{"id":5055,"date":"2022-08-19T12:02:08","date_gmt":"2022-08-19T05:02:08","guid":{"rendered":"https:\/\/pl-partners.vn\/?p=5055"},"modified":"2022-08-19T14:16:17","modified_gmt":"2022-08-19T07:16:17","slug":"foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam","status":"publish","type":"post","link":"https:\/\/pl-partners.vn\/en\/foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam\/","title":{"rendered":"Foreign enterprises should choose to establish representative offices or branches of foreign traders in Vietnam"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">N\u1ed9i dung b\u00e0i vi\u1ebft<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/pl-partners.vn\/en\/foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam\/#QUESTION\" title=\"QUESTION:\">QUESTION:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/pl-partners.vn\/en\/foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam\/#ANSWER\" title=\"ANSWER:\">ANSWER:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/pl-partners.vn\/en\/foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam\/#Similarities\" title=\"Similarities:\">Similarities:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/pl-partners.vn\/en\/foreign-enterprises-should-choose-to-establish-representative-offices-or-branches-of-foreign-traders-in-vietnam\/#Differences\" title=\"Differences:\">Differences:<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"QUESTION\"><\/span><span style=\"color: #003366;\"><strong>QUESTION<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Hello, my friend has a company in a foreign country, now he wants to expand the market to operate in Vietnam. However, he wondered whether to choose to establish a representative office or a branch of a foreign trader in Vietnam. I hope to get an answer from a lawyer, thank you.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"ANSWER\"><\/span><span style=\"color: #003366;\"><strong>ANSWER<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Thank you for trusting and sending questions to PL and Partners Law firm. To have a basis for choosing to establish a representative office or branch of a foreign trader in Vietnam, we would like to invite you to learn the similarities and differences between these two types. The details are as follows:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Similarities\"><\/span><span style=\"color: #ed1c24;\"><strong>Similarities:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul style=\"text-align: justify;\">\n<li><span style=\"color: #000000;\">Both are dependent units of foreign traders.<\/span><\/li>\n<li><span style=\"color: #000000;\">Having no legal status.<\/span><\/li>\n<li><span style=\"color: #000000;\">Term of operation: a maximum of 05 years and can be extended.<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Differences\"><\/span><strong><span style=\"color: #ed1c24;\">Differences:<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 1392px; width: 100%; border-collapse: collapse; border-color: #000000;\" border=\"1\" cellspacing=\"1\" cellpadding=\"1\">\n<tbody>\n<tr style=\"height: 21px;\">\n<td style=\"width: 9.320341047503046%; height: 21px;\" width=\"12%\"><span style=\"color: #000000;\"><strong>Criteria<\/strong><\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 21px;\"><strong>\u00a0<span style=\"color: #000000;\">Representative Office (RO)<\/span><\/strong><\/td>\n<td style=\"width: 35.40397888753553%; height: 21px;\"><strong><span style=\"color: #000000;\">Branch<\/span><\/strong><\/td>\n<\/tr>\n<tr style=\"height: 63px;\">\n<td style=\"width: 9.320341047503046%; height: 63px;\"><span style=\"color: #000000;\">Business scope<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 63px;\"><span style=\"color: #000000;\">Perform the function of a liaison office, researching the market, promoting opportunities for business investment of the traders they represent.<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 63px;\"><span style=\"color: #000000;\">Carry out trading activities and other commercial activities in accordance with the establishment license.<\/span><\/td>\n<\/tr>\n<tr style=\"height: 63px;\">\n<td style=\"width: 9.320341047503046%; height: 63px;\"><span style=\"color: #000000;\">Entering into contracts<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 63px;\"><span style=\"color: #000000;\"><strong>Not<\/strong> entitled to enter into contracts<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 63px;\"><span style=\"color: #000000;\">To be entitled to enter into contracts in Vietnam in accordance with the business scope specified in the license.<\/span><\/td>\n<\/tr>\n<tr style=\"height: 84px;\">\n<td style=\"width: 9.320341047503046%; height: 84px;\"><span style=\"color: #000000;\">Profitable activities and transferring profit<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 84px;\"><span style=\"color: #000000;\">No direct profit-making activities are carried out in Vietnam.<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 84px;\"><span style=\"color: #000000;\">To be entitled to make direct profit in Vietnam and transfer profits abroad in accordance with Vietnamese law.<\/span><\/td>\n<\/tr>\n<tr style=\"height: 84px;\">\n<td style=\"width: 9.320341047503046%; height: 84px;\"><span style=\"color: #000000;\">Financial obligations<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 84px;\"><span style=\"color: #000000;\">To declare and pay Personal Income Tax on behalf of employees working at the RO.<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 84px;\"><span style=\"color: #000000;\">To declare and pay license fees, corporate income tax, value added tax, personal income tax on behalf of employees, import and export tax (if any) and special consumption tax (if any);<\/span><\/td>\n<\/tr>\n<tr style=\"height: 781px;\">\n<td style=\"width: 9.320341047503046%; height: 781px;\"><span style=\"color: #000000;\">Condition for establishment<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 781px;\"><span style=\"color: #000000;\">Traders shall meet the following conditions:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">1. Foreign traders shall establish and register their business in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a signatory or recognized by the laws of these countries and territories;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">2. Foreign traders have operated for at least <strong>01 year<\/strong> from the date of establishment or registration;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">3. In case the foreign trader&#8217;s Business Registration Certificate or paper of equivalent value has a term for operation, such time limit must be at least 01 year from the date of application submission;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">4. The business scope of the Representative Office shall be consistent with <strong>Vietnam&#8217;s commitments<\/strong> in international treaties to which Vietnam is a signatory;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">5. In case the business scope of the Representative Office is inconsistent with the commitments of Vietnam or the foreign trader is not a member of a country or territory participating in an international treaty to which Vietnam is a signatory, the establishment of the Representative Office shall be approved by the specialized Minister or Head of the ministerial-level agency.<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 781px;\"><span style=\"color: #000000;\">Traders shall meet the following conditions:<\/span><\/p>\n<p><span style=\"color: #000000;\">1. Foreign traders shall establish and register their business in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a signatory or recognized by the laws of these countries and territories;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">2. Foreign traders have operated for at least <strong>05 years<\/strong> from the date of establishment or registration;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">3. In case the foreign trader&#8217;s Business Registration Certificate or paper of equivalent value has a term for operation, such time limit must be at least 01 year from the date of application submission;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">4. The business scope of the Branch shall be consistent with Vietnam&#8217;s <strong>commitment on market<\/strong> <strong>access<\/strong> in international treaties to which Vietnam is a signatory and shall be <strong>appropriate for the business lines<\/strong> of foreign traders;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\">5. In case the Branch&#8217;s business scope is not consistent with Vietnam&#8217;s commitments or the foreign trader is not a member of a country or territory participating in an international treaty to which Vietnam is a signatory, the establishment of the Branch shall be approved by the specialized Minister or Head of the ministerial-level agency.<\/span><\/p>\n<p>&nbsp;<\/td>\n<\/tr>\n<tr style=\"height: 254px;\">\n<td style=\"width: 9.320341047503046%; height: 254px;\"><span style=\"color: #000000;\">Head of the unit<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 254px;\"><span style=\"color: #000000;\">The head of a representative office shall not concurrently hold the following positions:<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Head of Branch of the same foreign trader;<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Heads of Branch of other foreign traders;<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Legal representative of that foreign trader or another foreign trader;<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Legal representative of an economic organization established in accordance with the laws of Vietnam.<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 254px;\"><span style=\"color: #000000;\">The Head of the Branch shall not concurrently hold the following positions:<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Head of the Representative Office of the same foreign trader;<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Head of Representative Office of other foreign traders;<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8211; Legal representative of an economic organization established in accordance with the laws of Vietnam.<\/span><\/td>\n<\/tr>\n<tr style=\"height: 42px;\">\n<td style=\"width: 9.320341047503046%; height: 42px;\"><span style=\"color: #000000;\">Licensing Agencies<\/span><\/td>\n<td style=\"width: 33.94234673162809%; height: 42px;\"><span style=\"color: #000000;\">Department of Industry and Trade<\/span><\/td>\n<td style=\"width: 35.40397888753553%; height: 42px;\"><span style=\"color: #000000;\">Ministry of Industry and Trade<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">The procedure for a foreign trader to establish a representative office or branch will be more complicated than for Vietnamese enterprises, especially the branch. The establishment of a branch of a foreign trader in Vietnam requires approval from the Ministry of Industry and Trade with quite strict conditions and regulations. Therefore, setting up a branch will take a lot of time.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\"><span style=\"color: #ed1c24;\"><strong><u>Therefore,<\/u><\/strong><\/span> depending on the needs, specific situation as well as operational orientation of the Company, your friend can consider and choose the appropriate model.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Besides the representative office or branch model, establishing an enterprise in Vietnam is also being chosen by foreign businesses because of its advantages. For the choice of incorporating enterprises in Vietnam, only some business lines shall consult the Ministry of Industry and Trade, not all cases like the branch model.<\/span><\/p>\n<table style=\"width: 100%; border-collapse: collapse; background-color: #e3f1fa;\" border=\"1\/2pt\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\">\n<ul>\n<li style=\"text-align: justify;\"><span style=\"color: #0000ff; font-size: 16px;\">The above-mentioned consulting opinions are based on the provisions of the law and information provided by the client. Any legal opinions expressed (unless cited) are our own and for reference only.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"color: #0000ff; font-size: 16px;\">At the time you read this article, the laws we refer to may have expired, or have been amended or supplemented. Therefore, we do not guarantee that the above information can be applied to all cases, to all subjects, at all times.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"color: #0000ff; font-size: 16px;\">For accurate and specific consultancy, please contact <a href=\"https:\/\/pl-partners.vn\/\">PL&amp;Partners<\/a> lawyer via call center <strong>093.1111.060<\/strong> or email: <strong>info@pl-partners.vn<\/strong>.<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>QUESTION: Hello, my friend has a company in a foreign country, now he wants to expand the market to operate in Vietnam. However, he wondered whether to choose to establish a representative office or a branch of a foreign trader in Vietnam. I hope to get an answer from a lawyer, thank you. ANSWER: Thank [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":5059,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[198],"class_list":["post-5055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-info","tag-law-qa-en"],"_links":{"self":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts\/5055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/comments?post=5055"}],"version-history":[{"count":0,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts\/5055\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/media\/5059"}],"wp:attachment":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/media?parent=5055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/categories?post=5055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/tags?post=5055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}