What are the procedures to establish a company branch in Vietnam?
The market is like a battlefield. If you want to survive, you must constantly rise and develop. If a business wants to expand its reach, it is only a matter of time before establishing dependent units. In other words, company branches, chosen by many businesses. However, businesses have to carry out certain procedures to establish a company branch. So, in this article, LSX legal firm would like to answer the question: “What are the procedures to establish a company branch in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Company branch
A branch means a dependent unit of the enterprise that takes responsibility for performing all or part of the functions of the enterprise including the function of an authorized representative. Accordingly, the branch’s line of business must be consistent with the business line of the enterprise.
An enterprise can open a branch in the locality where the enterprise located or in other provinces as well as cities. An enterprise can set up one or more branches in a locality according to administrative boundaries.
As usual, to expand business activities, people will set up branches or representative offices. However, representative offices cannot conduct production and business activities to generate profits. In contrast, the branch can conduct production and business activities to make profits like the company at the head office.
Therefore, many businesses prefer to set up a company branch to expand their production and business activities. So, understanding the procedures for opening a company branch is significant for everyone who intends to invest in businesses.
Name of the branch
When opening a branch of the company, the enterprise must pay attention to naming the branch to ensure the following conditions:
- The branch name must be written in letters of the Vietnamese alphabet including letters F, J, Z, W, numbers, and symbols.
- The name of the branch must bear the name of the enterprise together with the phrase “Branch”.
- The branch name must be written or attached at the branch office and business location. Also, the name of the branch must printed or written in a smaller font than the Vietnamese name of the enterprise on transaction papers, documents, and publications issued by the branch.
Dossiers to carry out the procedures to establish a company branch
Depending on the type of business, the profile for establishing a branch will differ. The dossier to establish a company branch includes 2 types:
- Dossier to establish a branch with a single-member limited liability company (Single-member LLC).
- Dossier to establish a branch of a joint-stock company as well as a limited liability company with 2 or more members (Multi-member LLC).
In details:
Dossier to establish a branch with a single-member limited liability company (Single-member LLC):
- Notice of branch operation registration.
- The decision to establish a branch of the company owner.
- The decision to appoint the head of the branch.
- 01 notarized copy of ID card/Passport of the head of the branch.
- Authorization letter of the person submitting the application (Only prepare in case the legal representative of the company does not submit by him/herself).
Dossier to establish a branch of a joint-stock company as well as a limited liability company with 2 or more members (Multi-member LLC):
- Notice of branch operation registration.
- The decision to establish a branch of the Board of Members/Board of Directors.
- Minutes of meeting of the Board of Members/Board of Directors on registration of the branch.
- The decision to appoint the head of the branch.
- 01 notarized copy of ID card/Passport of the head of the branch.
- Authorization letter of the person submitting the application (Only prepare in case the legal representative of the company does not submit by him/herself).
Procedures to establish a company branch
Enterprises can choose to carry out the procedures for setting up a branch directly at the Business Registration Office or online through the website of the National Business Registration Portal. The procedure for setting up a branch will go through the following stages:
Firstly:
- Prepare the dossiers to establish a branch.
- The legal representative of the enterprise or an authorized person will come and submit the application at the business registration office of the province or city where the company wants to open the branch.
Secondly:
- The Business Registration Office receives and checks the validity of the application.
- Within 03 working days, the Business Registration Office gives the results of the procedure: Notice of amendment, supplement if the dossiers not valid, then the company corrects the application and starts over from phase 1. After all, the company receives a Certificate of branch registration or often called a license to establish a branch.
Lastly:
- The legal representative of the enterprise or an authorized person comes to get the establishment certificate at the Business Registration Office or receive it by post (if registered in advance).
- Fee: 100,000 each time to carry out the procedures for setting up a branch
Accounting forms
There are two accounting methods for branches: Dependent accounting and independent accounting.
Dependent accounting form:
- Seal: If necessary.
- Invoice: May or may not necessary. When needed, you can issue invoices from the parent company.
- License tax: Declare and submit where the branch locates.
- VAT declaration: Declare and submit where the branch locates.
- Year-end financial statements: Declare and submit where the parent company locates.
- Digital signature: Must have.
- Bank account: Must have.
Independent accounting form:
- Seal: Must have.
- Invoice: Must have.
- License tax: Declare and submit where the branch locates.
- VAT declaration: Declare and submit where the branch locates.
- Year-end financial statements: Declare and submit where the branch locates.
- Digital signature: Must have.
- Bank account: Must have.
Related articles
- Foreign traders set up branches in Vietnam
- Should companies establish representative office or branch in Vietnam?
- The latest procedures to establish a branch of an LLC in Vietnam
Related questions
After you prepare all the documents and submit them to the Business Registration Office; Within 03-05 working days, the Business Registration Office will process and return the results of registration of the establishment of a company branch for you.
If the branch is established in the same province as the parent company, the parent company will be responsible for the quarterly and annual tax reports. The branch will also use the parent company’s digital signature to pay license tax.
In case the branch and parent company are in different provinces, the branch must have its own seal and digital signature to make quarterly tax reports and pay license tax. Additionally, the year-end financial statements will be settled by the parent company.
In this case, if the branch established in the same province as the parent company or not, it cannot use the same digital signature but must purchase a separate digital signature and make an initial tax return like the profile of the parent company. In addition, the branch also has to make quarterly reports and tax finalization at the end of the year.
Meanwhile, the representative office has no choice but to choose the dependent accounting method. Because they do not have their own seal, so they cannot make tax declarations and payments on their own. All declarations of license fees, license taxes, and license tax declarations of the representative office performed by the parent company.
Contact LSX
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