A representative office is not an independent legal entity and hence, may not conduct direct commercial or revenue-generating activities with the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services.
ROs are generally used as a first step for foreign enterprises looking to enter Vietnam. While not permitted to engage directly in revenue-generating activities, ROs are used to provide a wide range of ancillary support to their head offices overseas.
There are four steps that need to fulfilled to set up a representative office and operate legally:
1) Obtain the main license.
2) Submit the chief representative’s income tax and labour declaration.
3) Obtain the operation license.
4) Obtain the representative office stamp
Approval for the establishment of a Vietnamese RO is only granted if the parent company has a certified business registration certificate in its country of incorporation and has been in operation for a minimum of one year since the effective date of incorporation.
An application dossier for a Vietnam representative office license must be submitted to the Provincial Department of Industry and Trade. An RO license, valid for a maximum of five years with an option for renewal, shall be issued within 15 working days of receipt of valid application documents, excluding any time spent amending or supplementing the application.
In general, ROs are allowed to:
Act as a liaison office to oversee the business environment;
Search for trade and/or investment opportunities and partners;
Supervise and assist with the execution of contracts entered into between its head office and Vietnamese partners;
Act on behalf of its head office to supervise and direct the implementation of projects in Vietnam.
GBS – one of the best business law firms in Vietnam with a network South East Asia, Middle East, Japan, HongKong, Malta and Poland – offers simple direct advice to start your operations in Vietnam. They provide the help you need to understand your options, obtain your business license and complete the registration of your Representative Office in Vietnam.
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