Today, LSX Lawfirm will give you an article about: “Foreign traders set up branches in Vietnam”, as follows:
Legal grounds
Commercial Law 2005
Right of foreign traders to set up representative offices and branches in Vietnam
Foreign traders in general have the right to set up representative offices and branches in Vietnam according to Clause 2, Article 16 of the Commercial Law 2005. However, it should be noted that in specific cases, foreign traders are traders of which country ? From there, considering the relevant international treaties and bilateral agreements; it is possible to conclude the possibility of setting up a representative office or branch of that foreign trader in Vietnam.
The legal regulations have also provided a definition of representative offices and branches of foreign traders in Vietnam; according to which:
- Firstly Representative offices of foreign traders in Vietnam are dependent units of foreign traders; established in accordance with Vietnamese law to study the market and carry out a number of trade promotion activities. as permitted by Vietnamese law.
- Secondly a branch of a foreign trader in Vietnam is a dependent unit of the foreign trader; then established and conducting commercial activities in Vietnam; in accordance with the provisions of Vietnamese law or an international treaty to which the Socialist Republic of Vietnam is a member. The Socialist Republic of Vietnam is a member.
Representative offices and branches of foreign traders in Vietnam have the rights and obligations as prescribed by Vietnamese law. Foreign traders must be responsible before Vietnamese law for all activities of their representative offices and branches in Vietnam.
Legal status of branches of foreign traders in Vietnam
Rights of the Branch
– Rent the office, rent, buy the necessary means and supplies for the branch’s operation.
– Recruit Vietnamese and foreign workers to work at the branch in accordance with Vietnamese law.
– Enter into contracts in Vietnam in accordance with the operation contents specified in the branch establishment license and in accordance with the Commercial Law
– Open an account in Vietnam dong or in foreign currency at a bank licensed to operate in Vietnam.
– Remittance of profits abroad in accordance with Vietnamese law.
– Having a seal bearing the branch’s name in accordance with Vietnamese law.
– Carrying out activities of buying and selling goods and other commercial activities in accordance with the establishment license in accordance with the provisions of Vietnamese law and international treaties to which the Socialist Republic of Vietnam is a signatory.
– Other rights as provided for by law.
Obligations of the Branch
- Implement the accounting regime in accordance with Vietnamese law; In case it is necessary to apply another commonly used accounting system, it must be approved by the Ministry of Finance of the Socialist Republic of Vietnam.
- Report on the operation of the branch in accordance with the law of Vietnam.
- Other obligations as prescribed by law.
- Implement the accounting regime in accordance with Vietnamese law; In case it is necessary to apply another commonly used accounting system, it must be approved by the Ministry of Finance of the Socialist Republic of Vietnam.
- Report on the operation of the branch in accordance with the law of Vietnam.
- Other obligations as prescribed by law.
Naming principles for Vietnam’s branches, representative offices
Firstly, the name of a branch, representative office or business location shall consist of letters in the Vietnamese alphabet; the letters F, J, Z, W, numbers and symbols.
Secondly, the name of a branch; representative office or business location shall consist the enterprise’s name and the phrase “Chi nhánh”; “Văn phòng đại diện” or “Địa điểm kinh doanh” respectively.
Thirdly, the name of a branch, representative office or business location displayed at the branch; representative office or business location. The name of an enterprise’s branch or representative office be smaller than the Vietnamese name of the enterprise on the transaction documents; records and printed materials issued by the branch or representative office.
In addition
- Apart from the Vietnamese name, the enterprise’s branch; representative office or business location may register a name in foreign language and an abbreviated name. The foreign language name that the name translated from the Vietnamese name into one of the Latin-based languages.
- The abbreviated name may be abbreviation of either Vietnamese name or foreign language name.
- The phrase “công ty” or “doanh nghiệp” must not use as part of the proper name of the enterprise’s branch, representative office or business location.
- When a wholly state-owned enterprise converted into a financially dependent unit after restructuring; its existing name before restructuring may be retained.
Registration of enterprise’s name in Vietnam
The enterprise or its founder shall not use a name already used by another enterprise or easily confused with another enterprise’s name already registered on the National Enterprise Registration Database; except for the names of enterprises dissolved or declared bankrupt by the Court.
Business Registration Offices entitled to accept or reject the names selected by enterprises as prescribed by law. In order to avoid the use of used or confusing names or commission of violations against regulations on naming of enterprises; the Business Registration Office’s decision will be final. If disagreeing with the decision given by the Business Registration Office; the enterprise may file a lawsuit in accordance with regulations of the Law on administrative procedures.
Enterprises that are operating under their investment licenses or investment certificates (also business registration certificates) ; or another document of equivalent validity issued before July 01, 2015 and whose name are the same as or confused with other enterprises’ names registered on the National Enterprise Registration Database may continue using their registered name and it does not require to change such names.
Enterprises whose names coincide or are confused with each other are recommended to negotiate about changing their names.
You can also refer to the actions against enterprises’ names infringing upon industrial property rights or information about enterprise registration and State management of enterprise registration and register of enterprise’s name in Vietnam.
Related questions
Representative offices do not have business functions and activities of production and services, so they do not have to issue and use invoices.
Representative offices are only allowed to conduct market research, brand advertising, display and introduction of their goods. Any business activities that bring profits to a representative office violates the regulations for a representative office and may result in loss of its operating license.
The law specifically stipulates that a foreign trader may not establish more than one representative office or branch with the same name within a province or centrally run city. And there is no mandatory regulation on the number of representative offices of foreign enterprises. Therefore, your business can comfortably set up its office in many locations and regions across the country.
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