Procedures for representative office or branch establishment licenses

The State has always paid attention and created favorable conditions to promote domestic cooperation with foreign traders by many measures. Including legal provisions on administrative procedures so that foreign traders can have commercial activities in Vietnam. Many foreign traders are interested in procedures for representative office, branch establishment licenses. In fact, many people wonder, what is a branch? Or what is a representative office? And how can we get establishment licenses? Therefore, LSX Law firm will provide information about this article as follow.

Legal grounds

Enterprise Law 2020

Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices 

What is a branch?

In fact, a branch is a business unit directly under an enterprise. Its purpose is to expand the scale, market business enterprises. Branches have no legal status.

In terms of locations allowed to set up branches, an enterprise may set up one or more branches or representative offices in a locality according to the geographical boundaries of administrative units. It may establish branches in the country and abroad. 

What is a representative office?

In short, representative offices have two main types: Representative offices of domestic companies; and Representative Offices of Foreign Traders. 

Furthermore, a representative office is a dependent unit of the enterprise; it has to represent as authorized for the interests of the enterprise and protect those interests. Representative offices do not perform the business functions of enterprises. 

Representative offices and branches of foreign traders in Vietnam have the following rights; obligations under Vietnamese law. Foreign traders must take responsibility under Vietnamese law for all operations of the representative office, its branch in Vietnam.

Conditions for grant of representative office, branch establishment licenses

A foreign trader may be licensed to establish a representative office when meeting the following conditions:

Firstly, The foreign trader, established or registered its operation under the law of a country or territory; is a member of a treaty to which Vietnam is a contracting party or recognized by the law of such country or territory.

Secondly, The foreign trader has been operating for at least one year since its establishment or business registration. 

In addition, If the foreign trader’s business registration certificate or equivalent paper indicates its term of operation; the remaining term must be at least one year by the date of submission of the application.

Besides, the Contents of operation of the representative office must comply with Vietnam’s commitments in treaties to which Vietnam is a contracting party.

On the contrary; In case contents of operation of the representative office, branch fail to comply with Vietnam’s commitments or the foreign trader is not located in a country or territory is a member of a treaty to which Vietnam is a contracting party; the minister shall approve the establishment of such representative office of the ministry or the head of the ministerial-level agency performing the specialized management of the sector concerned (below referred to as the minister of the line ministry).

Dossiers of application for representative office, branch establishment licenses

Generally, a dossier shall be made in one set, comprising:

a/ An application for a representative office or a branch establishment license made according to a form set by the Ministry of Industry and Trade and signed by the foreign trader’s competent representative;

b/ A copy of the business registration certificate or equivalent paper of the foreign trader;

c/ The foreign trader’s document on appointment of ahead of the representative office or the branch;

d/ Copies of audited financial statements or documents proving the fulfillment of tax liabilities or financial obligations in the latest fiscal year or equivalent paper issued or certified by a competent agency or organization of the locality where the foreign trader was established, proving the actual existence and operation of the foreign trader in the latest fiscal year;

f/ A copy of the passport, people’ identity card or citizen’s identity card (for a Vietnamese), or a copy of the passport (for a foreigner) of the head of the representative office;

e/ Documents on the expected location of the representative office or the branch, comprising:

Firstly, a copy of the memo of understanding; or location rental agreement; or a document proving the right to use the location for opening the representative office or the branch;

In addition, a copy of the document; on the expected location of the representative office; or the branch under Article 28 of this Decree and relevant laws.

Order and procedures for grant of representative office, branch establishment licenses

A foreign trader may submit its dossier directly, by post, or online (if applicable) to the licensing agency where its representative office or branch will locate.

Within 3 working days after receiving the dossier, the licensing agency shall check and request the applicant to supplement its dossier if it is neither complete nor valid. The request for supplementation to the dossier shall be made only once during the handling of the dossier.

Usually, within 7 working days after receiving a complete and valid dossier; the licensing agency shall grant a representative office establishment license to the foreign trader or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason.

Finally, hope this article is helpful for you!

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