The service of establishing a foreign representative office in Vietnam is a service that supports foreign enterprises in carrying out procedures for applying for a license to establish and operate a representative office in Vietnam.
- The service of establishing a foreign representative office in Vietnam includes helping foreign enterprises understand legal regulations, prepare documents, submit and monitor the licensing process. At the same time, support in related issues such as tax, accounting, recruitment and office rental. The main purpose of this service is to reduce the burden of procedures. Ensure that enterprises comply with the provisions of Vietnamese law when establishing and operating their representative offices.
- The representative office of a foreign trader in Vietnam is a dependent unit of a foreign trader, established in accordance with the provisions of Vietnamese law to research the market and carry out a number of trade promotion activities permitted by Vietnamese law.
- A foreign enterprise is a company established and registered to do business in accordance with foreign law or recognized by foreign law.
2- WHAT DOES THE SERVICE OF ESTABLISHING A REPRESENTATIVE OFFICE USUALLY INCLUDE?
Representative office establishment services usually include:
a) Legal advice
Support on legal regulations related to the establishment of representative offices, including the Enterprise Law and the Commercial Law.
b) Document preparation
Guide and draft necessary documents, such as:
- Business license of the parent company (consular legalization).
- Audited financial statements.
- Decision to appoint the head of the representative office.
c) Document submission
Representing the client to work with competent authorities in Vietnam, such as the Department of Industry and Trade or relevant management agencies.
d) Registering seals and tax codes
Helping the representative office complete necessary administrative procedures.
e) Post-establishment support
Such as recruiting personnel, keeping accounting books, declaring taxes, declaring labor, and complying with other legal regulations
3- RIGHTS OF REPRESENTATIVE OFFICE IN VIETNAM
a) Operate for the correct purposes, scope and duration specified in the license to establish the Representative Office.
b) Rent headquarters, rent and purchase necessary equipment and supplies for the operations of the Representative Office.
c) Recruit Vietnamese and foreign employees to work at the Representative Office in accordance with the provisions of Vietnamese law.
d) Open an account in foreign currency or in Vietnamese Dong with foreign currency origin at a bank licensed to operate in Vietnam and only use this account for the operations of the Representative Office.
d) Have a seal bearing the name of the Representative Office in accordance with the provisions of Vietnamese law.
e) Other rights as prescribed by law.
4- OBLIGATIONS OF REPRESENTATIVE OFFICE IN VIETNAM
a) Not allowed to conduct direct profit-making activities in Vietnam.
b) Only carry out trade promotion activities within the scope permitted by this Law.
c) Not to enter into contracts, amend or supplement contracts already entered into by foreign traders, except in cases where the Head of the Representative Office has a legal authorization letter from the foreign trader.
c) Pay taxes, fees, charges and fulfill other financial obligations as prescribed by Vietnamese law.
d) Report on the activities of the Representative Office in accordance with the provisions of Vietnamese law.
e) Other obligations as prescribed by law.
5- CONDITIONS FOR ESTABLISHING REPRESENTATIVE OFFICES OF FOREIGN BUSINESSES IN VIETNAM
Foreign traders are granted a License to establish a Representative Office when meeting the following conditions:
a) Foreign traders are established and registered to do business in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a member or recognized by the laws of these countries and territories;
b) Foreign traders have been operating for at least 01 year from the date of establishment or registration;
In case the Business Registration Certificate or equivalent document of a foreign trader stipulates a term of operation, that term must be at least 01 year from the date of application submission;
c) The activities of the Representative Office must comply with Vietnam's commitments in international treaties to which Vietnam is a member;
In case the scope of activities of the Representative Office is not consistent with Vietnam's commitments or the foreign trader is not from a country or territory participating in an international treaty to which Vietnam is a member, the establishment of the Representative Office must be approved by the Minister or Head of the specialized ministerial-level agency (hereinafter referred to as the Minister of the specialized agency).
6- CASES IN WHICH LICENSE TO ESTABLISH A REPRESENTATIVE OFFICE IN VIETNAM IS NOT GRANTED
The agency granting the License to establish a Representative Office of a foreign company in Vietnam shall not grant the License to establish a Representative Office of a foreign company in Vietnam in the following cases:
a) Foreign traders do not meet the above conditions.
b) Foreign traders only trade in goods and services on the List of prohibited goods and services according to the provisions of Vietnamese law.
c) Foreign traders request to be granted a License to establish a Representative Office of a foreign company in Vietnam within 02 years from the date of revocation of the License to establish a Representative Office.
d) There is evidence that the establishment of a foreign company representative office harms national defense, security, social order and safety, historical traditions, culture, ethics, Vietnamese customs and traditions, and people's health, destroys resources, and damages the environment.
e) Submitting invalid documents and not providing sufficient documents as required by the competent licensing authority.
7- TERM OF REPRESENTATIVE OFFICE ESTABLISHMENT LICENSE IN VIETNAM
- The license to establish a representative office of a foreign trader is valid for 05 years but does not exceed the remaining term of the Business Registration Certificate or equivalent document of the foreign trader in case such document has provisions on the term.
- The term of the re-issued Representative Office Establishment License is equal to the term of the previously issued License.
- The term of the License to establish a Representative Office may be extended for no more than 5 years.
8- HEAD OF REPRESENTATIVE OFFICE IN VIETNAM
a) The Head of the Representative Office shall be responsible to the foreign trader for his/her activities and those of the Representative Office within the scope authorized by the foreign trader.
b) The Head of the Representative Office shall be responsible for his/her activities in case he/she performs activities beyond the scope authorized by the foreign trader.
c) The Head of the Representative Office must authorize in writing another person to exercise the rights and obligations of the Head of the Representative Office according to the law when leaving Vietnam. This authorization must be approved by the foreign trader. The Head of the Representative Office shall still be responsible for the exercise of the authorized rights and obligations.
In case the authorization period expires as prescribed but the head of the Representative Office has not returned to Vietnam and there is no other authorization, the authorized person has the right to continue to exercise the rights and obligations of the head of the Representative Office within the scope of authorization until the head of the Representative Office returns to work at the Representative Office or until the foreign trader appoints another person as the head of the Representative Office.
In case the head of the Representative Office is absent from Vietnam for more than 30 days without authorizing another person to exercise the rights and obligations of the head of the Representative Office or dies, goes missing, is detained, sentenced to prison, or has limited civil capacity, the foreign trader must appoint another person as the head of the Representative Office.
d) The head of a representative office of a foreign trader may not concurrently hold the following positions:
- Head of Branch of the same foreign trader;
- Head of Branch of other foreign traders;
- Legal representative of that foreign trader or another foreign trader;
- Legal representative of an economic organization established under the provisions of Vietnamese law.
9- APPLICATION FOR LICENSE TO ESTABLISH A REPRESENTATIVE OFFICE OF A FOREIGN BUSINESS IN VIETNAM
Application for license to establish representative office of foreign trader includes:
a) Application for a License to establish a Representative Office signed by an authorized representative of the foreign trader;
b) Copy of Business Registration Certificate or equivalent document of foreign trader;
c) Document of foreign trader appointing/designating the head of Representative Office;
d) A copy of the audited financial report or a document confirming the fulfillment of tax or financial obligations in the most recent fiscal year or a document of equivalent value issued or certified by a competent authority or organization where the foreign trader is established, proving the existence and operation of the foreign trader in the most recent fiscal year;
e) Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreign) of the head of the Representative Office;
f) Documents on the proposed location of the Representative Office include:
- Office lease contract;
- Notarized copy of the Land Use Rights Certificate of the lessor (if renting from a business, it is necessary to provide a Business Registration Certificate with real estate business function);
- In addition, the location of the foreign company's representative office must comply with the provisions of Vietnamese law on security, order, labor safety and hygiene conditions and other conditions as prescribed by law.
Documents specified in Point b, Point c, Point d and Point e (in case the passport copy of the head of the Representative Office is a foreigner) must be translated into Vietnamese and certified in accordance with the provisions of Vietnamese law.
Documents specified in Point b must be certified or consularly legalized by a Vietnamese diplomatic mission or consular agency abroad in accordance with the provisions of Vietnamese law.
If you do not have an address to set up a representative office, you can use our address:
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10- STEPS TO ESTABLISH A REPRESENTATIVE OFFICE OF A FOREIGN BUSINESS ENTITY IN VIETNAM
Step 1: Prepare documents
Customers will prepare documents to establish a representative office according to regulations.
Step 2: Draft documents
- Based on the information and documents provided by the customer, Golden Star will draft the documents.
- Customer checks and signs documents.
Step 3: Submit application and receive License to establish representative office
Golden Star will submit documents and receive the License to establish a representative office on behalf of the client.
Step 4: Apply for a certificate of seal registration and make a seal for the representative office.
Apply for a certificate of seal sample at the police station.
Step 5: Register tax code for representative office
Register tax code at tax office.
Step 6: Perform post-establishment tasks
- Open accounts in Vietnamese Dong and foreign currency at banks licensed to operate in Vietnam;
- Make periodic reports as prescribed.
11- WORK TO BE DONE AFTER ESTABLISHING A REPRESENTATIVE OFFICE IN VIETNAM
a) Hang the nameplate of the representative office;
b) Accounting records: Set up a cash book to record all revenues and expenditures during the operation of the Representative Office;
c) Tax declaration: Tax declaration for representative offices, tax declaration for office managers according to regulations.
d) Declare the situation of recruitment and employment.
e) Sign labor contracts with employees of the Representative Office;
g) Carry out social insurance registration procedures;
h) Apply for work permits for foreign employees working at the Representative Office (if any).
i) Report on representative office activities: Annually, before January 30 of the following year, the Representative Office must send a written report on its activities during the year to the Department of Industry and Trade (according to the form);
k) Other obligations as prescribed by Vietnamese law;
12- WHY SHOULD CUSTOMERS OUTSOURCE THE SERVICE OF ESTABLISHING A REPRESENTATIVE OFFICE IN VIETNAM?
a) Save time and effort
- When entering the Vietnamese market, foreign enterprises not only face language barriers but also face legal issues. That is why foreign enterprises should use representative office establishment services.
- The legal procedures for establishing a representative office in Vietnam are quite complicated and require in-depth understanding of legal regulations.
- Professional service providers have experience in handling these procedures quickly, helping businesses save time and avoid errors.
b) Ensure compliance with the law
- Vietnamese laws are constantly changing and updated with new circulars. This makes legal compliance complicated and potentially risky. Not only related to tax and labor, but also to many other areas such as trade, investment and resource management.
- For businesses that do not have a deep understanding of legal regulations in Vietnam like foreign businesses, ensuring everything runs smoothly can become a burden. Therefore, outsourcing the service of establishing a representative office in Vietnam will help businesses save time and minimize risks. At the same time, ensure business operations are efficient and in compliance with the law.
- Professional service providers are well versed in legal regulations and regularly updated with changes, ensuring that the representative office operates legally from the start.
- They will help businesses avoid legal risks due to lack of understanding of local laws.
c) Reduce initial operating costs
- Outsourcing services help businesses avoid the cost of building a team of legal and administrative professionals.
- These services often offer reasonable cost packages, suitable for business needs.
d) Appropriate strategic consulting
- In addition to supporting legal procedures, these units also provide strategic advice suitable for the Vietnamese market.
- They help businesses choose office locations, optimize operational plans, and develop relationships with authorities.
e) Long-term support
- After establishing a representative office, service companies often provide operational support such as accounting, tax, and administrative management.
- This helps businesses focus on core business operations.
g) Minimize cultural and language risks
Service companies often have teams that understand local culture and language, helping to connect businesses with partners and regulators more effectively.
13- GOLDEN STAR REPRESENTATIVE OFFICE ESTABLISHMENT SERVICE
When performing the service of establishing a representative office of a foreign trader in Vietnam, Golden Star will perform the following tasks:
- Pre-establishment consultation on issues related to the establishment of a Representative Office;
- Guide customers to prepare documents;
- Drafting documents to establish a Representative Office;
- Submit application for license to establish Representative Office;
- Receive a License to establish a Representative Office from the competent authority;
- Apply for a certificate of seal registration and make a round seal for the representative office
- Register tax code for Representative Office;
- Open a bank account for the Representative Office;
- Consulting on procedures and reports after establishing a Representative Office;
14- RESULTS CUSTOMERS RECEIVE WHEN USING GOLDEN STAR'S REPRESENTATIVE OFFICE ESTABLISHMENT SERVICE
When using the service of establishing a representative office for foreign traders at Golden Star, customers will receive the following results:
1) License to establish a representative office;
2) Certificate of seal sample;
3) Round mark;
4) Tax code certificate;
5) Bank account opening documents;
6) Digital signature;
7) Free consultation during the process of establishing a representative office.
15- SERVICE FEE FOR ESTABLISHING A REPRESENTATIVE OFFICE IN VIETNAM
a) Service fee for establishing a representative office (RO) for foreign traders in Vietnam from 15,000,000 VND.
b) Total cost of service to establish a representative office (RO) for foreign traders in Vietnam is from 18,000,000 VND, including state fees and Golden Star service fees.
16- WHY SHOULD YOU CHOOSE THE REPRESENTATIVE OFFICE ESTABLISHMENT SERVICE OF GOLDEN STAR ACCOUNTING COMPANY?
Customers should use the service of establishing representative offices of foreign traders in Vietnam of Golden Star Accounting Company for the following reasons:
a) Expertise and reputation
Golden Star has over 15 years of experience providing representative office establishment services, accounting services, and tax services for foreign-invested enterprises in Vietnam. This experience helps us understand the corporate culture, law, and Vietnamese market. Ensuring to provide appropriate and effective solutions for each enterprise.
When using our services, you will be advised on the regulations and procedures required to open a representative office based on your business needs and objectives. We not only help you understand the legal requirements but also provide strategic advice so you can make the right decision.
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b) Team of good lawyers and experts
With many years of experience in the field of providing services for establishing representative offices of foreign traders in Vietnam, Sao Vang has a team of experienced experts and extensive knowledge of relevant legal regulations and procedures. Ensuring that customers will be supported and consulted quickly and effectively.
In addition, our team of experts will assist you in preparing documents, submitting applications, and carrying out all related procedures. We are committed to providing convenience and ensuring that every step is in compliance with legal regulations.
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c) Save time and effort
The process of setting up a representative office involves many complicated steps. From collecting documents, preparing documents, to submitting applications and monitoring the approval process. This can be very time-consuming and labor-intensive if you do it yourself.
By hiring a full service package at Golden Star, you can transfer the burden of legal and administrative procedures to a professional team. This helps you focus on your core business activities without worrying about managing and implementing the procedures related to establishing a representative office.
The team at Golden Star has experience and understands the process, ensuring the steps are completed quickly, efficiently and accurately.
d) Reasonable and transparent costs
- Golden Star commits to providing services at competitive costs and without additional hidden fees.
- Transparency in quotes and service contracts, ensuring maximum benefits for customers.
Do you want to save time and money when carrying out procedures to establish a representative office for foreign traders in Vietnam? Golden Star's professional service of establishing a representative office in Vietnam for foreign traders will help you save time and money when carrying out procedures to apply for a license to establish a representative office.
e) Cooperation motto
We always consider our customers as strategic partners. The relationship is based on respect, trust and commitment to help businesses develop sustainably.
f) Comprehensive service
From setting up a representative office, legal advice, to management support and internal procedures. Sao Vang can meet all your needs.
g) Commitment to maximum performance
Customer satisfaction is our top priority. We strive to ensure that all services are delivered on time and to the highest quality.
17- ANSWERS TO SOME QUESTIONS RELATED TO ESTABLISHING A REPRESENTATIVE OFFICE IN VIETNAM
Question 1: What type of document can be equivalent to the Business Registration Certificate of a foreign trader?
Answer:
Depending on the regulations in the country of registration of the foreign trader, the foreign trader may have a Certificate of Incorporation or a Business License or even both.
Question 2: Do foreign traders need to be present in Vietnam when establishing a Representative Office?
Answer:
The application for establishment of a representative office is submitted directly or by post or online (if applicable) to the Licensing Authority. Therefore, foreign traders do not need to be present in Vietnam when establishing a representative office. The process of establishing a representative office only includes submitting the application, receiving the license and adjusting the application according to the requirements of the State agency (if any). Therefore, foreign traders can submit the application by post or online or through a third party such as service companies, law firms in Vietnam to represent them in submitting the application and receiving the license.
Question 3: If a foreign company does not have a seal, does the representative office establishment file need to be consularized?
Answer:
In addition to the Certificate of Registration of Foreign Company Operations, consular legalization is required according to regulations. The establishment documents signed and stamped by foreign companies do not need consular legalization.
Question 4: Does the head of the Representative Office who is a foreigner need to apply for a work permit?
Answer:
The head of a representative office of a foreign trader in Vietnam (not an international organization or non-governmental organization) will not be exempt from work permits, so the head of the representative office must apply for a work permit in accordance with Vietnamese law.
Question 5: Are representative offices subject to tax obligations?
Answer:
Representative offices are not required to declare and pay business license fees, value added tax and corporate income tax, including the case of liquidation of purchased assets of the representative office. This has also been confirmed and demonstrated in Official Dispatch 1279/TCT-CS dated April 4, 2017 of the General Department of Taxation and Official Dispatch 57837/CTHN-TTHT dated November 25, 2022 of the Hanoi Tax Department.
However, if the representative office employs and pays salaries to employees, the representative office is responsible for declaring, deducting, paying taxes to the state budget and settling taxes on taxable income paid to employees.
Question 6: What records does a representative office need to keep at the office during its operations?
Answer:
Representative offices need to keep the following documents:
- Establishment license;
- Seal, Seal sample certificate;
- Tax code certificate of Representative Office;
- Tax declaration;
- Purchase invoice;
- Accounting books;
Question 7: Can a representative office of a foreign company in Vietnam sign a commercial contract?
Answer:
The scope of activities of the Representative Office is to research the market and promote trade in Vietnam.
Therefore, the representative office of a foreign company in Vietnam is not allowed to sign and execute commercial contracts.
Question 8: Can a representative office of a foreign company collect money on behalf of customers paying foreign companies?
Answer:
The scope of activities of the Representative Office is to research the market and promote trade in Vietnam.
Therefore, the representative office of a foreign company in Vietnam is not allowed to collect payments from customers to foreign companies.
Question 9: Are representative offices of foreign traders operating in Vietnam allowed to directly conduct commercial advertising activities?
Answer:
According to regulations, representative offices of foreign traders operating in Vietnam are not allowed to directly conduct commercial advertising.
However, in case of authorization by a trader, the representative office has the right to sign a contract with a trader providing commercial advertising services to carry out commercial advertising for the trader it represents.
Question 10: The head of a representative office of a foreign trader is not allowed to hold which positions concurrently?
Answer:
The Head of a Representative Office of a foreign trader may not concurrently hold the following positions:
- Head of a branch of the same foreign trader;
- Head of branch of other foreign traders;
- Legal representative of that foreign trader or another foreign trader;
- Legal representative of an economic organization established under the provisions of Vietnamese law.
Question 11: When changing the business name of a foreign trader, is it necessary to adjust the License to establish a Representative Office?
Answer:
Have.
Foreign traders must carry out procedures to adjust the Representative Office Establishment License if there is a change in the name of the foreign trader.
Question 12: During operation, if a foreign trader wants to change the head of the Representative Office, what legal procedures must be followed?
Answer:
Information about the head of the representative office is one of the important information in the dossier for establishing a representative office, and at the same time, this is also the information shown on the license to establish a representative office of a foreign trader in Vietnam. Therefore, when changing the head of the representative office, the foreign trader must carry out the procedure to adjust the license to establish a representative office at the licensing authority of Vietnam.
Question 13: How long will the renewed Representative Office establishment license be valid for and how many times can it be renewed?
Answer:
In case of extension, the license to establish a representative office shall be valid for 05 years but shall not exceed the remaining term of the Business Registration Certificate or equivalent document of the foreign trader in case such document has a term. This means that this license shall be valid for a maximum of 05 years. However, if the Business Registration Certificate or equivalent document of the foreign trader has a term, the term of the license to establish a representative office shall comply with the term of the above documents.
Current legal regulations do not limit the number of times a representative office can renew its establishment license. However, when renewing its establishment license, a foreign trader must still submit a set of documents similar to those when establishing a new representative office (excluding documents on the appointment of the head of the representative office, legal documents of the head of the representative office and documents on the representative office headquarters), related to the conditions for the operation and license of the foreign trader abroad. Therefore, foreign traders still need to ensure these conditions when renewing their representative office establishment license.
Question 14: Can a representative office open a savings account?
Answer:
According to regulations, representative offices are not allowed to conduct direct profit-making activities in Vietnam. Opening a savings account to deposit money and receive interest is an activity aimed at generating profit for the representative office. Therefore, representative offices are not allowed to conduct this activity.
Question 15: What sanctions may a representative office that continues to operate but does not renew its license to establish a representative office be subject to?
Answer:
According to current regulations, representative offices must submit applications for renewal of their establishment licenses within 30 days before the expiration date.
In case the representative office establishment license is not renewed but continues to operate, it may be subject to administrative penalties ranging from VND 60,000,000 to VND 100,000,000.
Question 16: Can the head of the representative office in Vietnam personally sign contracts in Vietnam?
Answer:
The head of a representative office may enter into contracts on his/her own in certain cases, specifically, renting headquarters, renting or purchasing necessary facilities and equipment for the representative office's operations; recruiting Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; opening foreign currency accounts or Vietnamese Dong accounts with foreign currency origin at banks licensed to operate in Vietnam and only using these accounts for the operations of the representative office.
In other cases, the head of the representative office may only enter into contracts under the authorization of the foreign trader. The authorization of the foreign trader to the head of the representative office must be made in a power of attorney.
Question 17: Does a representative office have to fulfill its annual reporting obligations? If it fails to report annually, will the representative office be subject to any sanctions?
Answer:
As a rule, a representative office is responsible for submitting a report on its activities in the previous year to the Licensing Authority.
In case of failure to make periodic reports or dishonest reports on the activities of the representative office, the representative office may be subject to administrative penalties ranging from VND 20,000,000 to VND 40,000,000.
Question 18: Difference between Representative Office of foreign trader and branch model of foreign trader in Vietnam.
Answer:
The most fundamental difference is the ability to generate direct profits, namely:
- Representative offices are not allowed to directly conduct profit-making activities, and their activities are limited to market research and other non-profit-making activities. Therefore, representative offices are not allowed to directly enter into contracts with other companies unless authorized in writing.
- Branches can carry out trading activities and other commercial activities according to their establishment license, so branches can enter into contracts with other companies and are allowed to transfer profits abroad.
Question 19: Difference between representative office of foreign trader and subsidiary model of foreign trader in Vietnam.
Answer:
* Representative office:
- As a subsidiary unit of a foreign trader, all activities of the representative office are therefore under the management and supervision of the foreign trader;
- Representative offices of foreign traders cannot directly carry out profit-making activities, and the activities of representative offices are limited to market research and other non-profit-making activities;
- The term of operation is only within 5 years from the date of license issuance and can be renewed;
- The procedure for opening a representative office is easy, requires less paperwork and has a faster processing time.
* Subsidiaries:
- A subsidiary of a foreign trader is a legal entity owned by a foreign trader;
- A subsidiary established in Vietnam is considered a Vietnamese enterprise and has its own rights and obligations to conduct business activities in Vietnam (including issuing invoices);
- Has a term of operation of up to 50 years from the date of license issuance and can be renewed;
- The procedure for opening a subsidiary requires more complicated paperwork and takes longer to process.
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