Vietnam is one of the attractive markets for foreign traders when expanding their business or conducting investment activities, establishing the Representative Office is one of those activities.

The establishment and operation of Representative Office of the foreign trader (hereinafter collectively referred to as Foreign Representative Office) shall meet special conditions as well as complicated legal procedures. In some cases, it is more complicated than establishing a business in Vietnam. To help Client better understand this procedure, the following article will summarize in detail the necessary conditions and procedures to establish and operate Foreign Representative Office in Vietnam.

1. Conditions for establishing Foreign Representative Office in Vietnam

A Foreign Representative Office in Vietnam shall fully meet the following conditions:

• Foreign enterprise which is established and registered for business as prescribed by national law or territories participating in international treaties to which Vietnam is a signatory or recognized by the laws of other countries;
• Enterprise or foreign trader has been operating for at least 01 year from the date of establishment or registration;
• In case the Business Registration Certificate or document of equivalent value of the enterprise, Foreign trader has regulations duration of operation shall be at least 01 year from the date of application submission;
• The operation content of the Representative Office shall be consistent with Vietnam’s commitment in international treaties to which Vietnam is a member;
• In case the operation content of the Representative Office is not consistent with the commitments of Vietnam or the Foreign trader is not a member of a country or territory participating in international treaties to which Vietnam is a member, the establishment of the Representative Office shall be approved by Ministers, Relevant Ministers.

2. What activities are the Foreign Representative Office allowed to do?

Similar to the Representative Office of the enterprise established in Vietnam. A Foreign Representative Office is only allowed to perform the following activities:

• Performing communication office function;
• Researching the market, promoting business investment opportunities of the trader they represent, excluding the service industry which the establishment of the Representative Office in that field is regulated in the specialized legal documents.

3. Steps to establish a Foreign Representative Office

To establish a Representative Office for foreign trader in Vietnam, the Client shall perform the following steps:

Step 1 . Preparing a complete dossier according to the checklist in Section 4 below and sending it to the competent authority;

Step 2. Within 03 working days from the date of receiving the dossier, the competent authority will check and require a supplement if the dossier is incomplete or invalid. The supplementary requirement is performed 01 (one) time during the processing of handling dossier.

Within 07 (seven) working days from the date of receiving the complete and valid dossier, the competent authority shall grant or not grant the License to establish the Representative Office for the foreign trader.

In case of refusal, there shall be a document explanation clearly stating the reason.

Note:

• In case the establishment of the Representative Office is not specified in a specialized legal document, the competent authority shall send a document request to the Ministry of specialized management within 03 working days from the date of receiving a complete and valid dossier;
• Within 05 working days from the date of receiving the request for opinions of the Licensing Authority, the Ministry of specialized management shall issue a document stating their agreement or disagreement with granting licensing of the establishment of the Representative Office.

4. Some documents shall be prepared to register Foreign Representative Office operation in Vietnam

• An application form for a License to establish a Representative Office according to the form signed by a competent representative of the Foreign trader;
• A copy of the Business Registration Certificate or equivalent document of the Foreign trader;
• The document of the foreign trader appointing the head of the Representative Office;
• A copy of the audited financial statement or a document certification of the fulfillment of tax or financial obligation in the latest fiscal year or a document of equivalent value by the competent authority where the Foreign trader established or determined, to prove the existence and operation of the foreign trader in most recent fiscal year;
• A copy of passport or identity card or citizen identification card (if Vietnamese) or passport copy (if foreigner) of the head of the representative office;
• Documents on the proposed location of the Representative Office’s headquarters include:
• A copy of the memorandum of understanding or agreement to rent the location or a copy of the document proving that the trader has the right to exploit and use the location to locate the Representative Office;
• A copy of documents on the proposed location of the Representative Office’s headquarters as prescribed by relevant laws.

Through the above steps, we can see that licensing the operation of the Foreign Representative Office in Vietnam is actually not that simple. Therefore, foreign trader should consider the need to access the Vietnamese market to choose the most appropriate form of presence.

Time of writing: 30/3/2023

The article contains general information that is of reference value, in case you want to receive legal opinions related to the issues that you are having trouble with, please contact our lawyer at email: info@cdlaf.vn