Opening a Foreign Company’s Branch in Vietnam: Procedure

Short answer: Foreign traders may establish a branch in Vietnam to directly conduct business within the scope of the license — unlike a representative office (no business allowed). The branch establishment license is issued by the Ministry of Industry and Trade. Conditions: the foreign trader has operated lawfully for at least 5 years; the scope of activities conforms to Vietnam’s international commitments. The branch has no legal personality; the foreign trader is liable for all activities of the branch. Legal basis: the Commercial Law 2005; Decree 07/2016/ND-CP.

Legal basis

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

Foreign trader’s branch: what can it do?

• Directly conduct business: trading goods, providing services within the scope stated in the license;
• Sign contracts, issue invoices, open bank accounts in the branch’s name;
• No legal personality — the foreign trader bears liability for all activities of the branch;
• The branch head operates under the foreign trader’s authorization.

Conditions for branch establishment licensing

• The foreign trader is established and lawfully 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 5 years from the date of establishment or registration (stricter than for representative offices);
• The branch’s scope of activities must conform to Vietnam’s market opening commitments;
• If not conforming to commitments: Minister of Industry and Trade approval is required.

License application dossier

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

Procedure

Step 1. Submit the dossier

Submit 01 set of the dossier to the Ministry of Industry and Trade (assigned department/unit) — in person, by post, or online.

Step 2. Appraisal and licensing

The Ministry of Industry and Trade appraises, consults relevant ministries and agencies (if needed); issues the Branch Establishment License for valid dossiers.

Step 3. After licensing

Carve a seal; open bank accounts; register for tax (dependent unit code), e-invoices, digital signature; register labor and social insurance; annual activity reports.

Tax obligations of a foreign trader’s branch

• Pay VAT and CIT on income arising in Vietnam like Vietnamese enterprises;
• Declare and pay PIT for employees; foreign contractor tax (if any);
• Perform accounting, auditing, and financial reporting as prescribed;
• Profit repatriation follows foreign exchange management rules.

Extension, adjustment, termination

• The license is valid for 5 years, extendable;
• Changes of name, address, head, or scope of activities: carry out license adjustment procedures;
• Termination: complete tax and debt obligations; notify the Ministry of Industry and Trade.

Frequently asked questions

How does a foreign company’s branch differ from a 100% foreign-owned company?

A branch has no legal personality and the parent company bears unlimited liability; a 100% foreign-owned company is an independent Vietnamese legal entity with limited liability within charter capital. A branch may only conduct business within the licensed scope; an FDI company may conduct registered business lines.

Open a branch or a representative office?

To directly conduct business (sign contracts, issue invoices): open a branch. For only a trade promotion presence: open a representative office (simpler procedure, 1-year operation condition).

Can the branch remit profits to the parent company?

Yes, after completing tax obligations in Vietnam, following foreign exchange management rules.

Notes on applying current laws

A foreign trader’s branch is licensed by the Ministry of Industry and Trade (unlike branches of Vietnamese enterprises licensed by the Business Registration Office) — confusing the authority causes the dossier to be passed around. The 5-year operation condition also needs proof with valid documents. 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 licensing authority;
• Foreign documents not consular legalized or notarized translated;
• Operating beyond the scope stated in the license;
• Failing to submit annual activity reports.

How ANT Legal can help

ANT Legal advises on choosing a presence model (branch/representative office/FDI company); drafts dossiers and carries out procedures for foreign trader branch establishment licensing; advises on tax and labor compliance. For quick advice, please contact our lawyers at 0966.475.966.

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