Guidelines for establishing Representative Office of foreign enterprises in Vietnam

Within this article, Siglaw would like to introduce the legal conditions and procedure for establishing a Representative Office to help entities who want to approach customers and partners and perform trade promotions. 

A Representative Office is a dependent unit that the foreign enterprise often select to establish

1. Conditions for establishing Representative Office of foreign enterprises in Vietnam

General conditions:

• Foreign investors may establish and register their business according to the law of the countries or territories participating in international treaties that Vietnam is a member, or recognized by the laws of these countries and territories. 

• The Foreign enterprise has operated for at least 01 year from the date of establishment or registration.

• If the Enterprise Registration Certificate or equivalent documents of a foreign enterprise stipulate an operation date, that time limit must be at least 01 year from the date of application submission.

• The operation contents of the Representative Office must be consistent with Vietnam's commitments in international treaties to which Vietnam is a signatory;

• In case the operation contents of the Representative Office are not consistent with the commitments of Vietnam, or the foreign investor is not a national of the countries or territories participating in international treaties to which Vietnam is a member, the establishment of the Representative Office must be approved by ministers or heads of specialized ministerial-level agencies.

Conditions for name:

• The name of the Representative Office must be written with the letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols.

• The name of the  Representative Office must bear the name of the foreign investor and the phrase "Representative Office".

• The name of the Representative Office must be written or attached at the headquarters of the Representative Office. The name of the Representative Office is printed or written in a smaller font than the name of the foreign investor on transaction papers, documents, and publications issued by the Representative Office.

Conditions for the Headquarter

• The location of the Representative Office of the foreign investor must meet the requirements of Vietnamese law on security, order, occupational safety, and health conditions, and other conditions as prescribed by law. 

• Representative offices are not allowed to lend or sublease their headquarters.

Conditions for the Head of the Representative Office:

The Head of a Representative Office of the foreign investor may not concurrently hold with the following positions:

• Head of Branch of the same foreign investor.

• Head of Branches of other foreign investors.

• The Legal Representative of such foreign investors or other foreign investors.

• The Legal Representative of an economic organization established according to the law of Vietnam.

License to establish Representative Office of foreign traders in Vietnam

2. The procedure for establishing Representative Offices of foreign traders in Vietnam

Licensing agency:

• Department of Industry and Trade:

Departments of Industry and Trade of provinces and central cities where the investor plans to locate Representative Offices outside industrial areas, manufacturing areas, economic sector, and high-tech zones shall issue the establishment licenses of a Representative Office in case the establishment of a Representative Office has not been specified in legal documents.

• Management Board:

The Management Board of industrial areas, manufacturing areas, and high-tech zones shall issue the establishment of a representative office license if the establishment of the representative office has not been regulated in specialized legal documents.

• Number of documents: 01 sets.

• Receive results date: 10 working days from the date of receiving complete and valid documents.

Application includes:

• An application form for an establishment license of Representative Office (Form MD-1, Circular No. 11/2016/TT-BTC).

• A copy of the enterprise registration certificate or equivalent document of the foreign investor (must be certified or legalized; must be translated into Vietnamese and authenticated according to  Vietnamese law).

• The document of the foreign investor nominating/appointing the Head of the Representative Office (must be translated into Vietnamese and authenticated according to Vietnamese law)

• A copy of the audited financial statement or a written certification of the fulfillment of tax or financial obligations in the latest fiscal year or an equivalent document issued by a competent agency or organization where the foreign investor establishes representative offices or certify, prove the existence and operation of the foreign investor in the latest fiscal year (must be translated into Vietnamese and authenticated by Vietnamese law).

• Copy of passport or identity card or citizen identification card (for Vietnamese) or copy of passport translated into Vietnamese and authenticated according to Vietnam law (for foreigner) of the Head of the Representative Office.

• Documents on the proposed location of the representative office's headquarters include:

(1) A copy of the memorandum of understanding or agreement to lease the location or a copy of the document proving that the trader has the right to exploit and use the location to locate the Representative Office;

(2) A copy of the document on the proposed location of the representative office's headquarters according to the law.

Implementation procedure:

Step 1: Apply directly or by post or online to the Licensing Agency where the Representative Office is expected to be located.

Step 2: The Licensing Agency examines and requests additional information if the application is incomplete or invalid within 03 working days from the date of receiving the application. The request for the additional documents is made at most once during the processing of the application.

Step 3: Within 07 working days from the date of receipt of the complete and valid document, the licensing agency shall issue or not issue The establishment license of a Representative Office for the foreign trader. In case of refusal, there must be a written explanation clearly stating the reason.

Note: The procedure will be implemented differently for the following cases:

• The operation content of the Representative Office is not consistent with the commitments of Vietnam or the foreign investor is not a national of the country or territory participating in the international treaty to which Vietnam is a member.

• The establishment of a Representative Office has not been prescribed in specialized legal documents.

For these cases, the licensing agency shall send a document to consult the specialized management ministry within 03 working days from the date of receiving a complete and valid application. Within 05 working days from the date of receipt of the consulting document from the Licensing Agency, the Ministries of specialized management shall issue a document stating their agreement or disagreement with the establishment of a representative office license. Within 5 working days from the date of receiving opinions from the specialized management ministry, the licensing agency shall issue or refuse to issue the establishment of a representative office license for the foreign investor. In case of refusal, a written reason must be clearly stated.

3. Legal basis:

• Commercial Law No. 36/2005/QH11 of the National Assembly dated June 14, 2005.

• Decree No. 07/2016/ND-CP of the Government dated January 25, 2016, detailing the Commercial Law on Representative Offices and branches of foreign traders in Vietnam.

• Circular No. 11/2016/TT-BTC of the Ministry of Industry and Trade dated July 5, 2016, providing for the form of implementation of Decree No. 07/2016/ND-CP dated January 25, 2016, of the Government detailing the Law Trade-in Representative Offices and branches of foreign traders in Vietnam.