Setting up a representative office of a foreign trader in Vietnam is an important step for businesses looking to explore the local market or strengthen their presence in the region. However, the process requires adherence to specific conditions, submission of required documents, and compliance with the relevant legal procedures. This article outlines the key steps involved in establishing a representative office in Vietnam, providing foreign traders with essential guidance for a successful setup.
Conditions for grant of representative office establishment licenses
Foreign traders may be has been licensed to be establish representative office when meeting the following conditions as prescribed in Article 8 of Decree No. 07/2016/ND-CP on Detailing the Commercial Law regarding Vietnam-based representative offices and branches of foreign traders:
- The foreign trader has been established or has registered its operation under the law of a country or territory being member to a treaty to which Vietnam is a contracting party or recognized by the law of such country or territory.
- The foreign trader has been operating for at least one year since its establishment or business registration.
- In case the foreign trader’s business registration certificate or equivalent paper indicates its term of operation, the remaining term must be at least one year by the date of submission of the application.
- Contents of operation of the representative office must comply with Vietnam’s commitments in treaties to which Vietnam is a contracting party.
Note: A foreign trader may establish no more than one representative office bearing the same name in the same province or centrally run city. (Pursuant to Clause 2, Article 3 of Decree No. 07/2016/ND-CP)
Order and procedures for grant of representative office establishment licenses
Article 11 of Decree No.07/2016/ND stipulates the procedures for grant of representative office establishment license for foreign traders that:
Step 1: Submit dossier
– Competence to grant representative office establishment licenses:
According to Article 5 of Decree 07/2016/ND-CP, depending on each circumstance, the trader may submit the dossier to the licensing authority where the representative office is located, including:
- If the representative office is scheduled to be located in industrial parks, export processing zones, economic zones and hi-tech parks: The management board of an industrial park, export-processing zone, economic zone or hi-tech park.
- If not: The provincial-level Industry and Trade Department
– Submission method: directly, online or by post.
Step 2: Process and return dossier results
– Within 3 working days after receiving the dossier, the licensing agency shall check and request the applicant to supplement its dossier if it is neither complete nor valid.
– Within 7 working days after receiving a complete and valid dossier, the licensing agency shall grant to the foreign trader a representative office establishment license or refuse to grant it.
* Special cases: If a foreign trader falls into one of the cases mentioned in Clause 5, Article 7 of Decree 07/2016/ND-CP, the competent agency must seek written advice from the specialized management Ministry within 03 working days from the date of receipt of complete and valid documents:
– Contents of operation of the representative office fail to comply with Vietnam’s commitments;
– The foreign trader is not located in a country or territory being member to a treaty to which Vietnam is a contracting party.
The Ministry of specialized management will issue a written decision on whether to agree or not to grant the license within 5 working days from the date of receiving the official dispatch requesting comments, after receiving the comments of the Ministry of Management. Within 5 working days, the competent authority decides to grant or not to grant a License to establish a representative office for a foreign enterprise and clearly state the reason.
Dossiers of application for representative office establishment licenses
Pursuant to Article 12 of Decree No. 07/2016/ND-CP, the dossier shall comprise:
- An application for a representative office establishment license, made according to a form set by the Ministry of Industry and Trade and signed by the foreign trader’s competent representative;
- A copy of the business registration certificate or equivalent paper of the foreign trader;
- The foreign trader’s document on appointment of head of the representative office;
- Copies of audited financial statements or documents proving the fulfillment of tax liabilities or financial obligations in the latest fiscal year or equivalent paper issued or certified by a competent agency or organization of the locality where the foreign trader was established proving the actual existence and operation of the foreign trader in the latest fiscal year;
- A copy of the passport, people’ identity card or citizen’s identity card (for a Vietnamese) or a copy of the passport (for a foreigner) of the head of the representative office;
- Documents on the expected location of the representative office, comprising:
- A copy of the memo of understanding or location rental agreement or a document proving the right to use the location for opening the representative office;
- A copy of the document on the expected location of the representative office under Article 28 of this Decree and relevant laws.
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