General regulations on representative offices in Vietnam. What is a representative office? General regulations on procedures for setting up a representative office in Vietnam. Let us learn about this topic with LSX Law firm below:
Legal grounds
Enterprise Law 2020
What is a representative office?
According to Clause 2, Article 44 of the Enterprise Law 2020, a Representative Office is: “a dependent unit of an enterprise, responsible for representing the enterprise’s interests and protecting those interests.”
Commercial representative offices are often opened where traders have not directly carried out commercial transactions; to approach and understand the market when it is not possible to directly carry out commercial transactions and seek out possibilities of exploiting the demand for product consumption.
In principle, representative offices of economic organizations are generally not allowed to conduct production and business activities to make profits; but only have the function of promoting, seeking, promoting, and supporting the production and business activities of the economic organization that they represent. The operation of a representative office is essentially on behalf of a financial organization and the basis of its authorization. This feature helps to distinguish representative offices and branches of legal entities. Only the branch of the legal person is allowed to conduct production and business activities under the activities of the legal person and based on the operating license of the branch.
In addition, the term representative office is also used to refer to dependent units of non-profit organizations such as representative offices of non-governmental organizations, international organizations or diplomatic organizations located in Vietnam. Where such organizations do not have their headquarters, these representative offices act on behalf of the above organizations.
General regulations on functions of representative offices in Vietnam
In general, a representative office is set up with the function of an intermediary office responsible for communicating and dealing with partners; carry out research activities, provide information, support enterprises to access new markets and partners; can conduct the market review, detect infringements that adversely affect the company’s business, unfair competition behavior of rival enterprises, represent the company to use for these violations.
A representative office is a legal unit directly under the enterprise and only functions on behalf of the enterprise in terms of administration, with the following 10 main functions:
Firstly, to carry out the development of business lines that competent authorities have licensed in the area of operation under current laws.
Secondly, make reports to local authorities under state regulations.
Thirdly, make periodical financial statements to the head office under the enterprise’s regulations.
Fourthly, report annual business results, growth results, and development strategies of the establishment.
Moreover, organize the economic accounting work according to the principle of an independent accounting.
Besides, building and perfecting the management apparatus according to the scale orientation of the Board of Directors.
In addition, coordinate with the head office of the enterprise and other facilities and branches in exploiting customers as well as dispatching employees.
Furthermore, manage business activities in the area of operation.
Also, drafting legal documents to serve all activities of the office based on the legal documents of the business.
Finally, take care of the material and spiritual life of employees at the facility.
General regulations on procedures for setting up a representative office in Vietnam
Procedures for applying to establish a representative office include the following documents:
- Notice of establishment of a representative office (signed by the legal representative of the enterprise)
- Written decision on the establishment of a representative office of the Board of Directors (signed by the Chairman of the Board of Directors)
- A copy of the meeting minutes on the establishment of a representative office of the Board of Directors
- A valid copy of the decision to appoint the head of the representative office
- A valid copy of one of the valid personal identification papers of the head of the representative office;
- For Individuals with Vietnamese nationality: Identity card or passport;
- For Individuals with foreign nationality: Temporary residence registration certificate issued by competent Vietnamese authorities, Work Permit and Passport;
- Table of contents of records (in the above order);
- Profile cover (of thin paperboard or rugged nylon with no text for other purposes);
- Declaration of information of the applicant
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Related questions
According to Clause 1, Article 45 of the Enterprise Law 2020:
Enterprises have the right to set up branches and representative offices in the country and abroad. An enterprise can set up one or more branches and representative offices in a locality according to administrative boundaries.
So there is no limit to the establishment of a representative office.
As a dependent unit of the company, the Representative Office has no legal status.
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