PROCEDURES TO APPLY FOR A LICENSE OF ESTABLISHMENT OF REPRESENTATIVE OFFICES FOR FOREIGN TRADERS IN VIETNAM
TLK Law Firm is one of the prestigious firms and has extensive experience in carrying out the procedures to apply for a license to establish a representative office of foreign enterprises in Vietnam in a timely, efficient, and conscientious manner based on an unbeatable fee schedule
1. Commercial Law No. 36/2005/QH11 passed by the National Assembly on June 14, 2005;
2. 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;
3. Decree No. 08/2018/ND-CP issued by the Government on January 15, 2018, amending a number of Decrees related to business investment conditions under the state management of the Ministry of Industry and Trade. Love;
4. Circular No. 143/2016/TT-BTC issued by the Ministry of Finance on September 26, 2016 provides for fees for processing of applications for the license to establish representative offices of foreign trade promotion organizations or foreign traders in Vietnam, and the collection and transfer thereof
5. Other relevant guiding legal documents.
GUIDELINES FOR PROCEDURES
Do you want to apply for a license to establish a representative office of a foreign trader in Vietnam but are unsure how to do it? Or do you know what you need to do but feel overwhelmed when there are many problems related to the procedure for applying for a license? And do you need a reputable and professional legal provider to consult you? If so, TLK Law Firm will advise, guide and provide all services related to the procedure to apply for a license to establish a representative office of a foreign trader in Vietnam for Clients through the following writing:
Photo 1. Procedures for applying for a license to establish a representative office of a foreign trader in Vietnam_Hotline: (+84) 97 211 8764
I. PROCEDURES TO APPLY FOR A LICENSE FOREIGN TRADERS REPRESENTATIVE OFFICES IN VIETNAM
1. Steps to carry out procedures to apply for a license to establish a representative office of a foreign trader in Vietnam
- Step 1: Foreign traders fully prepare an application in compliance with current laws;
- Step 2: The foreign trader submits the application to the licensing agency;
- Step 3: The licensing agency handles the application, checks the completeness and validity of the application;
- Step 4: The foreign trader will be granted the License to establish a Representative Office in Vietnam based on the time of receiving the results on the Receipt.
2. Components of the application and procedures for applying for a license to establish a representative office of a foreign trader in Vietnam
A. Components of the application
1. An application for a representative office establishment license, made according to a form set by the Ministry of Industry and Trade and signed by the foreign trader’s competent representative;
2. A copy of the business registration certificate or equivalent paper of the foreign trader;
3. The foreign trader’s document on appointment of the head of the representative office;
4. 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;
5. A copy of the passport, people’s 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;
6. Documents on the expected location of the representative office, comprising:
7. Other relevant documents at the request of competent state agencies (if any).
B. Handling agency
- The provincial-level Industry and Trade Department of a locality in which a representative office is scheduled to be located outside industrial parks, export processing zones, economic zones, and hi-tech parks, may grant the establishment license in case the establishment of such representative office has not been regulated by any specialized legal document.
- The management board of an industrial park, export-processing zone, economic zone or hi-tech park (below referred to as management board) may grant the establishment license of a representative office located in the industrial park, export processing zone, economic zone or hi-tech park in case the establishment of representative office has not been regulated by any specialized legal document.
C. Method of settlement
Foreign traders submit dossiers directly or by post or online (if applicable) to the State agency where the representative office is expected to be located.
D. Implementation results
The trader receives the license to establish a representative office of a foreign trader in Vietnam.
=> See more: Procedures for requesting the establishment of a representative office of a foreign trader in an industrial park
II. SOME IMPORTANT ISSUES RELATED TO PROCEDURES FOR APPLICATION FOR LICENSE FOR ESTABLISHMENT OF REPRESENTATIVE OFFICES OF FOREIGN TRADERS IN VIETNAM
1. Definition of foreign traders, the representative office of foreign traders in Vietnam.
A foreign trader is a trader established and registered for business under foreign laws or recognized by foreign laws
Pursuant to the Commercial Law 2005, representative offices of foreign traders in Vietnam are dependent units of foreign traders, established under the provisions of Vietnamese law to understand the market and carry out some trade promotion activities permitted by Vietnamese law.
=> See more: Procedures for applying for an adjustment to the establishment license of a representative office or branch of a foreign trader in Vietnam
2. Conditions to be granted License to establish a representative office of foreign traders in Vietnam
Foreign traders are granted a license to establish a representative office when satisfying the following conditions:
First, the foreign trader is permitted to establish and register a business in accordance with the laws of the countries and territories that are party to international treaties to which Vietnam is a signatory or that are recognized by the laws of these countries and territories.
Second, the foreign trader has operated for at least 01 year from the date of establishment or registration;
Third, in case the business registration certificate or document of equivalent value of the foreign trader has a term of operation, such time limit must be at least 01 year from the date of application submission;
Fourth, the operation contents of the Representative Office must be consistent with Vietnam's commitments to international treaties to which Vietnam is a signatory;
Fifth, in case the operation contents of the representative office are inconsistent with the commitments of Vietnam or the foreign trader is not a member of 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, the Head of the ministerial-level agency in charge of specialized management (hereinafter referred to as the Minister of specialized management).
3. Regulations on the head of a representative office of a foreign trader in Vietnam
- The head of a representative office must be responsible to the foreign trader for his or her activities and that of the representative office in the country within scope authorized by foreign traders;
- The head of the representative office must take responsibility for his/her activities in case of performing activities outside the scope authorized by the foreign trader;
- Upon exiting Vietnam, the head of a representative office or branch shall authorize in writing another person to exercise his/her rights and perform his/her obligations. The authorization shall be approved by the foreign trader. The head of the representative office or branch shall remain responsible for the exercise of the authorized rights and the performance of the authorized obligations.
- In case the period of authorization under Clause 3 Article 33 of Decree No.07/2016/ND-CP expires but the head of the representative office or branch has not yet returned to Vietnam and no further authorization is made, the authorized person shall continue to exercise the rights and perform the obligations of the head within the scope of authorization until the head returns to work in the representative office or branch or until the foreign trader appoints another head for the representative office or branch.
- In case the head of the representative office or branch is absent from Vietnam for more than 30 days without authorizing any other person to exercise his/her rights and perform his/her obligations or is dead, missing, held in custody, detained, imprisoned, or lose his/her civil act capacity or has his/her civil act capacity restricted, the foreigner trader shall appoint another head for the representative office or branch.
- The head of a representative office may not concurrently hold the following posts:
+ Head of a branch of the same foreign trader;
+ Head of a branch of another foreign trader;
+ At-law representative of the same foreign trader or others;
+ At-law representative of an economic organization established under Vietnamese law.
- In case a foreign trader authorizes the head of its representative office to sign a contract or amend a signed contract, it shall establish the authorization in writing for each contract signing or amendment.
Photo 2: Procedures for applying for a license to establish a representative office of a foreign trader in Vietnam_Hotline: (+84) 97 211 8764
4. Validity periods of License for establishment of a representative office of a foreign trader in Vietnam
According to Decree 07/2016/ND-CP detailing the Commercial Law 2005 on Representative Offices, a license for the establishment of a representative office of a foreign trader in Vietnam has a validity period of up to five years, which must not exceed the remaining validity term of the business registration certificate or equivalent paper of the foreign trader in case such paper indicates a validity term.
5. Some benefits and limitations when a foreign trader establishes a representative office in Vietnam
5.1. Some benefits when a foreign trader establishes a representative office in Vietnam can be mentioned, as follows:
- First, there will be no capital requirements for the foreign trader: As mentioned, the purpose of establishing a foreign trader's representative office in another nation is to learn the market and conduct some commercial activities rather than engage in profitable business activities; therefore, capital requirements are not specified.
- Second, the establishment procedure is relatively simple: Compared with the establishment of a commercial presence in Vietnam in other forms such as business cooperation contracts, the establishment of the foreign-invested enterprise, or the establishment of a branch, the procedure for establishing a representative office is considered as is the least complicated;
- Third, the licensing operation is relatively fast and does not take too much time: The time to be granted a license to establish a Representative Office is quite fast. Within 07 working days from the date of submission of complete and valid dossiers at the licensing agency, the representative office can be licensed to operate;
- Fourth, save costs for foreign traders:
+ Establishing a foreign-invested enterprise in Vietnam involves many stages with lots of procedures and papers. This work can cost several thousand dollars. Spending a lot of money to set up a foreign-owned enterprise without truly understanding the market is, on the other hand, a risky move.
+ Another advantage of establishing a representative office is tax-free because of not a pure business operation but only has to declare and pay personal income tax for the office's staff.
- Fifth, foreign traders will easily gain access to the market: Establishing a representative office is the option chosen by many foreign traders who initially enter the Vietnamese market with the primary purpose of promoting brands, familiarizing themselves with the market, and doing some market research while preparing for official business.
5.2. Limitations to foreign traders establishing a representative office in Vietnam is that the representative office will not be allowed to engage in the following activities:
- Engaging in profit-generating and income-generating activities. These activities include buying and selling transactions and direct transaction activities - from inception to completion of a project. If traders lack sufficient information to make investment decisions, a representative office in Vietnam will be a good fit because the expenses of setting up a representative office are substantially lower than the costs of setting up a subsidiary. On the contrary, establishing a joint-stock company or limited liability company will be the optimal choice for investors who intend to manufacture products in Vietnam or conduct sales activities. Establishing a company in Vietnam will help investors have more flexibility in business activities;
- Receiving orders from any individual or company;
- Coordinating the purchase and sale on behalf of the parent company;
- Negotiating, signing and concluding contracts, submitting bids and settling complaints;
- Invoicing. All invoices issued must belong to the overseas parent company;
- Buying, ordering or paying for goods on behalf of the parent company;
- Providing after-sales services related to a service or product provided by the parent company;
- Performing activities as an agent between the client and the client's parent company.
As such, if a representative office engages in other activities that are not permitted in Vietnam, such as buying and selling products or services on behalf of the parent company, it will be considered illegal. If this happens, foreign companies could be fined, just as Vietnam would tax all income received in the country.
III. HOW SHOULD YOU CHOOSE THE BEST LEGAL SERVICE PROVIDER?
An organization of high-quality and renowned legal services should meet the following criteria:
First, they must be an official legal organization with a legal operating license;
Second, their Board of Directors must be lawyers, experienced and it will be better if they have a high degree.
Third, they have a team of lawyers, a professional and well-trained human resource system;
Fourth, they are friendly and dedicated. They make every effort for the benefit of customers and consider customer satisfaction and work quality as one's honor;
Fifth, professional, thoughtful, flexible, and logical service delivery process to optimize work performance and maximize customer time savings;
Sixth, reasonable and competitive service prices;
Seventh, wide range of services in both the field of providing service packages in the same field for customers to choose the appropriate service package, as well as being able to provide comprehensive support to customers throughout the operation process. motion;
Eighth, they have capable of connecting – promoting commercial relationships for customers who have specific requirements.
=> Any client wants to choose a professional and reputable legal service provider because no one wants to take the chance of losing money or time, coupled with the results that aren't what they were expecting. Finding such an organization, however, is difficult due to an available large number of service providers of varying quality.
TLK Law Firm does not claim to be the best legal service provider on the market, but we meet all of the above criteria and more. Therefore, TLK Law Firm will unquestionably provide a good service for you.
IV. SOME QUESTIONS RELATED TO THE LICENSE OF ESTABLISHMENT OF REPRESENTATIVE OFFICES OF FOREIGN TRADERS IN VIETNAM
Question 1: I am a foreign trader. I have a query concerning the following: after completing the application for the establishment license representative office, I want to recruit Vietnamese workers to work at the office whether or not this is allowed by law?
Pursuant to Article 17 of the Commercial Law 2005, the rights of representative offices include
- To operate for the purposes, within the scope and duration stipulated in their establishment licenses.
- To rent offices, rent and purchase equipment and facilities necessary for their operations.
- To recruit Vietnamese and expatriate employees to work for them according to the provisions of Vietnamese law.
- To open accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to operate in Vietnam, and to be allowed to use those accounts solely for their operations.
- To have seals bearing their names according to the provisions of Vietnamese law.
- To have other rights as defined by law.
Thus, representative offices of foreign traders in Vietnam are permitted by law to employ Vietnamese workers legitimately.
=> See more: What documents are included in the application for a change in the address of a representative office for a foreign trader?
The above information is broad consulting content that we would like to provide to customers. As a service provider, we are always aware of and ready to assist customers with their needs and problems. If you have any further questions or require more detailed guidance, please contact the hotline: +(84) 97 211 8764 to speak with a lawyer (free consultation).
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Business and Investment Department – TLK Law Firm
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03 working days from the date the competent authority receives the valid application.
1. Support for customers in connection - promotion trading during operation.
2. Discount % service fee when customers use the service for the second time.
3. Free legal advice on business law for one year (if you are an organization or a business).
4. Free legal care and advice on tax law - accounting for businesses within one year (if you are an organization or a business).
5. Provide the internal management system of the enterprise (if the customer is an organization or an enterprise).
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