Setting up a representative office is considered one of the simplest forms of investment in Vietnam.
The representative office will help the foreign trader to lease office, hire people, open bank account, and promote the business activities in Vietnam market. The chief representative if being foreigner will then could apply for work permit and temporary residence card to stay in Vietnam. There is no income tax as the representative office therefore the liability to maintain a representative office is less hassle. When the purpose of setting up representative office in Vietnam has been achieved, the closing down of the business shall be not as challenging as closing down a company.
According to Vietnam laws, representative office is a dependent unit, representing the foreign entity’s interests in Vietnam. Representative office is established by foreign entities to help them liaise, implement research activities, provide information and support them in seeking new partners as well as having understanding of the new market.
The foreign entity has to meet certain conditions before setting up representative office in Vietnam. It has rights and duties in accordance with Vietnam laws.
When preparing the application for license of representative office in Vietnam, the foreign entities have to note the following.
The application forms as issued by Ministry of Industry and Trade. The application must be signed by legal representative of the foreign entity;
The foreign entity has to prepare and provide business registration certificate, audited financial report, charter, and office lease memorandum of understanding, passport of the legal representatives of the Representative Office in Vietnam. The documents issued in foreign countries have to be notarized, legalized and authenticated (apostille procedures) in accordance with Vietnam laws to be used in Vietnam. If the business registration certificate or alternative documents have expiry date for business entity’s operation, the remaining time must be at least one year;
The Chief Representative of the Representative Office in Vietnam must be different from the Director of the foreign entity.
It would take around 20 business days since application until receiving the business operation registration of representative office.
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