Establishment of foreign trader’s Branch in Vietnam

Abstract: Branch of foreign trader is responsible for providing services of foreign trader in Vietnam. The article elaborates conditions, procedure and other legal issues related to the operation of Representative office

Key words: Establishment of Branch; foreign trader’s Branch

Right to establish Branch of foreign trader in Vietnam

• Foreign trader is entitled to set up Branch in Vietnam according to Vietnam’s commitments to treaties to which Vietnam is a signatory.
• Each foreign trader shall not establish more than one representative office or branch that has the same name within a province or centrally-affiliated city.

The power to grant of Licenses for Establishment of branches

The Department of Industry and Trade of the province shall have the power to grant, re-grant, adjust, extend or revoke the License for Establishment of branches and shall have the power to have such branches shut down in case the establishment of such branches has not been prescribed by specialized legislative documents.

Requirements for grant of Licenses for Establishment of branches

Foreign businesses shall be granted Licenses for Establishment of branches if they satisfy the following requirements:

• 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 year 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.

Applications for Licenses for Establishment of branches

• 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: (i) 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.

Of note, aforementioned documents shall be translated into Vietnamese, certified true in accordance with laws of Vietnam and also legalized by overseas diplomatic missions or Consulates of Vietnam in accordance with laws of Vietnam (if issued outside Vietnam).

Procedures for Licenses for Establishment of branches of foreign traders

Step 1: Submit application

The foreign trader shall submit the application to the licensing agency where the branch is expected to be located directly or by post or online (where applicable).

Step 2: Work settlement

Within 03 working days from the date of receipt of the application, the licensing agency shall examine such application and request the applicant to complete the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of such application.

The licensing agency shall send the applicant a written notification of whether the license or establishment of the representative office is granted or not within 07 working days from the date of receipt of the valid application. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

Structures of branches

The organization structure and personnel of a representative office or branch shall be decided by their head office.

The employment of foreign workers of representative offices or branches shall comply with legislation on labor and Vietnam’s Commitments to treaties to which Vietnam is a signatory;

Locations of representative offices and branches

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.

Name of representative offices or branches

Representative offices or branches shall be named using letters in Vietnamese alphabet, letters F, J, Z and W, numbers and symbols.

The name of a representative office or branch shall be the name of its head office enclosed with the phrases “representative office” or “branch”.

The nameplate of every representative office or branch shall be put up at their office. The size of the name of the representative office or branch printed in their transaction documents, records and publications shall be smaller than that of its head office.

Scope of branch operation

• Branches shall provide services other than those specified in specialized legislative documents.
• Branches are allowed to operate in fields having requirements for operation only if they satisfy all such requirements promulgated by respective laws.