Conditions for granting a license to establish a representative office for foreign traders

1. Can a foreign trader that has been operating for 06 months from the date of establishment be granted a License to establish a Representative Office?

Pursuant to Article 7 of Decree 07/2016/ND-CP stipulating the conditions for granting a License to establish a Representative Office as follows:

Foreign traders are granted a License to establish a Representative Office when meeting the following conditions: following:

(1) Foreign traders are established and registered in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a member or recognized by the laws of these countries and territories;

(2) Foreign traders that have been operating for at least 01 year from the date of establishment or registration;

(3) In case the Business Registration Certificate or equivalent document of a foreign trader stipulates an operating term, that term must be at least 01 year from the date of application;

(4) The content of operations of a Representative Office must be consistent with Vietnam’s commitments in international treaties to which Vietnam is a member;

(5) In case the operational content of a Representative Office is not consistent with Vietnam’s commitments or the foreign trader does not belong to a country or territory participating in an international treaty to which Vietnam is a member, the establishment of a Representative Office must be approved by the Minister or Head of the ministerial-level agency with specialized management (hereinafter referred to as the Minister of specialized management).

Thus, based on Clause 2, Article 7 of the Decree. 07/2016/ND-CP then the foreign trader has been operating for at least 01 year from the date of establishment or registration. Therefore, the case you mentioned still does not meet the conditions to be granted a License to establish a Representative Office.

2. In what cases are establishment licenses not granted?

Pursuant to Article 14 of Decree 07/2016/ND-CP stipulating cases of not granting Representative Office Establishment Licenses or Branch Establishment Licenses as follows:

Licensing agencies do not issue Representative Office Establishment Licenses or Branch Establishment Licenses to foreign traders in the following cases The following:

– Does not meet one of the conditions specified in Article 7 in case of applying for a License to establish a Representative Office or does not meet one of the conditions specified in Article 8 in case of applying for a License to establish a Branch.

– Foreign traders apply for a License to establish a Representative Office or a License to establish a Branch within 02 years, from date of revocation of the License to establish a Representative Office, License to establish a Branch in Vietnam according to the provisions of Article 44 of this Decree.

– The establishment of Representative Offices, Branches is restricted according to the provisions of law for reasons of national defense, national security, order, social safety, social ethics and public health.

– Other cases as prescribed by law. law.

3. Can representative offices of foreign traders perform services for customers of parent companies abroad?

(1) Pursuant to Article 17 of the 2005 Commercial Law, the rights of Representative Offices are stipulated as follows:

– Operate in accordance with the purpose, scope and duration specified in the license to establish the Representative Office.

– Rent headquarters, rent and buy necessary facilities and equipment for the operation of the Representative Office.

– Recruitment employees are Vietnamese or foreigners to work at the Representative Office in accordance with the provisions of Vietnamese law.

– Open an account in foreign currency, in Vietnamese Dong with foreign currency origin at a bank licensed to operate in Vietnam and can only use this account for the activities of the Representative Office.

– Have a seal bearing the name of the Representative Office in accordance with the provisions of Vietnamese law. Male.

– Other rights as prescribed by law.

(2) Pursuant to Article 18 of the Commercial Law 2005 stipulates the obligations of Representative Offices as follows:

– Must not conduct directly profitable activities in Vietnam.

– Only carry out trade promotion activities within the scope permitted by this Law.

– Do not enter into contracts, amend or supplement contracts already signed by foreign traders, except in cases where the Head of the Representative Office has a legal power of attorney from the foreign trader or the cases specified in Clauses 2, 3 and 4, Article 17 of the Law This.

– Pay taxes, fees, charges and perform other financial obligations according to the provisions of Vietnamese law.

– Report on the activities of the Representative Office according to the provisions of Vietnamese law.

– Other obligations according to the provisions of the law.

From the above regulations, the representative office Representatives are not allowed to engage in or carry out directly profitable activities in Vietnam. Representative offices are only allowed to carry out trade promotion activities including promotional activities, commercial advertising, display and introduction of goods, services and trade fairs and exhibitions. Except for the following cases:

– Head of a Representative Office with a legal power of attorney from a foreign trader

– Rent a headquarters, rent, buy vehicles and equipment necessary for the operation of the Representative Office.

– Recruit Vietnamese and foreign workers to work at the Representative Office in accordance with Vietnamese law Nam.

– Open an account in foreign currency, in Vietnamese Dong of foreign currency origin at a bank licensed to operate in Vietnam and use this account for representative office operations.