Establishment of foreign trader’s representative office in Vietnam

Abstract: Representative office of foreign trader is responsible for communication, transactions and market promotion in Vietnam. The article elaborates conditions, procedure and other legal issues related to the operation of Representative office.

Key words: Establishment of Representative office; foreign trader’s Representative office

Right to establish Representative office of foreign trader in Vietnam

• Foreign trader is entitled to set up Representative office 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 Licenses for Establishment of representative offices

• The Department of Industry and Trade of the province where the representative office is expected to be located outside industrial parks, export-processing zones, economic zones or hi-tech zones shall grant, re-grant, adjust, extend or revoke the License for Establishment of the representative office and shall have the power to have such representative office shut down in case the establishment of the representative office has not been prescribed by specialized legislative documents.
• Management Boards of industrial parks, export-processing zones, economic zones or hi-tech zones (hereinafter referred to as Management Boards) shall grant, re-grant, adjust, extend or revoke the License for Establishment of the representative office and shall have the power to suspend the operation of such representative offices located in industrial parks, export-processing zones , economic zones or hi-tech zones in case the establishment of such representative offices has not been prescribed by specialized legislative documents.

Conditions for grant of Licenses for Establishment of representative offices

Foreign traders shall be granted of Licenses for Establishment of representative offices if they satisfy the following conditions:

• 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 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;
• The scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatory;
• Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies (hereinafter referred to as “relevant Ministers”) have given approval for establishment of the representative office.

Applications for Licenses for Establishment of representative offices

• An application form for License for Establishment of the representative office 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;
• 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;
• A letter of appointment of the head of the representative office;
• Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office;
• Documents on the expected location of the representative office including: (i) Copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the representative office; (ii) Copies of documents on the expected location of the representative office in accordance with provisions of Article 28 hereof and related laws.

Procedures for grant of Licenses for Establishment of representative offices

Step 1: Submit application

The foreign trader shall submit the application to the licensing agency where the representative office 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 representative offices

• 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 operation of representative offices

The operation of a representative office shall be solely confined to the conduct of liaison activities, market research, and promotion of its head office’s businesses, excluding services the establishment of representative office in which is specified in specialized legislative documents.

                                                                                                                                        Lawyer. Pham Thi Quynh Trang