What Is Advantage Of Opening Representative Office In Vietnam?

A representative office offers a low-cost entry for foreign investors to better understand Vietnam’s business market. The aricle below shall illustrate the advantages of opening a representative office in Vietnam.

Read more: Compulsory obligations of Representative Office in Vietnam?

1. What is Representative Office?

The 2005 Commercial Law defines the RO of foreign traders in Vietnam as a dependent unit of foreign traders, established under the provisions of Vietnamese law to understand the market and implement a number of trade promotion activities permitted by Vietnamese law.

The foundation of RO of foreign entity in Vietnam is governed under Vietnam Commercial Law 2005 and Decree 07/2016 / ND-CP.

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2. Functions of a representative office

RO is engaged in these following activities:

– Performing the function of liason office;

– Conducting market research;

– Promoting business investment oppertunities of parent company who it reperesents for through meetings and other activities;

– Supervising the implementation of foreign company’ contracts signed with Vietnamese partners or related to the Vietnamese market.

3. Advantages of a representative office

Opening a representative office has more advantages than opening a foreign company in Vietnam, such as:

– Easier to establish and register than that of foreign corporate: less procedures and time.

– An effective tool to research Vietnamese market: At first, the primary purpose of foreign investors when entering Vietnam market is understanding the market, undertaking research on clients;

– An effective tool to promote commercial activities, seek partners, expend business market. Can find goods and services purchase opportunities, and can conduct research and develop products.

– Having rights to recruit Vietnam employees and foreign employees (required to obtain work permit and temporary residence card when working in Vietnam); open bank accounts in foreign curriencies or Vietnam dong at commercial banks;

– No company or corporate tax applied: Representative office is only required the personal income tax for employees. Setting up a RO in Vietnam is usually fast and efficient. Investors will need to set up a separate finance function within RO as will be required to submit audited accounts. This means that all money that passes between the parent and representative office is legally tracked, offering you a watertight audit trail and a good controlling system.

– No requirement for a minimum amount of capital:

+ Foreign-owned companies need to have an investment plan. This is not a small amount and in many cases, investors want to test the market first before making these capital commitments.

+ As a foreign representative office, investors will not have any capital and therefore capital needs do not apply. For some investors that also means they won’t have to play with the minimum capital and do everything by law.

– Only one report that must be submitted to the Government, which is quite easy task. 


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4. Why should you use our service?

With over 10 years of experience operating in the field of law with a team of experienced, enthusiastic personnel. LNP LAW is confident to bring the best service to customers in the fields of Investment, Intellectual Property, Business. The above article has summarized What Is Advantage Of Opening Representative Office In Vietnam?

Customers wishing to setting up a RO in Vietnam will receive the services:

– Advice, support, answer your questions related to the establishment and legal issues after establishment representative office;

– Representing customers to submit documents, receive results, solve legal issues with the competent state agencies;

– Support customer after establishment with accounting procedures – tax

– Other jobs requested by customers.