Establishment of a Foreign Company Branch in Vietnam

The establishment of a foreign company branch in Vietnam is one of the legal forms through which foreign traders may conduct commercial activities in the Vietnamese market. This article outlines the legal definition, conditions, procedures, and documentation required to establish a foreign company branch in Vietnam in accordance with Vietnamese law and international commitments.

1. What is a Foreign Company Branch?

A foreign company branch is a dependent unit of a foreign enterprise established in Vietnam. This branch may perform part or all of the functions of the foreign company, including acting as the authorized representative. The business activities of the branch must be consistent with those of the parent foreign enterprise.

2. Conditions for Establishing a Foreign Company Branch in Vietnam

According to Article 8 of Government Decree No. 07/2016/ND-CP, a foreign trader may establish a branch in Vietnam if the following conditions are met:

• The foreign trader is from a country or territory that is a member of a treaty to which Vietnam is also a party, or whose laws recognize the foreign trader’s business registration.
• The foreign trader has been operating for at least 05 years from the date of establishment or business registration.
• If the foreign trader’s business registration certificate or equivalent document specifies an operation term, such term must be valid for at least 01 year from the date of application submission.
• The branch’s intended activities must be consistent with Vietnam’s market access commitments under international treaties to which Vietnam is a party, and also align with the foreign trader’s business lines.
• In cases where the branch’s activities are inconsistent with Vietnam’s international commitments, or the foreign trader is not from a treaty member country or territory, the establishment of the branch must be approved by the Minister of the line ministry.

3. Application Dossier for Establishing a Foreign Company Branch in Vietnam

A foreign enterprise must prepare one (01) set of documents, including:

• An application form for the Branch Establishment License (as prescribed by the Ministry of Industry and Trade), signed by a legally authorized representative of the foreign trader
• A notarized copy of the foreign trader’s business registration certificate or equivalent document;
• A written appointment or authorization letter from the foreign trader designating the head of the branch;
• A copy of the audited financial statement, or a certificate of tax or financial compliance for the most recent fiscal year, or an equivalent document issued or confirmed by a competent authority in the country where the foreign trader is established;
• A copy of the Branch’s operational charter;
• A notarized copy of the passport or identity card/citizen ID of the person appointed as the head of the branch;
• Documents relating to the proposed location of the branch office, including:

• A copy of the lease agreement or documents proving the trader’s right to use the premises;
• A copy of documents verifying that the branch office complies with Vietnam’s legal requirements on security, order, labor hygiene, and other regulatory conditions.

4. Procedures for Establishing a Foreign Company Branch in Vietnam

Step 1: Submission of Dossier
The foreign trader shall submit the application for branch establishment directly, by post, or electronically (where applicable) to the licensing authority, i.e., the Ministry of Industry and Trade.

Step 2: Dossier Review
Within 03 working days from receipt of the dossier, the licensing authority shall examine its completeness and validity. If the dossier is incomplete or invalid, a one-time request for supplementation shall be made.

Step 3: Public Disclosure of Branch Information
Within 15 days from the issuance, re-issuance, amendment, extension, or revocation of the Branch Establishment License, the licensing authority shall publish the following information on its official website:

• Name and address of the branch;
• Name and address of the foreign trader;
• Name of the branch head;
• Number, issuance date, term of the Branch Establishment License, and name of the issuing authority;
• Operational scope of the branch;
• Date of any amendment, extension, or revocation of the license.

5. Important Notes on Operating a Foreign Company Branch in Vietnam

• The Branch Director is responsible to the foreign trader for their own activities and those of the branch within the scope of authorized power.
• If the Branch Director acts beyond the authorized scope, they are personally responsible for those actions.
• When the Branch Director leaves Vietnam, they must issue a written power of attorney authorizing another individual to perform their duties, with the foreign trader’s consent. The Branch Director remains liable for the actions performed under such authorization.
• If the authorization expires and the Director has not returned to Vietnam nor issued a new authorization, the authorized person may continue acting within the previous scope until the Director returns or the foreign trader appoints a new head.
• If the Branch Director is absent from Vietnam for over 30 days without issuing a power of attorney, or if they are deceased, missing, detained, imprisoned, or incapacitated, the foreign trader must promptly appoint a new branch head.
• The Branch Director of a foreign trader may not concurrently hold the following positions:

• Head of a representative office of another foreign trader;
• Head of another representative office of the same foreign trader;
• Legal representative of an economic organization established under Vietnamese law.

In conclusion, establishing a foreign company branch in Vietnam is a complex legal procedure that requires strict compliance with both domestic regulations and Vietnam’s international commitments. Foreign traders are advised to carefully assess the legal requirements and engage qualified legal counsel to ensure a smooth and compliant establishment process.

📞 CONTACT LEGAL CONSULTANT:

TLA Law is a leading law firm with a team of highly experienced lawyers specializing in criminal, civil, corporate, marriage and family law, and more. We are committed to providing comprehensive legal support and answering all your legal questions. If you have any further questions, please do not hesitate to contact us.

1. Lawyer Vu Thi Phuong Thanh, Manager of TLA Law LLC, Ha Noi Bar Association

Email: vtpthanh@tlalaw.vn

2. Lawyer Tran My Le, Chairman of the Members’ Council, Ha Noi Bar Association

Email: tmle@tlalaw.vn.

Dinh Phuong Thao