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How To Setup Foreign Representative Office In Viet Nam

Foreign representative offices are not allowed to perform profit-making activities, and their operation is limited to market research and other non-for-profit activities. In case you do not have sufficient information to make a decision to invest in Vietnam yet, setup representative office would be a suitable foothold in Vietnam.

setup representative office in Vietnam

Basic rights and obligations of representative office in Viet Nam

Generally speaking, initial and operation cost of representative office is much lower than the cost of having a subsidiary. On the contrary, having a subsidiary in Vietnam in the form of either Joint Stock Company or Limited Liability Company is a better form of investment for an investor who intends to manufacture products in Vietnam or to conduct sales activities. As long as you follow the regulations in Vietnam, establishing a company in Vietnam gives you more flexibility in business activities.

How to setup a representative office in Viet Nam? Here are 4 keys steps with highlight info that will be useful for you before entry the local market:

Step 01 of four: Know about the local regulations

  • Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.
  • A representative office shall be complied with labor, social insurance regulations by register for labor use and pay monthly insurance. The compulsory payable amount of social insurance may reach up to 34,5% of salary budget.
  • Expats who working for more than 3 months shall granted working permits.
  • A representative office shall be complied with personal income tax regulations by register tax code number for every staff and declare for monthly personal income tax, prepare and submit annually settlement reports. The person income tax rate for none resident is 20% on the income earnt ins side Viet Nam, for resident is from 5 to 35% on global incomes.
  • A representative office shall be complied with other regulations such as Anti money laundering law, other tax law, commercial law for any activity in Viet Nam. In particular, representative should collect and manage for all the business records in related for any query or question from competent authorities. After every 3 to 5 years of operations, the tax department will perform inspection procedures to verify the true, fair and lawful of each transaction…
  • A representative office shall prepare and submit annual report for the Licensing department.
  • The operation term of a representative office is 5 years at maximum and can be extended.

Step 02 of four: Prepare for the required papers to setup representative office

  • Lawful rental contract. Not any place / address is allowed for granting a representative office license.
  • Papers form parent company: Incorporation certificate, certificate of completion of tax, the latest audited financial statement. These papers should be legalized and translate in to Vietnamese.
  • Papers of the chief of representative office: Passport, appointment letter, Curriculum Vitae.

Step 03 of four: Obtaining business license for the representative office

  • Complete all the papers and dossiers before submitting the application.
  • Follow up with the process and query or requirement from the officers.
  • Obtaining the license within 20 days or earlier.
  • Carve for the legal stamp.
  • Register electronic signature for tax and labor declaration.

Step 04 of four: Complete the initial compliance procedures before operating the office

  • Notification of operation of representative office
  • Publish on three consecutive issues of a printed or online newspaper licensed in Vietnam
  • The representative office must officially commence its operation and notify in writing the provincial/municipal Trade Service of the commencement of its operation at the registered head office.
  • Employee profile and labor contracts
  • Tax code – Personal income tax for local staff and expats
  • Registering tax code for representative office
  • Registering personal tax code for employee
  • Declaration for office’s bank account
  • Labor declaration
  • Declaration of using employees

With more than 10 years of delivering business consultation for  more than 1000 foreign representative offices in Viet Nam, Viva Business Consulting is capable to consult and implement any query you have in the most practical way.

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