SCOPE OF WORK OF REPRESENTATIVE OFFICE IN VIETNAM

 

I. Conditions on issuance of Licence for establishment of representative offices

  1. The foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
  2. The foreign trader has come into operation for at least 01 year from the date of establishment or registration;
  3. The Certificate of Business Registration or the equivalent document is valid for at least 01 more year from the date of submission of the application;
  4. The scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatory;
  5. Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies (hereinafter referred to as “relevant Ministers”) have given approval for establishment of the representative office.

(Article 7 Decree 07/2016/ND-CP)

II. Scope of operation of representative offices

The operation of a representative office shall be solely confined to the conduct of liaison activities, market research, and promotion of its head office’s businesses, excluding services the establishment of representative office in which is specified in specialized legislative documents

(Article 30 Decree 07/2016/ND-CP)

III. Right of representative offices

  1. To operate for the purposes, within the scope and duration stipulated in their establishment licenses.
  2. To rent offices, rent and purchase equipment and facilities necessary for their operations.
  3. To recruit Vietnamese and expatriate employees to work for them according to the provisions of Vietnamese law.
  4. To open accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to operate in Vietnam, and to be allowed to use those accounts solely for their operations.
  5. To have seals bearing their names according to the provisions of Vietnamese law.
  6. To have other rights as defined by law.

(Article 17 Commercial Law 2005)

IV. Obligation of representative offices

  1. Not to directly conduct profit-generating activities in Vietnam.
  2. To conduct commercial promotion activities within the scope permitted by this Law.
  3. Not to enter into contracts, not to amend or supplement contracts already entered into by foreign traders, except where chief representatives obtain valid letters of authorization from foreign traders or other cases specified in Clauses 2, 3 and 4, Article 17 of this Law.
  4. To pay taxes, fees and charges, and fulfil other financial obligations provided for by Vietnamese law.
  5. To report on their operations according to Vietnamese law.
  6. To have other obligations as defined by Vietnamese law.

(Article 18 Commercial Law 2005)

  • Tax obligation of representative offices

  • Submit tax report per quarter and the end of each fiscal year

  • Submit registration tax per year (from 2.000.000VND to 3.000.000 VND)

  • Submit personal income tax of Heads of representative office, employee (if any)

  • Not submit VAT tax, Corporate income tax (since the representative offices does not have any business, manufacturer activities).

V. Operation report periode

  1. By January 30th of each year, every representative office and branch submit operation status reports using the form stipulated by the Ministry of Industry and Trade to the licensing agency by post.
  2. Representative offices and branches shall submit reports, documents and explanations for their operation upon the request of competent state regulatory authorities.

(Article 32 Decree 07/2016/ND-CP)

VI. Heads of representative offices

  1. The Head of the representative office or branch shall be responsible for his/her action and the operation of the representative office or branch to his/her head office within the power of attorney.
  2. The head of the representative office or branch shall be responsible for his/her activities the scope of authorization.
  3. In the absence of the head of the representative office or branch from Vietnam, he/she shall grant the power of attorney to another person. The power of attorney shall be made with the prior consent of the head office. However, the head of the representative office or branch shall be responsible for exercising rights and obligations specified in the power of attorney.
  4. Upon the expiry of the power of attorney stipulated in clause 3 hereof, if the head of the representative office or branch has yet to return and no additional power of attorney is made, the current authorized person shall be eligible for exercising rights and obligations as the head of the representative office or branch within the scope of authorization until the head of the representative office or branch returns or the head office appoints another person as the new head of representative offices or branch.
  5. If the head of representative offices or branch from Vietnam is absent from Vietnam for a period of longer than 30 days without any authorization, or if the head representative offices or branch is dead, missing, detained, sentenced to prison or has no capacity for action, the head office shall appoint another person as the new head of representative offices or branch.
  6. The head of a representative office shall not concurrently hold the following titles:
    • a) The head of a branch of the same foreign traders;
    • a) The head of a branch of another foreign trader;
    • c) The legal representative of the same foreign trader or others;
    • d) The legal representative of a business organization incorporated in accordance with Laws of Vietnam.
  7. If the head office authorizes the head of the representative office to sign, adjust or supplement contracts, the head office shall grant the power of attorney for each conclusion, adjustment, and supplementation.
  8. The head of a branch shall not concurrently hold the following titles:
    • a) The head of a representative office of another foreign trader;
    • b) The head of a representative office of the same foreign trader;
    • c) The legal representative of a business organization incorporated under Laws of Vietnam.

(Article 33 Decree 07/2016/ND-CP)

VII. End of operation of representative offices, branches

  1. It is requested by its head office;
  2. The foreign trader ceases to operate according to laws of the country or territory in which such foreign trader is established or registered.
  3. The License for Establishment of the representative office or branch is expired but its head office does not apply for extension of the license.
  4. The licensing agency refuses to grant an extension of the expired License for Establishment of the representative office or branch.
  5. The License for Establishment of the branch or representative office is revoked as prescribed in Article 44 hereof.
  6. The foreign trader or its representative office or branch no longer satisfies one of the requirements stipulated in Articles 7 and 8 hereof.

(Article 35 Decree 07/2016/ND-CP)

VIII. Obligations resulting from End of operation of representative offices

  1. In addition to the execution of procedures for shutdown of representative offices or branches stipulated in Articles 36 and 37 hereof, the representative office or branch shall publicly put up the notice of the shutdown at their office and fulfill other involving obligations under provisions of laws.
  2. Every foreign trader having closed representative offices or branches shall fulfill obligations to contracts and debt settlement including outstanding taxes and settlement of legal benefits of employees working for such representative offices or branches in compliance with provisions of laws.

(Article 38 Decree 07/2016/ND-CP)

IX. NECESSARY DOCUMENT TO APPLY FOR LICENCE OF ESTABLISHMENT OF REPRESENTATIVE OFFICES

Documents shall be made in foreign country

 (The foreign company must be set up at least one year)

  1. Established license and Business Registration license of Company 
    • Notes: Legalized in Vietnam’s Consulate General of foreign country and translate into Vietnamese. 
  2. Auditing Financial report of company in operation nearly year (had been audited by auditing company)
    • Notes: Legalized in Vietnam’s Consulate General of foreign country and translate into Vietnamese.
  3. Charter (M &A) and then regularized at Vietnam’s Consulate General of foreign country and/or Country’s Consulate General at Vietnam.
    • Notes: Legalized in Vietnam’s Consulate General of foreign country and translate into Vietnamese.
  4. A letter of appointment of the head of the representative office;
    • Notes: Legalized in Vietnam’s Consulate General of foreign country and translate into Vietnamese
  5. Passport of the Chief of RRO: Legalized in Vietnam Embassy or Notary in Vietnam Passport of the Chief of RRO in HCMC. 
  6. Office (or house) leasing contracts 
    • Notes: Notary Contract and Legal documents of landlord (such as notary certificate of land use right)