SETTING UP REPRESENTATIVE OFFICE (RO) VIETNAM

Besides the form of limited liability company, joint stock company, representative office are also a popular form of business, most suitable for foreign organizations that want to access, expand markets and undertake a long-term investment in Vietnam. The conditions for establishing a representative office of a foreign organization are quite simple and easy to implement, of which the most important factor is that the foreign organization has been operating at least one year from the date of company establishment, providing a enterprise registration certificate and audited financial report of the latest fiscal year issued by the competent agency or organization where the foreign organization is located.
The procedures and timelines setting up a Representative Office (RO) in Vietnam from six to eight weeks, the RO license is valid for five years but can be extended for another five years.

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The main purpose of a RO is to conduct research on the Vietnam market and support the business activities of the parent company overseas. The procedures and timelines setting up a Representative Office (RO) in Vietnam from six to eight weeks, the RO license is valid for five years but can be extended for another five years.

Advantages of setting up a Representative Office (RO) in Vietnam

Setting up a Representative Office (RO) in Vietnam is easier than a Limited Liability Company (LLC) and Joint Stock Company (JSC);
The requirements registering a Representative Office (RO) are less than another Business Forms;
The registered capital and contribution is NOT required;
The scope of activities of the RO are similar to the another business forms in Vietnam, not allowed to carry out production and business activities;
Tax obligations are not applied for RO’ s operations due to the limitation on scope of activities, only the obligation of personal income tax is MUST.

Elements affecting the application for a Representative Office (RO) in Vietnam
#1- Conditions to set up a RO in Vietnam

The license for establishing a Representative Office (RO) will be granted to foreign investors who meet the following requirements:

Foreign companies belong to countries or territories that participated in the international treaties to which Vietnam is a member;
Foreign companies have been operating at least 01 year from the date of establishment or registration;
In cases the business registration certificate or equivalent documents of the foreign companies have specified duration, it must be at least 01 year remaining starting from the date of submitting the application.
The operation scope of Representative Office must be consistent with Vietnam's commitments in international treaties to which Vietnam is a member;
In case the operation scope of the Representative Office is not consistent with the commitments of Vietnam or the foreign investors do not belong to a specific country or territory that has joined the mutual treaty in which Vietnam is an official member, establishing a Representative Office must be approved by the Minister or Head of a specialized ministerial-level agency. .

#2- Rights and permitted business activities of a RO in Vietnam

** Rights of the RO

To have the right to decide on the personnel structure and recruitment (including both Vietnamese and foreign workers) according to Vietnam's labor law;
To rent and purchase the necessities for their operations such as rent or purchase offices, equipment, and facilities accordance with the provisions of Vietnamese law on security, order, occupational safety and other conditions;
To have their legitimate rights and interests protected during their operation in Vietnam in accordance with Vietnamese law.

** Permitted business activities of the RO

The main purpose of a RO is to conduct research on the Vietnam market and support the business activities of the parent company overseas. According to The Vietnamese Law stipulating the functions of a representative office as follow:

Act as a liaison office;
Promote/ build the cooperation projects of foreign companies in Vietnam;
Promote the opportunity for buying and selling goods, providing and consuming commercial services of parent company by the market research campaigns;
Manage and handle the execution of the contracts signing with Vietnamese partners;
Other activities are permitted by the Vietnamese Law

Latest updates on setting up a Representative Office in Vietnam in 2021

#1 - Required documents

All required foreign documents from foreign organizations would require one consular legalization by Vietnamese embassy or consulate overseas and translation into Vietnamese by Vietnamese competent agencies to use in accordance with the laws of Vietnam.

An application form for establishing Representative Office (“RO”) in Vietnam;
Consular legalization of the Business/ enterprise Certificate or equivalent documents of the foreign organization;
Consular legalization of the audited Financial Report of the last fiscal year;
Appointment letter of Chief of RO with his/ her passport/ ID card;
Notarized true copies of lease contact for the RO in Vietnam and documentations related to proof of ownership (Lease & Rental Contract for House, Apartment, Office);
Power of attorney in favor of authorized person to submit the application dossier;
Appointment letter and working experience certificate of foreign Chief of RO support for his/ her work permit application.

#2- Procedures for setting up a Representative Office (RO) in Vietnam

Step 1: Foreign companies prepare all mandatory documents in accordance with the provisions of the Law and submit them at the Receiving and Returning Department - Department of Industry and Trade.

Step 2: The Receiving and Returning Department - The Department of Industry and Trade receives the dossier and issues a Receipt.

Step 3: Within 03 working days from the date of receiving the dossier, if the dossier is incomplete or invalid, the Department of Industry and Trade shall send a request for dossier replenishment.

Within 07 working days from the date of receipt of complete and valid dossiers, the Department of Industry and Trade shall consider and grant the License to establish a representative office. In case the License is not granted, the Department of Industry and Trade must reply in written form, clearly stating the reason for not granting.
In case the operation contents of the Representative Office do not conform to the commitments of Vietnam or the foreign companies do not belong to a country or territory participating in an international treaty to which Vietnam is a contracting party, or the establishment representative offices not yet specified in specialized legal documents; The Service of Industry and Trade shall send a written request to the Ministry of specialized management within 03 working days from the date of receipt of a complete and valid application. Within 5 working days from the date of receipt of the written request for opinions from the licensing agency, the Ministries of specialized management shall issue a written document stating their agreement or disagreement with the granting of a license to establish a representative office. Within 05 working days from the date of receipt of the opinion of the Ministry of specialized management, the Service of Industry and Trade shall either grant or not grant the Representative Office License for the foreign company. In case of refusal, a reason must be clearly stated.

Step 4: Foreign companies based on the appointment date on the receipt come to receive the results of administrative procedures at the Receiving and Returning Department - Department of Industry and Trade or can register for the service of receiving results by post services.

#3- Validation

As officially stated in the Decree No.7/2016/ND-CP, once the Representative Office has been successfully established, its registration certificate is valid within five (05) years starting from the date of issue. However, it must not exceed the remaining term in case there is a time limit on the foreign business registration certificate or equivalent documents of the foreign investors.

If the foreign investors wish to change their established representative office to another designated location, or might have lost or destroyed their RO registration certificate, they are able to apply for a re-issuance. The re-issued certificate received the same validation as its previous version.

#4- Situations to adjust and re-issue the Representative Office License

Under the same Decree, foreign investors are required to follow adjustment procedure to adjust the information cited on the registration certificate if they make changes, including:

Changing the name or address of the head office abroad;
Changing the Head of the Representative Office;
Changing the name of the Representative Office;
Changing the activities of Representative Office;
Changing the address of the Representative Office within the city or the province they are based

In addition to adjusting the certificate, there are two circumstances that should be well acknowledged if foreign investors need the Authority to re-issue their RO registration certificate:

Relocating the Representative Office from a current city or province to another designated destination or another geographical area
The Representative Office registration certificate has been lost, damaged, or destroyed in any form

Post-licensing steps and required documents for a Representative Office in Vietnam

Besides the completion of all needful documents to the RO has the full rights to operate in Vietnam, the RO also has to submit reports of its activities of the previous year to the Department of Industry and Trade before January 30 of each year.

Required steps	Scope of works and requirements	Timelines and notes
# Step 1	Registering a seal for the Representative Office (RO) * License on the establishment of RO * Passport of RO’s Chief if foreigner or passport/ID card if Chief is Vietnamese	From 02 to 03 working days
# Step 2	Registering a Tax code for the Representative Office (RO) * Declaration to register a tax code * Power of attorney * Seal registration certificate * License on the establishment of RO in Vietnam	From 05 to 07 working days
# Step 3	Opening a bank account of the Representative Office (RO) * License on the establishment of RO * Seal registration certificate * Tax code registration certificate * A authorized letter appointing the authorized signatories of the bank accounts * Passport of RO’s authorized or legal representative * Account holder’s signature * Legal representative’s full name and signature * Passport/ ID card of RO’s Chief accountant and Chief accountant’s signature (if any)	From 02 to 03 working days From May 1st, 2021, the Representative Office and legal entities do not need to notify the bank account information to competent agencies or the tax authority.
# Step 4	Announcement of the establishment of the Representative Office (RO) Within 15 days from the date of issuance, re-issuance, modification, extension and revocation of the Representative Offices Establishment License, the RO is responsible for publishing on the establishment of RO	From 05 to 07 working day

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