Offshore investment through establishment of branch company

Offshore investment means a Vietnamese investor’s transfer of contributed capital abroad for investment. There are many forms of investment abroad such as setting up branches, representative offices, contributing capital to set up branches in foreign countries, etc. Many investors choose to establishment of branch to invest abroad. This form of investment ensures management supervision in the operation of the parent company in Vietnam.

>> Read more: Required documents for setting up representative office in Vietnam

1. What is a branch?

A branch is prescribed by Vietnamese law to be a dependent unit of the enterprise, tasked to perform all or part of its functions, including authorized representation. Business lines of a branch must be consistent with the business line of the business.

Thus, the branch is legally established, has its own seal and bank account but is not completely independent of the property. Therefore, the branch implements legal relations on behalf of its headquarters, not on its own behalf.

Vietnamese law stipulates that enterprises have the right to set up branches both at home and abroad. However, the establishment of branch should comply with the provisions of the law on offshore investment.

2. Procedures for establishment of branch in a foreign country

The establishment of branch in foreign countries complies with the laws of the country where investment is received and treaties to which Vietnam and the host country are members.

Before establishment of branch in a foreign country, an enterprise needs to have an offshore Investment Registration Certificate (IRC) and carry out the procedures for establishment of branch in a foreign country in accordance with the law.

Dossier of granting offshore investment certificate

– Registration document for outward investment;

– A copy of the business registration certificate of the enterprise;

– Proposal of an investment project;

– A document of the tax authority certifying the enterprise’s fulfillment of tax payment obligations by the time of filing;

– Foreign currency arrangement document of the credit institution for the enterprise;

– Documents certifying the locations of overseas branches;

– The enterprise’s offshore investment decision;

– For branches operating in the fields of banking, securities, insurance, science and technology, the enterprise shall submit the competent agency’s written approval of the satisfaction of conditions for offshore investment.

After obtaining the Outward investment registration certificate, the enterprise shall invest in establishing a branch in accordance with the regulations of the country where the project is implemented.

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