To expand the business scale, many companies intend to open subsidiary units such as a representative office. The law has facilitated the economy, so businesses can carry out simple and easy procedures to set up a representative. However, for foreigners, they may not have a clear understanding of the fees and regulations regarding subsidiaries of business. So, in this article, LSX legal firm will answer: “the fee to open a representative office in Vietnam”
- Law on Enterprise 2020
- Circular 47/2019/TT-BTC
Representative office of business
A representative office, according to Article 44 of the Law on Enterprise 2020, a dependent unit of an enterprise that acts as the enterprise’s authorized representative, represents and protects the enterprise’s interests. A representative office shall not do business.
- Representative office of a company with a commercial presence in Vietnam.
- Representative office of foreign traders in Vietnam (enterprises do not have a commercial presence in Vietnam).
Functions of a representative office
Representative offices have the following functions:
- Perform the function of a liaison office;
- Conduct research activities, provide information, and support businesses to access new markets and partners
In addition, representative offices must not conduct any other profitable business activities. Representative offices do not have the right to sign separate contracts on their own behalf. The enterprise bears all financial obligations arising from the operation of the representative office, so the accounting of the representative office depends on the enterprise.
So, if the enterprise wants to establish more dependent units with only the function of assisting the enterprise to reach out to customers and partners without performing the business function, the enterprise may consider choosing to establish a representative office to avoid having to perform complicated tax declaration obligations.
Besides, for service industries that are not performed directly at the address of the unit such as tourism, construction, consulting, etc, the form of establishing representative offices in other provinces is a reasonable choice.
Organizational structure of representative office
As shown above, the function of a representative office is relatively simple. Therefore, the organizational structure of the representative office is also simple, the title of the chief is Head of the representative office.
Representative offices can sign contracts on behalf of the company to serve the activities of the office such as renting a house, purchasing equipment, and combining labor contracts with employees working at the office…. The parent company will decide the organizational structure of the office. The office operates under the permission of the parent company.
Does the representative office have a seal?
The representative office does not need to engrave the seal of the office, the company will decide whether or not to engrave a seal for the office. However, in Vietnam normally the signature must go with the new seal to increase the validity and make customers more confident.
When engraving the seal, the office should note that the company will decide the number and form of the representative office’s seal. Before using the seal, the office needs to carry out the procedure to publish the seal sample on the national portal to make it legal.
Dossier for establishment of a representative office
When establishing a domestic representative office, the enterprises shall submit an application for representative office registration to the business registration authority in charge of the area where they want to establish a representative office. Such an application shall consist of:
- The notice of the establishment of the branch/representative office;
- Copies of the Establishment Decision and minutes of the meeting on the establishment of the enterprise’s representative office.
- A valid copy of one of the personal identification papers of the head of the representative office.
Procedure for registration of a representative office
First of all, enterprises wishing to establish a representative shall prepare the dossiers mentioned above for the application and then submit them to the business registration office of the province/city.
Within 03 working days from the receipt of the application, the business registration authority shall consider the validity of the application and decide whether to issue a Certificate of Branch/Representative Office Registration. The business registration authority shall inform the applicant of necessary supplementation in writing if the application is not satisfactory or inform the applicant and provide an explanation if the application is rejected.
The enterprise shall apply for revision of the Certificate of Branch/Representative Office Registration 10 days from the day on which a change occurs.
Within 10 days from the day on which the business location is decided, the enterprise shall send a notice of business location establishment to the business registration authority.
The fee to open a representative office
Representative office establishment fees include all fees and charges that a company must pay during the entire process of establishing a representative office.
Circular 47/2019/TT – BTC specifically stipulates the fee for setting up a representative office:
- Providing information about the Business registration certificate and the certificate of registration for branches, representative offices, and business location of the enterprise: 20.000 VND per certificate.
- Charges for business registration (consist of issuance, re-issuance, amendments to the Business registration certificate, and the certificate of registration for branches, representative offices, and business location of the enterprise): 50.000 VND per registration.
Fees for setting up a representative office of the company specified above called the state fee. In addition, the company needs to spend other expenses such as stamp engraving fees, and service fees.
Seal engraving fee paid to the seal engraving service provider. The seal engraving fee will depend on the number of seal samples, seal size, seal type as well as seal engraving service provider.
Service fee paid to the service provider to establish a representative office for the company. The service fee will depend on and specified by that unit; may or may not include state fees and seal engraving fees.
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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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.
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.
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, other obligations as defined by Vietnamese law.
Finally, hope this article is useful for you to answer the question about “The fee to open a representative office in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: email@example.com