How to set up a representative office abroad for Vietnamese enterprise?
In recent years, Vietnamese companies and enterprises have gradually grown, increasingly asserting their spreading power in the world. Setting up a representative office abroad will help international citizens easily access the products as well as services of the business. In case you do not know have an insight into this problem, follow this article from LSX legal firm. We will answer the question: “How to set up a representative office abroad for Vietnamese enterprise?”
Legal grounds
- Commercial Law 2005
- Law on Enterprise 2020
Representative office of enterprise
Firstly, according to Clause 2, Article 44 of the Law on Enterprise 2020:
Article 44. Branches, representative offices and business locations of an enterprise
2. A representative office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, represents and protect the enterprise’s interests. A representative office shall not do business.
Accordingly, representative offices cannot conduct business, produce and supply the company’s goods and services to the market. It can only perform the function as an authorization of the business.
That means that a representative office can only be a place to market products and services. In other words, a representative office means a place where businesses use to display samples, promote products and services, answer and advise customers, and meet the company’s partners…
Therefore, the biggest advantage of a representative office is that there are no procedures related to tax reporting and no license tax to be paid. In addition, enterprises can establish representative offices in the same province or city, in the country, or abroad, and may set up one or more representative offices in a locality according to administrative boundaries. Besides, representative offices have the right to register their own seals to facilitate the operation process.
What rights does a representative office have?
Rights of representative office:
- Firstly, operate for the purposes, within the scope and duration stipulated in their establishment licenses.
- Secondly, rent offices, rent and purchase equipment and facilities necessary for their operations.
- Thirdly, recruit Vietnamese and expatriate employees to work for them according to the provisions of Vietnamese law.
- Fourthly, open accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to operate in Vietnam and be allowed to use those accounts solely for their operations.
- Fifthly, have seals bearing their names according to the provisions of Vietnamese law.
- Also, other rights as defined by law.
What obligations does a representative office have?
In addition to enjoying the rights prescribed by Law, the representative office of each enterprise in Vietnam must fulfill its obligations under the law:
Obligations of representative offices:
- Firstly, not to directly conduct profit-generating activities in Vietnam.
- Secondly, conduct commercial promotion activities within the scope permitted by the Commercial Law 2005.
- Thirdly, not to enter into contracts, not to amend or supplement contracts already entered into by foreign traders, except where chief representatives obtain valid letters of authorization from foreign traders or other cases specified in Clauses 2, 3, and 4, Article 17 of the Commercial Law 2005.
- Fourthly, pay taxes, fees, and charges, and fulfill other financial obligations provided for by Vietnamese law.
- Fifthly, report on their operations according to Vietnamese law.
- Also, have other obligations as defined by Vietnamese law.
Functions of a representative office
Representative offices have the following functions:
- A representative office has the role of representing businesses in introducing products as well as services to customers and has no business function, not allowed to sign contracts, or collect money from customers.
- A representative office is a liaison office that conducts research, provides information, and supports businesses to access new markets and partners.
- Representative offices have the function of market exploration or brand promotion to provinces outside the province where they intend to establish other representative offices.
- Also, representative offices can represent as authorized by the company without a business function.
Open a representative office abroad
Opening a representative office in a foreign country means a Vietnamese enterprise establishes and opens a dependent unit in a foreign country in accordance with the legislation of the host country where the enterprise opens a representative office.
Accordingly, the representative offices of Vietnamese enterprises opened in foreign countries will perform the function of representing Vietnamese enterprises abroad, conducting work related to market surveys, and performing other activities. trade promotion activities within the framework of the law of the country where the enterprise establishes a representative office.
Procedures to set up a representative office abroad
Step 1: Prepare dossiers
- Notice on setting up a representative office abroad (Appendix II-8, Circular 01/2021/TT-BKHDT).
- A valid copy of the representative office operation registration certificate or equivalent document.
Step 2: Submit your application
The enterprise must send a notice of the official establishment of a representative office abroad within 30 working days to the Business Registration Office where the enterprise has registered to supplement information about the representative office of the enterprise in the National Database of Business Registration.
The legal representative sends the Notice of registration of representative office operations directly to the Business Registration Office or via the electronic network according to the process on the National Business Registration Portal.
Step 3: Get the result
3 working days after receiving the notice of opening a representative office abroad, the Business Registration Office will update information about the representative office of the enterprise in the National Database on Business Registration.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations in business suspension;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
Setting up a representative office of the company (the fee for issuing a new certificate of operation registration of the representative office of the company): 50,000 VND.
Re-issuance of representative office operation registration certificates: 50,000 VND /each time.
Change of representative office operation registration certificate: 50,000 VND /each time.
Providing information Certificate of operation registration of representative office to the company: 20,000 VND /each certificate.
Notice of establishment of the representative office;
A written decision of the company owner on the establishment of a representative office;
Minutes of the Board of Members meeting on the establishment of a representative office;
Decision on appointment of the head of the representative office of the company owner;
A valid copy of one of the personal identification papers of the head of the representative office (ID card//passport).
Firstly, notice of establishment of the representative office;
Secondly, a written decision of the company owner on the establishment of a representative office;
Then, the decision on appointment of the head of the representative office of the company owner;
Lastly, a valid copy of one of the personal identification papers of the head of the representative office (ID card//passport).
Contact LSX
Finally, hope this article is useful for you to answer the question about “How to set up a representative office abroad for Vietnamese enterprise?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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