5 advantages of setting up a foreign representative office in Vietnam. Establishing a representative office is the optimal choice for many foreign-invested enterprises; before officially registering to develop a business in Vietnam. Let us learn about this topic with LSX Law firm below:
Here are 5 advantages of opening a representative office compared to setting up a business:
Time to explore the market to set up a foreign representative office in Vietnam
For foreign enterprises entering Vietnam for the first time with the primary purpose of promoting their brands; or get acquainted; market review; The establishment of a representative office is an option to help businesses save costs and simplify legal procedures.
Simple procedure to set up a foreign representative office in Vietnam
Compared with establishing a commercial presence in Vietnam in other forms such as business cooperation contracts; establishing a foreign-invested enterprise, or establishing a branch, establishing a representative office – the least complicated.
To establish a representative office, an enterprise needs to meet the following conditions:
Firstly, established and registered for business under the laws of a country; or territory participating in an international treaty to which Vietnam is a contracting party; or recognized by the laws of these countries and territories;
Secondly, having operated for at least 1 year; from the date of establishment or registration; the operation period must be valid for at least 1 year from applying for a license to establish a representative office.
Quick Licensing
In general, the time to get the License to establish a Representative Office is quite fast; within only about 7 working days from submitting a complete and valid dossier at the licensing agency; The office was able to be licensed to operate.
Cost saving to set up a foreign representative office in Vietnam
Another benefit of establishing a representative office is that it is not taxed. It is not a pure business operation but only has to declare and pay personal income tax for the office’s staff.
Establishing a foreign-invested enterprise in Vietnam needs to go through many stages with complicated procedures and papers; and the cost for this work is quite expensive (maybe up to several thousand USD). Therefore, spending a lot of money to establish a business while not understanding the market is a risky step for companies.
A stepping stone to establishing a foreign-owned enterprise
Accordingly, representative offices of foreign enterprises may not conduct business or other profitable activities; but this is still an agency performing communication, market research, promotion; and promotion of opportunities business investment… for foreign enterprises in Vietnam. Through these activities; The image and brand of enterprises will gradually become familiar and famous in the market. As a result, business leaders can safely establish foreign-owned enterprises and officially operate commercial activities in Vietnam.
Service of setting up a foreign representative office in Vietnam of LSX Law firm
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Finally, hope this article about 5 advantages of setting up a foreign representative office in Vietnam is helpful for you!
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Related questions
Accordingly, 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.”
As a dependent unit of the company, the Representative Office has no legal status.
Conclusion: So the above is 5 advantages of setting up a foreign representative office in Vietnam . Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
