A foreign business
entity or a foreign trader is allowed to establish Representative Office in Vietnam according to
the Commercial Law No 36/2005 and Decree No. 72/2006/NĐ-CP dated July 25th,
2006 detailing the commercial law regarding Vietnam-based representative
offices and branches of foreign traders.
Representative
office of a foreign business entity in Vietnam (referred as
“Representative Office”) means a subsidiary unit of the foreign business
entity, established in accordance with the law of Vietnam in order to survey
markets and to undertake a number of commercial enhancement activities
permitted by the law of Vietnam. Representative Office will need to apply
and obtain the establishment license; and have a seal bearing the name of the
representative office.
Setting up a
Representative Office is less complicated from setting up a company in Vietnam.
The Vietnam Department of Trade will be approving the establishment of
Representative Office in Vietnam while Vietnam Ministry of Planning and
Investment will be the State agency that coordinate the setting up a company in
Vietnam. The time duration to establish a Representative Office is
shorter than to establish
a company. There are fewer conditions to meet than conditions
in setting up a company in Vietnam. The main difference between a
Representative Office and a company in Vietnam is that the Representative
Office could not directly conduct profit making activities.
Rights of the
Representative Office:
- To
operate strictly in accordance with the purposes, scope and duration
stated in the license for establishment of such representative office;
- To
rent offices and to lease or purchase the equipment and facilities
necessary for the operation of the Representative Office;
- To
recruit Vietnamese and foreign employees to work for the Representative
Office in accordance with the law of Vietnam;
- To
open accounts in foreign currency and in Vietnamese Dong sourced from
foreign currency at banks which are licensed to operate in Vietnam, and to
use such accounts solely for the operation of the Representative Office.
Obligation of the
Representative Office:
- Not
to directly conduct profit making activities in Vietnam;
- Not
to enter into commercial contracts of the foreign business entity or to
amend or supplement such contracts already signed except where the head of
the Representative Office has a valid power of attorney from the foreign
business entity;
- To
pay taxes, fees and charges and to discharge other financial obligations in
accordance with the law of Vietnam;
- To
report on the operation of the Representative Office in accordance with
the law of Vietnam
A foreign company which
has effectiveness business activities will be allowed to open the
Representative Office in Vietnam if this company has real demand to open the
market in Vietnam and meet conditions as below:
- Being
a business entity or trader recognized by the law of the country or the
territory (hereinafter referred to collectively as the country) where it
has been lawfully established or made its business registration;
- Having
been operating for at least one year after its lawful establishment or
business registration in its country.
The issuing period will
be within 20 working-days after the date of submitting the full valid documents
as requested.
ANT Lawyers has law
offices in Hanoi, Ho Chi Minh,
and Da Nang City.
For advice or service request, please contact us via email ant@antlawyers.vn,
or call +84 8 3520 2779. To learn more about us, visit www.antlawyers.vn.
Source: ANTLawyers
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