Establishing Branch or Representative Office For a Local Company

Establishing Branch or Representative Office For a Local Company

All foreign businesses have the right to establish branch or foreign representative office in Vietnam. However, depending on the situation, the choice of establishing branch or representative office will bring different advantages and disadvantages. There are some analyzes to help businesses consider choosing to establish a branch or a foreign representative office in Vietnam.

establishing branch or representative office

A. Advantages of establishing branch or representative office:


  • Can do full business activities such as trading, manufacturing, service, inventory… directly (upon the business lines of headquarter only).
  • Can register and issue VAT invoice independently.
  • Can keep accounting records independently or dependently.
  • Can enter into contracts, to amend or supplement contracts directly.

Foreign representative office:

B. Disadvantages of establishing branch or representative office:


  • Initial setting up procedures more complicated.
  • Shall setting up accounting system, tax declaration separately and follow monthly, quarterly, annually compliance reports to competent state agencies.
  • Annual license tax.
  • Shall clear all tax obligation (final tax settlement) before shutdown.

Foreign representative office:

  • Not to directly conduct profit-generating activities: No sales, no invoice, no inventory,…
  • Can not issue invoices.
  • Not to enter into contracts, not to amend or supplement contracts, except where chief representatives obtain valid letters of authorization from foreign the headquarter or other special cases.


We have been providing service for thousands of multinational companies and foreign representative offices in Vietnam. We are able to understand deeply local business laws and regulations as well as identify potential risks in advance that to provide tailored solutions, in the most practical manner, beyond the limitations. We do guarantee your best interests and expectation in everything we do.

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