Establishing a Foreign Company’s Representative Office in Vietnam

Short answer: Foreign traders may establish a representative office in Vietnam for trade promotion and market research — not for direct profit-making business. The representative office establishment license is issued by the Department of Industry and Trade (not the Business Registration Office). Conditions: the foreign trader is lawfully established and registered in its home country; has operated for at least 1 year; the scope of activities conforms to Vietnam’s international commitments. The license term is 5 years, extendable. Legal basis: the Commercial Law 2005; Decree 07/2016/ND-CP.

Legal basis

• The Commercial Law 2005 — Articles 16–23 (representative offices and branches of foreign traders in Vietnam);
• Decree 07/2016/ND-CP detailing the Commercial Law on representative offices and branches of foreign traders in Vietnam.

Licensing conditions

• The foreign trader is established and registered under the laws of a country or territory party to an international treaty to which Vietnam is a party, or recognized by the laws of such countries or territories;
• Has operated for at least 1 year from the date of establishment or registration;
• The representative office’s scope of activities must conform to Vietnam’s commitments in international treaties to which Vietnam is a party;
• If the scope of activities does not conform to Vietnam’s commitments, or the trader is from a country or territory not party to an international treaty to which Vietnam is a party: Minister of the specialized management ministry approval is required.

License application dossier

• Application form for the representative office establishment license per the prescribed form;
• Copy of the foreign trader’s business registration certificate or equivalent document (consular legalized, notarized translation);
• Appointment document for the representative office head;
• Copy of the head’s passport/ID card (consular legalized, notarized translation if foreign);
• Copy of the lease agreement for the representative office’s location;
• Copy of the audited financial statements or confirmation of financial status for the most recent year.

Procedure

Step 1. Prepare and submit the dossier

Submit 01 set of the dossier to the Department of Industry and Trade of the province/city where the representative office is intended to be located — in person, by post, or online.

Step 2. Appraisal

The Department of Industry and Trade appraises; if consultation with the specialized management ministry is needed, it is conducted.

Step 3. Receive the license

Processing time follows Decree 07/2016/ND-CP for valid dossiers; receive the Representative Office Establishment License (5-year term).

Step 4. After licensing

Carve a seal (if needed); open an account; register labor, PIT, and social insurance for personnel; annual activity reports to the Department of Industry and Trade.

What a foreign trader’s representative office may/may not do

• May: trade promotion, market research, finding partners; representation under the foreign trader’s authorization;
• May not: directly conduct business, sign profit-making purchase contracts, issue invoices; sublease the representative office;
• The head and foreign personnel must have work permits (except exempted cases) and lawful residence.

Extension, adjustment, termination of the license

• Extension: submit the extension dossier before the license expires; each extension is 5 years;
• Adjustment: changes of name, address, head, scope of activities, etc. require license adjustment procedures;
• Termination: the foreign trader decides to terminate; complete tax and debt obligations; notify the Department of Industry and Trade.

Frequently asked questions

Must a foreign company’s representative office pay taxes?

No VAT or CIT arises from business activities (as it does not conduct business); but it must declare and pay PIT for employees and perform social insurance obligations.

Can the representative office head be Vietnamese?

Yes. The head may be Vietnamese or foreign; foreigners need work permits and lawful residence.

Is a representative office enough to do business in Vietnam?

Not enough. To directly conduct business, a foreign trader must establish a branch (may conduct business within the licensed scope) or establish a foreign-invested enterprise.

Notes on applying current laws

Representative office procedures for foreign traders fall under the Department of Industry and Trade (unlike representative offices of Vietnamese enterprises under the Business Registration Office) — confusing the authority is a common error causing dossiers to be passed around. Contact an ANT Legal lawyer at 0966.475.966 for advice and procedure execution.

Common risks to watch out for

• Submitting the dossier to the wrong authority (Business Registration Office instead of Department of Industry and Trade);
• Foreign documents not consular legalized or notarized translated;
• The representative office actually conducting profit-making business;
• Not extending the license when the 5-year term expires.

How ANT Legal can help

ANT Legal advises on conditions, drafts dossiers, and carries out procedures for issuance, extension, and adjustment of foreign trader representative office establishment licenses; advises on tax and labor compliance. For quick advice, please contact our lawyers at 0966.475.966.

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