Foreign companies intending to set up branches in Vietnam should note the provisions of the law on enterprises and investment. Branches of foreign companies are capable of performing all or part of the company’s operations.
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Conditions for opening a branch of foreign company in Vietnam
Vietnamese corporate law states that a branch is a dependent unit of the company, responsible for performing all or part of its functions, including authorized representatives. Each foreign company may establish no more than 1 branch within a province/city in Vietnam. Foreign companies are responsible before Vietnamese law for all operations of the branch in Vietnam. Competence to grant foreign companies branch establishment licenses under the Ministry of Industry and Trade.
In order to set up a branch in Vietnam, a foreign company needs to meet the following conditions:
– Foreign companies are established and registered under the laws of the country participating in treaties to which Vietnam is a signatory;
– Foreign companies have operated for at least 5 years from the date of establishment or registration;
– In case the business registration certificate or other equivalent papers of the foreign company stipulates the term of operation, the time limit is still at least 01 year from the date of filing;
– Operation contents of the branch:
+ In accordance with the commitment to open markets in international treaties to which Vietnam is a member;
+ Suitable for business activities of foreign companies.
Notes before opening a branch of foreign company in Vietnam
Foreign companies setting up branches should note the following provisions of Vietnamese law on the contents of their operations:
– The management and personnel of the branch are decided by the foreign company. The employment of foreign workers by branches must comply with the provisions of Vietnamese law and treaties to which Vietnam is a contracting party;
– The head office of a branch in Vietnam should be determined to the number of houses, roads, etc. Locations of foreign companies’ branches must comply with Vietnam’s laws on security, order, labor safety and other things. Branches of foreign companies are strictly forbidden to lend or sublease their headquarters;
– The name of the branch of a foreign company must include the name of the foreign company with the phrase “branch”. Branch names are written in the Vietnamese alphabet; the letters F, J, Z, W, digits and symbols. The branch name must be written or affixed at the branch office;
– Branches operating in conditional industries are only allowed to operate when they meet those conditions;
– The foreign company needs to have a document appointing the head when establishing the branch. The head of a foreign company branch does not fall into any of the following cases
+ Head of representative office of another foreign trader (individual, company);
+ Head of the company’s representative office in Vietnam;
+ Being the legal representative of another company established under the provisions of Vietnamese law.
In case a foreign company realizes that the branch’s operation in Vietnam is no longer needed, it may terminate its operation. The termination of branch operation is made in writing and sent to the competent authority for settlement in Vietnam.
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