In the current process of market integration, enterprises hope to set up branches abroad to open up and expand the business market, to reach the international level. In the following article, Luatvn.vn wants to send customers the latest Procedures for setting up a foreign-invested company Vietnam.
- 1 What is a branch?
- 2 What are the conditions for setting up a branch office of a foreign company in Vietnam?
- 3 Are you eligible to grant a permit to set up a representative office for a foreign company in Vietnam?
- 4 Procedures for the establishment of representative offices of foreign companies
- 5 Procedure for submitting an application for a foreign company to set up a branch office in Vietnam
What is a branch?
According to Article 44, paragraph 1, of the Enterprise Act 2020, a branch office is an affiliate of an enterprise and is responsible for performing all or part of the functions of the enterprise, including the functions of an authorized representative. The line of business of the branch office must be consistent with the line of business of the enterprise.
- Branches may perform some or all of the functions of the enterprise, and branches may be established in multiple places, located in the province or municipality of the enterprise outside the central government. Customers can query to branch office addresses. Contracts or transactions can be executed without going directly to the corporate headquarters address.
- Branches can operate and do business like a company, with their own seals, so partners and customers can sign contracts with branches.
What are the conditions for setting up a branch office of a foreign company in Vietnam?
The initial standard
The primary branch office is the epitome of the business, regardless of where the branch office is located. Many foreign companies do not have to set up operations in Vietnam, but instead open branches in Vietnam to reduce administrative procedures and remain operational. Article 3 of Decree No. 07/2016/ND-CP provides that foreign traders are allowed to set up branches in Viet Nam in accordance with Vietnam’s commitments under international treaties on Vietnam as a member and foreign trader. A branch of the same name within a province or municipality. You can refer to the article procedures for setting up a foreign-invested company in Vietnam.
To establish a foreign company in Viet Nam
- Foreign traders may establish and register their operations in accordance with the laws of the countries or regions to which Viet Nam is a party to international treaties or the laws of those countries and regions.
- Foreign traders have been in business for at least 05 years from the date of establishment or registration;
- If a foreign business registration certificate or equivalent document has a business term, the period must be at least 01 years from the date of application;
- The contents of the branch must be consistent with Vietnam’s commitment to open markets in international treaties signed by Viet Nam and the scope of business of foreign traders;
Are you eligible to grant a permit to set up a representative office for a foreign company in Vietnam?
Article 6 of Decree No. 07/2016/ND-CP stipulates that if a branch office is not established, the Ministry of Industry and Trade shall issue, reissue, adjust, extend and revoke the license to establish a branch office and terminate the operation of the branch office. It is provided for in special legal documents. In fact, foreign companies wishing to set up branches in Vietnam still need to apply to the Ministry of Industry and Trade.
Procedures for the establishment of representative offices of foreign companies
The files for the establishment of branches of foreign companies include
- A permit application form for the establishment of a branch office made on the basis of the form of the Ministry of Industry and Trade signed by the representative of the head of a foreign trader;
- A copy of a commercial registration certificate or equivalent for a foreign investor;
- Documents on the appointment/appointment of branch heads by foreign investors;
- A copy of the audited financial statements or a written proof of the performance of tax or financial obligations in the most recent financial year or an equivalent document issued by the competent authority or organization where the trader is located. The establishment or certification of the existence of a foreign trader in the most recent fiscal year;
- A copy of the branch’s charter;
- A copy of the passport or identity card or citizenship card of the head of the branch (if Vietnamese) or a copy of the passport (if he or she is a foreigner);
Documents relating to the proposed location of the branch office include
- A copy of the memorandum of understanding or agreement at the location or prove that the trader has the right to use and use the location to find a copy of the branch office’s documents;
- A copy of the document on the proposed location of the branch office, as provided for in Article 28 of Decree No. 07/2016/ND-CP and the relevant legal provisions.
Procedure for submitting an application for a foreign company to set up a branch office in Vietnam
- After the full set of documents, including the above documents, is prepared, foreign investors submit their applications to the Ministry of Industry and Trade either directly or by post or online (if eligible).
- Upon receipt of the file, within 03 business days, the file handler will inspect and request additional information if the file is incomplete or invalid. You can request additional records at most once during the processing of the request. Within 7 working days from the date of receipt of the complete and valid information, the issuing authority shall grant or not grant permission to foreign traders to set up a representative office. Make a clear case procedures for setting up a foreign-invested company.
- If the contents of branch operations are not specified in the professional legal documents, the Ministry of Industry and Trade shall submit a written request to the Ministry of Professional Management within 3 working days from the date of receipt of the complete and valid information. The Department of Professional Management shall, within 5 working days from the date of receipt of the written request for comments from the licensing authority, issue a written statement expressly agreeing or disagreeing with the granting of a license to the branch office. Within 5 working days from the date of receipt of the documents from the Department of Professional Management, the licensing authority shall issue or refuse to issue a branch license to a foreign trader. If so, there must be a written explanation of why.