Currently, the strong development and continuous integration of the Vietnamese economy is increasingly attracting business investment from foreign investors. Therefore, if foreign investors want to set up an office in Vietnam, it is very important and necessary to learn the provisions of Vietnamese law on business investment. So, LSX Law firm will help you know more about notes when setting up a representative office of foreign company in Viet Nam.
Legal grounds
Enterprise Law 2020
Representative office name
- Use characters: numbers and symbols, the letters of the Vietnamese table, the letters F, J, Z, W
- Must bear the name of the foreign trader and the phrase “Representative office”
- Must be written; or affixed at the headquarters of the Representative Office
- Documents and records, transaction papers and publications: printed or written with a smaller font size than the name of the foreign trader.
Representative office headquarters
- Firstly, representative offices can sign a contract to rent an office to carry out operations in Vietnam
- Secondly, representative office are not allowed to lend; or sublease their headquarters
- Finally, foreign investors may establish a representative office within a province or centrally run city.
Operating time
The maximum operating time of a representative office is 5 years; and can be extended.
Trade promotion activities
- Promotions are not allowed
- Not directly perform this activity, but can only sign a contract with a trader providing commercial advertising services to carry out this activity.
- It is not allowed to perform directly; but can only sign contracts with traders providing trade fair; and exhibition services.
- Only introduce goods, display and services to the traders they represent at the head office of the representative office. Except for this case; the representative office is only allowed to sign a contract; (when authorized by a foreign trader) with the trader providing goods and service display and introduction of goods and services to carry out this activity.
Office activities
- Profitable activities are not allowed but are limited to conducting surveys; market research and other non-profitable activities.
- Not to enter into a contract, supplement or amend a contract already signed by a foreign trader, unless the head of the representative office has a lawful power of attorney from the foreign trader;
- To enter into a contract in the following cases: to rent an office, to hire and to purchase necessary means and supplies for the operation of the representative office, to recruit labor (Vietnamese or foreign) to work for the representative office. representative office, open an account to serve the operation of the representative office.
- Must comply with relevant regulations such as Anti-Money Laundering Law, Tax Law, Commercial Law for activities in Vietnam.
- The foreign representative office must prepare and submit financial statements to the licensing agency.
- After every 3 to 5 years of operation, the tax authority will conduct an inspection to confirm the legitimacy and validity of each transaction
Social insurance and personal income tax
- It is necessary to comply with regulations on labor and social insurance when employing workers and paying monthly wages.
- Compulsory social insurance premium can be up to 34.5 % on the base salary.
- Get a work permit when foreigners work in Vietnam for more than 3 months
- Must comply with regulations related to Personal Income Tax: such as registering for a tax identification number for each individual, monthly personal income tax declaration, preparation and submission of year-end tax finalization reports.
- Personal income tax for non-residents is 20 % on legal income in Vietnam, residents are from 5% to 35% on global income
Hope this article “Notes when setting up a representative office of foreign company” is useful for you, if you need further information, please contact LSX law firm: 0833102102
Related questions
+ Firstly, being a trader authorized by the law of the country or territory (hereinafter referred to as the country) where such trader is established or register a legally recognized business.
+ Secondly, has operated for not less than 02 years since being established; or legally registered in the trader’s country.
+ Lastly, agencies competent to grant permits for establishment of foreign representative offices: Departments of Industry and Trade of provinces and cities shall issue; re-grant, amend, supplement, extend and revoke licenses for establishment of offices foreign representatives.
1. Copy of foreign company’s Business Registration Certificate (BRC) or other equivalent document; and notarized by competent authority of the nation thereof
2. Financial statement (Audited).
3. Copy of regulation (Charter) of foreign economic organization.
4. Office rental agreement for RO
5. Copy (Notarized; 3 months before the date of submission) of ID card or Passport of the head of RO.
Conclusion: So the above is Notes when setting up a representative office of foreign company. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
