As a dependent unit of the enterprise, foreign company can set up represetative office to explore the market and carry out trade promotion activities. However, due to foreign investment, companiy should learn about the provisions of Vietnamese law on establishing represetative office of foreign traders.
1. Legal provisions on represetative office of foreign company in Vietnam
Traders are lawfully established economic organizations and individuals conducting commercial activities independently, regularly and with business registration. Thus, the foreign company satisfies the conditions to be considered a foreign trader in Vietnam.
The 2005 Commercial Law defines the represetative office 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 Vietnamese law provides for the following provisions regarding represetative office of foreign traders.
2. Scope of operation of represetative office of foreign company in Vietnam
Represetative office of traders must not carry out the following activities:
1. To enter into contracts, to amend and supplement contracts already entered into by foreign traders;
2. Sales promotion or hiring other traders to conduct sales promotion in Vietnam for traders that representative offices;
3. Directly conducting commercial advertising activities;
5. Directly displaying and introducing goods and services of traders that the representative office has. Except for display and introduction of goods at the office’s office;
6. Directly organizing, participating in trade fairs and exhibitions.
Cases 1, 3, 4 and 5 if the representative office is authorized by the trader, may sign a contract with other traders providing the corresponding services to carry out the work. Particularly for case 1, the authorized person must be the head of the representative office. Note that the above regulations apply to represetative office of both Vietnamese and foreign traders.
3. Conditions for foreign companies to set up represetative office
Foreign company need to meet the following conditions to establish a represetative office in Vietnam:
– Be established and registered in accordance with the laws of the country where the company has nationality;
– The company has operated in a foreign country for at least 01 year from the date of its establishment or registration;
– In case the business registration certificate or equivalent document of the foreign company stipulates the duration of operation, this period must be at least 01 year from the date of filing the dossier in Vietnam;
– The content of operations of the foreign company’s representative office in Vietnam is consistent with Vietnam’s commitments in international treaties to which Vietnam is a member.
4. Dossiers of application for licenses to set up represetative office of foreign company
Foreign company prepare the following documents to establish represetative office in Vietnam:
– Application for a license to establish a representative office;
– A copy of the business registration certificate or other equivalent documents of the foreign company;
– Written appointment/appointment of the head of the company’s representative office;
– A copy of the audited financial statement or a document certifying the performance of tax or financial obligations or equivalent documents proving the existence of the company abroad. These documents are issued or certified by the competent agency of the host country;
– Documents about the location where the representative office is expected to be located, including a copy of the lease agreement or documents proving that the foreign company has the right to exploit and use the location to set up the representative office.
All the above documents (except for the application for a license) must be translated into Vietnamese and certified in accordance with the laws of Vietnam. Copies of the business registration certificate or other papers of equivalent value should be consularly legalized by Vietnamese competent agencies according to the provisions of Vietnamese law.
5. Competence to handle dossiers of setting up representative offices of foreign company
Agency competent to deal with: Department of Industry and Trade where the enterprise is headquartered. Foreign enterprises authorize other organizations and individuals to register for setting up representative offices.
Within 7 working days after receiving a complete and valid dossier, the provincial-level Industry and Trade Department shall grant a license to set up representative offices for foreign companies. In case of refusal to grant, there must be a document clearly stating the reason.
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