Establishment of Representative offices or branches of foreign traders in Vietnam

A. LEGAL BASIS:

• Law on Commerce 2005.
• Decree No. 07/2016/ND-CP detailed regulations on establishment of Representative offices or branches of foreign traders in Vietnam under Law on Commersce.

B. ORDER AND PROCEDURES:

I. ESTABLISHMENT OF BRANCHES:

1. Conditions for establishing branches of foreign traders in Vietnam:

2.Applications for Licenses for Establishment of branches:

• 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;
• The foreign trader has come into operation for at least 05 years from the date of establishment or registration;
• The Certificate of Business registration or equivalent document is valid for at least 01 more year from the date of submission of the application;
• The scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign trader;
• Where the businesses of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in one of countries or territories being parties to treaties to which Vietnam is a signatory, the representative office can be established only if they obtain a prior consent of the relevant Minister for establishment of the representative office.
• An application form for license for establishment of the branch using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.
• Copies of the Certificate of Business Registration or equivalent documents of the foreign trader;
• A letter of appointment of the head of the branch;
• Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established;
• Copies of the branch charter;
• Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch;
• Documents on the expected location of the branch including:
• 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 expected location of the branch: Representative offices and branches shall be headquartered at locations that satisfies requirements for security, occupational hygiene and safety and others stipulated in laws of Vietnam. Representative offices or branches shall not lend or sublet their offices.

Time for considering, requiring for dossiers addition: within 03 working days from the date of submission via post or online submission (where applicable).

Competent authority: Ministry of Industry and Trade.

3. Effective periods of Licenses for Establishment of branches

The License for Establishment of a branch shall be valid for 05 years but not exceeding the remaining effective period of the Certificate of Business Registration or the equivalent (for documents having expiry date);

4. Heads of representative offices or branches

The Head of 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.

• The head of branch shall be responsible for his/her activities the scope of authorization.
• In the absence of the head of 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 branch shall be responsible for exercising rights and obligations specified in the power of attorney.
• Upon the expiry of the power of attorney, if the head of 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 branch within the scope of authorization until the head of branch returns or the head office appoints another person as the new head of branch.
• If the head of branch from Vietnam is absent from Vietnam for a period of longer than 30 days without any authorization, or if the head of 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.
• The head of a branch shall not concurrently hold the following titles:
  • The head of a representative office of another foreign trader;
  • The head of a representative office of the same foreign trader;
  • The legal representative of a business organization incorporated under Laws of Vietnam.

5. Notification of branch information

Within 15 working days from the date of grant, re-grant, adjustment, extension and revocation of the License for Establishment of a branch, the licensing agency shall publish the following information on its web portal:

• The name and address of the branch;
• The name or address of the head office of the foreign trader.
• Information on the head of the branch;
• The reference number, date of issue and effective period of the Licenses for Establishment of the branch and licensing agency.
• The scope of operation of the branch;
• Date of re-issue, adjustment, extension or revocation of the License for Establishment of the branch.

To be continued...

Legal expert: Thuy Vy (0905.045.915)

FDVN Law Firm