CAN FOREIGN - INVESTED ENTERPRISES ESTABLISH REPRESENTATIVE OFFICES IN VIETNAM
QUESTION
Dear TLK Law Firm, we hope to have your company answer to the following question: In the near future, I and a Japanese unit will cooperate to establish a rice import-export joint stock company operating in Vietnam. So let me ask, can foreign-invested enterprises establish representative offices in Vietnam? Looking forward to your company's answer. Thank you!
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Thank you for your trust and sending questions to TLK Law Firm. Based on legal regulations and practical solutions, we would like to send you the following consulting content:
LEGAL BASIS
1. Document consolidating the Investment Law No. 03/VBHN-VPQH passed by the National Assembly on January 25, 2022;
2. Document consolidating the Enterprise Law No. 07/VBHN-VPQH passed by the National Assembly on January 25, 2022;
3. Document consolidating the Commercial Law No. 17/VBHN-VPQH passed by the National Assembly on July 5, 2019;
4. Decree No. 07/2016/ND-CP issued by the Government on January 25, 2016 detailing the Commercial Law on Representative Offices and Branches of foreign traders in Vietnam;
5. Other legal documents providing relevant guidance.
CONSULTATION CONTENT
Many foreign investors when contributing capital to establish businesses in Vietnam ask the question of whether their company can establish a representative office in Vietnam? If so, how should that procedure be performed? In this article, we will provide detailed information about: "Can foreign-invested enterprises establish representative offices in Vietnam?".
Photo 1. Can foreign-invested enterprises establish representative offices in Vietnam?_Hotline: 0972118764
I. SOME IMPORTANT LEGAL ISSUES RELATED TO WHETHER FOREIGN INVESTED ENTERPRISES CAN ESTABLISH A REPRESENTATIVE OFFICE IN VIETNAM
1. Can foreign-invested enterprises establish representative offices in Vietnam?
According to the Enterprise Law 2020, a representative office is a dependent unit of an enterprise, with the task of being authorized to represent the interests of the enterprise and protecting those interests. Representative offices do not perform business functions of the enterprise.
According to the Investment Law 2020, a foreign-invested enterprise is an enterprise that has foreign investors as members or shareholders. So enterprises with foreign investment can be Vietnamese traders or foreign traders.
(1) Vietnamese traders
According to the Enterprise Law 2020, businesses have the right to establish branches and representative offices domestically and abroad. Enterprises can place one or more branches and representative offices in a locality according to the administrative unit boundaries.
Therefore, Vietnamese traders have the right to establish one or more representative offices in the territory of Vietnam.
(2) Foreign traders
Decree 07/2016/ND-CP stipulates: foreign traders are allowed to establish their representative offices and branches in Vietnam according to Vietnam's commitments in international treaties to which Vietnam is a member. A foreign trader may not establish more than one Representative Office or Branch with the same name within a province or centrally run city.
Therefore, foreign traders also have the right to establish representative offices in Vietnam but can only establish one representative office and must meet stricter conditions than Vietnamese traders.
2. Conditions for establishing representative offices for foreign traders
According to Decree 07/2016/ND-CP, foreign traders are granted a License to establish a Representative Office when meeting the following conditions:
(1) Foreign traders are established and registered in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a member or the laws of countries and territories;
(2) Foreign traders have been operating for at least 01 year from the date of establishment or registration;
(3) In case the Business Registration Certificate or equivalent document of a foreign trader stipulates an operating term, that term must be at least 01 year from the date of submission of the application;
(4) The operational content of the Representative Office must be consistent with Vietnam's commitments in international treaties to which Vietnam is a member;
(5) In case the activities of the Representative Office are not consistent with Vietnam's commitments or the foreign trader does not belong to a country or territory participating in an international treaty to which Vietnam is a member, the establishment of a representative office must be approved by the Minister and Head of the ministerial-level agency managing specialized sectors (hereinafter referred to as the Minister of specialized management).
Above are the conditions foreign traders need to meet if they want to establish a representative office in Vietnam.
3. How long is the License to establish a Representative Office?
Pursuant to Decree 07/2016/ND-CP, License to establish Representative Office, License to establish Branch of foreign traders has a term of 05 years but does not exceed the remaining term of the Business Registration Certificate, business documents or documents of equivalent value of foreign traders in case those documents have a deadline.
Therefore, the term of the Representative Office Establishment License is 5 years.
Photo 2. Can foreign-invested enterprises establish representative offices in Vietnam?_Hotline: 0972118764
II. SUMMARY OF ANSWER SECTION: CAN FOREIGN INVESTED ENTERPRISES ESTABLISH A REPRESENTATIVE OFFICE IN VIETNAM?
Dear Customers, from the above synthesis and analysis, TLK Law Firm would like to give the following answer:
According to the Enterprise Law 2020 and the Commercial Law 2005, foreign-invested enterprises are completely allowed to establish representative offices in Vietnam, however, they need to meet a number of conditions regarding time and business lines. .. and some necessary documents and procedures.
=> See more: Can foreign companies register new industries?
III. HOW SHOULD YOU BEST CHOOSE AN ORGANIZATION THAT PROVIDES LEGAL SERVICES?
An organization providing quality and reputable legal services should have the following criteria:
First: Must be an official legal organization with a legal operating license;
Second: It is better if the Board of Directors must be lawyers, experienced and have high degrees;
Third: Have a team of lawyers and a systematic, professional, and thoroughly trained human resources system;
Fourth: Friendly, dedicated and make every effort for the benefit of customers. Consider customer satisfaction and work quality as your own honor;
Fifth: Professional, thoughtful, flexible and logical service provision process to optimize work performance and save customers' time;
Sixth: Reasonable and competitive service prices;
Seventh: Rich services in both fields of supply and service packages in the same field for customers to choose the appropriate service package, as well as comprehensive support for customers throughout the operation process. movement;
Eighth: Have the ability to Connect - Promote commercial relationships for customers if customers have needs,...
Finding a comprehensive, professional and reputable legal consulting organization is what every customer wants. Because no one wants to risk losing both money and time while the results are not as expected. However, finding such an organization is not easy because the number of service providers in the Vietnamese market today is very large with varying quality.
A suggestion for you: Although our TLK Law Firm does not dare to claim to be the company providing the best legal services on the market, we satisfy all of the above criteria and more. will definitely be a good choice for you.
=> See more: What documents are included in the application for additional industries for foreign-invested enterprises?
IV. SOME QUESTIONS RELATED TO WHETHER FOREIGN INVESTED ENTERPRISES CAN ESTABLISH A REPRESENTATIVE OFFICE IN VIETNAM AND REQUIREMENTS FOR CASES THAT ARE ISSUED TEMPORARY RESIDENCE CARD
Question 1: Does a representative office have legal status?
Reply:
Pursuant to the Enterprise Law 2020, regulations on representative offices of enterprises are specifically as follows:
A representative office is a dependent unit of an enterprise, with the task of representing, according to authorization, the interests of the enterprise and protecting those interests. Representative offices do not perform business functions of the enterprise.
Therefore, representative offices are dependent units of the business, meaning all activities of the branch or representative office depend on the business and through authorization. Therefore, branches and representative offices do not participate in legal relations in an independent capacity, so they are not considered to have legal status.
Question 2: If you want to change the head of a representative office of a foreign trader, do you need to apply for a license to establish a representative office or just need to carry out adjustment procedures?
Reply:
Pursuant to Decree 07/2016/ND-CP, foreign traders must carry out procedures to adjust the License to establish a Representative Office or the License to establish a Branch in the following cases:
(1) Change of name or head office address of a foreign trader;
(2) Changing the content of foreign traders' activities directly related to the content of operations of the Branch in Vietnam;
(3) Change of head of Representative Office or Branch;
(4) Change the name of Representative Office and Branch;
(5) Changing the operational content of Representative Offices and Branches;
(6) Change of headquarters address of a Representative Office in a province, centrally run city or in a geographical area under the management of a Management Board;
(7) Change the address of the Branch's headquarters.
In your case, you need to carry out procedures to adjust the License to establish a representative office and do not need to apply for a reissue of this License.
=> See more: Adding industries, increasing investment capital
Above is some general advice that we would like to offer to our customers. As a service provider, we always understand and are ready to accompany and solve the needs and difficulties that customers are facing. If you still have questions or need more in-depth advice, please contact the hotline: 0972118764 to receive direct advice from a lawyer (completely free consultation).
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