Did you know How to open a representative office in Vietnam?

Opening a representative office in Vietnam can be a great opportunity for foreign companies looking to expand their business into the Vietnamese market to have a first-market approach to how the business environment in Vietnam is running. A representative office of a foreign company established in Vietnam is considered an extending hand of a foreign company established in their home country to conduct marketing and research activities without aiming for profitable commercial purposes. In this article, we will discuss the legal requirements, conditions, and procedures for opening a representative office in Vietnam.

Eligibility Requirements

To open a representative office in Vietnam, foreign companies must meet, among others, the following requirements:
(i) The foreign company must have been operating for at least one year from the date of incorporation or registration;
(ii) The foreign company must be legally established and operating in accordance with the laws of its home country; and
(iii) Activity content(s) of the representative office must be in conformity with commitments contained in the treaties to which Vietnam is a party.

Licensing Procedures

The licensing procedure to open a representative office in Vietnam involves the following steps:

Step 1: Preparing the de-forma application documents

The foreign company must prepare the following documents:
(i) A written request for opening a representative office in Vietnam;
(ii) A copy of the business registration certificate or equivalent document of the foreign company;
(iii) A power of attorney issued by the foreign company’s legal representative;
(iv) A decision on the appointment of the representative office’s proposed chief representative;
(v) Passport/ identity card of the chief representative;
(vi) A copy of the foreign company’s latest audited financial statement or written confirmation of tax obligations status; and
(vii) A document evidencing the representative office’s proposed registered location.

Step 2: Submitting the application

The foreign company must file the application documents to the Provincial Department of Industry and Trade (“DOIT”) if the representative office is located outside the industrial area and must file to the provincial Management Board of Industrial Zones (the “MBIZ”) if the representative office is located in the industrial area. The application can be submitted in person, online, or by post.

Step 3: Obtaining the license

The provincial DOIT or MBIZ will review the application and issue a license for the establishment of a representative office of a foreign company (the “License“) within seven (7) working days from the receiving date of the complete and proper application dossier by the provincial MOIT / MBIZ.

Term of the License

The term of the License is five (5) years from the date of issuance by the DOIT or MBIZ and shall be extended upon the expiry of the term of the License.

Post-licensing Procedures

After obtaining the License, the foreign company must complete the following post-licensing procedures, among others:
(i) a seal from the seal production company.
(ii) Register with the local tax office and obtain a tax code.
(iii) Opening a bank account.
(iv) Registering for recruiting Vietnamese employees.

The representative office of the foreign company established in Vietnam must submit annual reports to the DOIT / MBIZ in which the representative office is located. The annual report must include information on the activities and financial status of the representative office.

In conclusion, opening a representative office in Vietnam can be a great opportunity for foreign companies looking to expand their business in Vietnam before making a decision to set up a subsidiary company in Vietnam or find valued investment opportunities. However, it is important to comply with all legal requirements and procedures and to be aware of and to determine whether it is eligible to open a representative office in Vietnam. Foreign companies can be in consultation with our practically experienced lawyers and professionals before making the right decision for opening their representative office in Vietnam.

For further information and should have any questions, please reach out to us at finnnguyen@ivlf-lawyer.com