ESTABLISHING A REPRESENTATIVE OFFICE FOR FOREIGN TRADERS

As the demand of expanding business of foreign company at Viet Nam, there are many foreign traders wish to establish a representative office at Viet Nam. With the purpose of commercial promotion in business, development of business. In this Article, KAV Lawyers will give some information on procedure of implement a representative office for foreign traders at Viet Nam.

Foreign traders wish to establish representative offices in Vietnam must meet the conditions for applying for a license to establish a representative office in accordance with relevant laws and guiding decrees. Specifically, the Government’s Decree No. 07/2016/ND-CP of January 25, 2016, detailing the Commercial Law on representative offices and branches of foreign traders in Vietnam (“Decree 07”) guiding the conditions for granting licenses to establish representative offices in Article 7 is as follows:

  • Foreign traders shall have the right to establish and register for business in accordance with the laws of the countries or territories participating in treaties to which Vietnam is a contracting party or recognized by the laws of other countries and territories;
  • Foreign traders have operated for at least 01 year from the date of establishment or registration;
  • In case the business registration paper or equivalent papers of the foreign traders stipulate the operation duration, such time limit must be at least 01 year from the date of submission of the dossier;
  • The operation contents of the representative office must be consistent with Vietnam’s commitments in treaties to which Vietnam is a contracting member;
  • Where the operation contents of the representative office are inconsistent with the commitments of Vietnam or foreign traders are not belonging to the countries or territories participating in treaties to which Vietnam is a contracting party, the establishment of representative offices must be approved by Ministers or Heads of specialized minister-level agencies (here below collectively referred to as the Head of Minister of Management).

Therefore, in order to be granted a license to establish a representative office in Viet Nam, foreign enterprises need to notice the time of operation and the operation contents must be in accordance with Vietnam’s commitments in treaties to which Viet Nam is a contracting party.

Procedures for applying for a license to establish a representative office for foreign traders.

Step 1: Checking the business line

According to the Article 7 of Decree 07, the operation contents of the representative office must be consistent with Vietnam’s commitments in treaties to which Vietnam is a contracting member. Therefore, business enterprises should compare the business line, is it appropriate with the Viet Nam’s commitments in treaties to which Viet Nam is a contracting member? Then, preparing the dossiers for granting the license to establish a representative office. In case the content is not appropriate with the Viet Nam’s commitment or the foreign traders are not belonging to the countries or territories participating in treaties to which Vietnam is a contracting party, the establishment of representative offices must be approved by Ministers or Heads of specialized minister-level agencies (here below collectively referred to as the Head of Minister of Management).

Step 2: Preparing the dossier

The enterprise prepares a dossier (according to article 10 Decree 07) including:

  • A requirement letter for granting a license to establish a representative office;
  • A copy of business registration certificate or the equivalent papers of the foreign traders;
  • A paper appointed the head of the representative office;
  • A copy of audited financial statements or a confirmation of the implementation of tax or financial obligations in the last fiscal year or equivalent papers issued or certified by competent agencies or organizations of the locality where the foreign enterprises are established, proving the existence and operation of foreign traders in the last fiscal year;
  • A copy of the passport or identification card or citizen’s identity card (if it is a Vietnamese) or a copy of the passport (if it is a foreigner) of the head of the representative office;
  • A copy of the memorandum of understanding/ agreement on the lease of the place or a copy of other documents proving that the traders have the right to exploit and use the place for the head office of the representative office;
  • A paper of attorney (in case of authorization).

Noted: With the copy of registration business paper or equivalent paper of foreign traders must be certified or legalized by overseas Vietnamese diplomatic representations or consular offices. Documents in foreign languages must be translated into Vietnamese and be authenticed in accordance with Vietnamese law.

Step 3: Submitting the dossier

After preparing 01 dossier, the person carrying out the procedures shall submit the dossier to the competent authorities (Departments of Industry and Trade of provinces and municipalities where traders are going to set up representative offices outside industrial parks, export processing zones, economic zones, high-tech parks or management board of industrial parks, export processing zones, economic zones and high-tech parks where foreign traders are going to set up representative offices in industrial zones, export processing zones, economic zones and high-tech parks).  It could be submitted in person, by post or online to the licensing Agency where the representative office is going to be located.

The fee for new issuance of a representative office establishment license is: 3,000,000 (three million) VND/ license (Circular No. 143/2016/TT-BTC).

Step 4: Return the result

Normally, within 03 working days after receiving a valid dossier, the licensing agency will consider and issue an additional request if the dossier is incomplete (this additional request is only made once), within 7 working days from the date of receipt of a complete and valid dossier, the agency shall issue a decision to grant or not to grant a license, in case of refusal to grant a license, a written explanation must be made. Thus, normally, including the time of modification and supplementation, about 10 working days, the enterprise will have results.

In case the operation contents of a representative office are inconsistent with Vietnam’s commitments and the establishment of a representative office is not specified in a specialized legal document, the licensing agency should consult the specialized management Ministry within 03 working days upon receipt of the application. Within 05 working days from the date of receipt of a written request for opinion from the licensing agency, the specialized management Ministry shall issue a written statement stating whether to agree or disagree with the license to establish a representative office. Within 05 working days from the date of receiving comments from the specialized management Ministries, the licensing agency shall issue or not grant a license to establish the representative office for foreign traders. In case of not licensing, there must be a document clearly stating the reason.

Above is an article about the procedure of establishing a representative office for foreign traders, if you have any questions or any other legal advice, please contact KAV Lawyers by the contacts below:

Email: [email protected] or [email protected]

Phone: (+84) 28 6270 7075 or (+84) 949 761 861

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