Tiếng Việt
A representative office is one of the foreign – invested forms for foreign investors. It offers a low-cost entry to better understand Vietnam’s business market. The aricle below shall illustrate some information regarding typical rights and obligations of foreign representative office in Vietnam.
Read more: Appointment Letter for chief of the representative office in Vietnam
Mục lục
Advantages of Representative Office
Opening a representative office would bring more advantages than opening a foreign company in Vietnam, such as:
– An effective tool to promote commercial activity, seeking partners, and increasing opportunities to expand business market in Vietnam.
– The establishment follows more simple procedures for licensing in Vietnam than establishing entity in Vietnam. Accordingly, the process has been taken less time which is more favorable for foreign traders.
– No company or corporate tax applied. Only required the personal income tax for employees.
– No requirement for a minimum amount of capital.
– Only one operational report that must be submitted to the Licensing Department, which is quite easy task.
Obligations of Representative Office
– No direct profit making activities. Their activities are limited to market research and other non-profit activities.
– Only conduct trade promotion activities to the extent permitted by Commercial Law such as: sales promotion; commercial advertising; display; introduction of goods or services; trade fairs and exhibitions.
– Comply with labor, social insurance regulations: Registering working permit for foreign workers (if any); and pay monthly insurance.
– Comply with personal income tax regulations: Registering tax code number for every staff and declare for monthly personal income tax, prepare and submit annually settlement reports.
– Submit an annual report for the Licensing department.
– The operation term is 5 years at maximum and can be extended.
Conditions to open a representative office in Vietnam
Only when meeting regulated conditions below, foreign investors shall establish Representative Office in Vietnam:
– Being a trader recognized by the law of the country where it has been lawfully established.
– The foreign trader has come into operation for at least 01 year from the date of establishment or registration;
– 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;
How to open a representative office in Vietnam?
The establishment of a representative office of a foreign company in Vietnam is not obligated to obtain an investment certificate (due to Artical 8 of Decree 07/2016/ND-CP). Only the permission of the Department of Industry and Trade of provinces/cities is needed.
Application for License of Establishment of a representative office in Vietnam require:
– A copy of parent company’s license which must be notarized by Ministry of foreign Affairs or a similar department.
– Appointment letter of Chief of Office of representative with identification documents and company seal
– A copy of representative office’s chater
– Audited financial report of the parent company for the latest fiscal year
– Copy of documents providing rights of landlord
This process of granting License of Establishment by the Department of Industry and Trade of provinces/cities often takes 25 working days.
Why should you use our service?
With over 10 years of experience operating in the field of law with a team of experienced, enthusiastic personnel. LNP LAW is confident to bring the best service to customers in the fields of Investment, Intellectual Property, Business. The above article has summarized the Compulsory obligations of Representative Office in Vietnam?
Customers wishing to setting up a representative office in Vietnam will receive the services:
– Advice, support, answer your questions related to the establishment and legal issues after establishment representative office;
– Representing customers to submit documents, receive results, solve legal issues with the competent state agencies;
– Other jobs requested by customers.