Guidelines for establishing branches for foreign investors in Vietnam

In this article, Siglaw Firm would like to introduce the legal conditions, process, and the procedure for establishing branches to help entities consider to increase revenue and profit from business activities. 

A branch is a dependent unit of foreign investors 

1. Requirements for establishing branches for foreign investors in Vietnam

General requirements: 

• Foreign investors may establish and register for conducting business following the provisions of laws of countries or territories that are members of treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories

• Foreign investors have come into operation for at least 05 years from the date of establishment or registration.

• The Enterprise Registration Certificate or equivalent document is valid for at least 01 more years from the date of submission of the application.

• The scope of operation of the branch is conformable with Vietnam’s commitments to market access that stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign investors.

• Where the scope of operation of the branch is inconsistent with Vietnam’s commitments or the foreign investor is not located in the country or territory being member to treaties to which Vietnam is a signatory, the branch can be established only if relevant Ministers or Heads of relevant Ministerial Agencies have approved to establish the branch.

Requirements for the name: 

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

• The name of the branch must take the name of the foreign investor and the phrase "branch".

• The name of the branch must be written or shown at the branch office. The name of the branch is printed or written in smaller font size than the name of the foreign investor on transaction papers, documents, and publications issued by the branch.

Requirements for the Headquarters:

• The location of the Headquarter of a branch must correspond to the provisions of Vietnamese law on security, order, occupational safety, and health requirements, and other requirements as prescribed by law. 

• Branches are not allowed to lend or sublease their headquarters.

Requirements for the Head of the branch:  

• The head of a branch shall not concurrently hold the following titles: 

• The head of a Representative Office of another foreign investor; 

• The head of a Representative Office of the same foreign investor; 

• The Legal Representative of a business organization incorporated under the Vietnamese laws.

2. The procedure for establishing branches for foreign investors

• Regulatory Agency: The Ministry of Industry and Trade shall issue the Establishment of Branch License in case the establishment of a branch has not been specified in specialized legal documents.

• Number of applications: 01. 

• Time to receive results: 10 working days from the date of receiving a complete and valid application.

Applications include: 

• Application for the written approval for establishing the branch (Form MD-5 of Circular No. 11/2016/TT-BTC).

• Copies of the Enterprise Registration Certificate or equivalent documents of the foreign investor (must be consular certified or legalized; must be translated into Vietnamese and authenticated following Vietnamese law).

• A letter of appointment of the Head of the branch (must be translated into Vietnamese and authenticated following Vietnamese law).

• Copies of audited financial statements or certificate of tax paid liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign investor that issued or certified by competent authorities where such foreign investor is established (must be translated into Vietnamese and authenticated following Vietnamese law).

• Copies of the Branch Charter (must be translated into Vietnamese and authenticated following Vietnamese law).

• Copies of the passport or ID card (for Vietnamese) or copies of the passport translated into Vietnamese and authenticated following Vietnamese law (for foreigners) of the head of the branch

Documents on the expected location of the branch include: 

• Copies of Memorandum of Understanding (MOU) or Leasing Agreements or documents as proof of the right to use a location as the branch. 

• Copies of documents on the location of the branch.

Operation registration certificate of the Branch

The procedure for establishing branches for foreign investors in Vietnam:

Step 1: Submit the application in person or by post or online to the Licensing Agency where the branch is located.

Step 2: Licensing Agency examines and requests additional information if the application is incomplete or invalid within 03 working days from the date of receipt of the application. 

The request for 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 valid application, the Licensing Agency shall send the applicant a written notification of whether the Establishment of Branch License is issued or not. If not, the Licensing Agency shall send the applicant a written notice in which reasons for rejections shall be specified.

Note: The procedure for the following cases will be done differently from the above procedure, namely:

• In case the operation content of the branch are inconsistent with Vietnam’s Commitments or the foreign investor is not located in one of the countries or territories being members to treaties to which Vietnam is a signatory

• In case the establishment of the branch has not been prescribed by specialized legislative documents

For these cases, the Licensing Agency shall submit a written request for directions to the relevant Ministry within 03 working days from the date of receipt of the valid application. 

• Within 03 working days from the date of receipt of the request for directions from the Licensing Agency, the relevant Ministry shall submit to the Licensing Agency a written notification of whether they approve the application for the Establishment of Branch License.

• Within 05 working days from the date of receipt of the notification from the relevant Ministry, the Licensing Agency shall send the applicant a written notice of whether the Establishment of Branch License is issued. 

• If not, the Licensing Agency shall send the applicant a written notice in which reasons for rejections shall be specified.

Legal basis 

• Law on Commerce dated June 14, 2005, of the National Assembly.

• Decree 07/2016/ND-CP dated January 25, 2016, of the Government detailing the Commercial Law on representative offices and branches of foreign investors in Vietnam.

• Circular No. 11/2016/TT-BTC of the Ministry of Industry and Trade dated July 5, 2016, stipulating the form of implementation of Decree 07/2016/ND-CP dated January 25, 2016, of the Government detailing the Commercial Law on representative offices and branches of foreign investors in Vietnam.