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ESTABLISHING A REPRESENTATIVE OFFICE OF A SOUTH KOREAN INVESTED COMPANY IN VIETNAM
A representative office of a South Korean invested company in Vietnam is a dependent unit of a South Korean enterprise, established under Vietnamese law for the purpose of promoting trade. Its role is to act on behalf of the company’s interests and protect those interests.
The representative office does not have legal status and is a dependent unit of the South Korean company, meaning it cannot independently conduct business activities in Vietnam. The representative office in Vietnam only performs functions and duties authorized to protect the interests of the South Korean invested enterprise.
Conditions for establishing a representative office of a South Korean invested company in Vietnam
- A representative office can only be established after the South Korean invested company has been set up. Therefore, it is not possible to simultaneously carry out the procedures for establishing both the company and the representative office.
- Name of the representative office: The name of the representative office must include the company name followed by the phrase “Representative Office.”
- The South Korean representative office in Vietnam is not allowed to conduct business activities in Vietnam; it can only perform transactional functions. As a result, the representative office cannot issue and print VAT invoices. Additionally, the head of the representative office can only sign contracts and use the representative office’s seal for specific transactions that serve the office’s activities, such as office lease agreements and personnel hiring contracts.
- Unlike a business location, the head of the South Korean representative office in Vietnam cannot sign contracts related to business operations at the representative office.
- Similar to the company headquarters, the address of the representative office of a South Korean invested company in Vietnam cannot be located in a collective building or apartment complex.
- Although the South Korean representative office in Vietnam does not have tax obligations, if the company wishes to change the representative office’s address to a different district or county, it must still confirm tax obligations with the old tax authority. Therefore, companies should carefully choose a suitable address when establishing the representative office to avoid complications related to address changes.
Documents required to establish a representative office of a South Korean invested company in Vietnam
- A notice of establishment of the representative office signed by the legal representative of the enterprise;
- A copy of the resolution, decision, and minutes of the meeting of the Members’ Council for limited liability companies with two or more members, or the Board of Directors for joint-stock companies; a copy of the resolution or decision of the owner of the company for a one-member limited liability company regarding the establishment of the representative office;
- A decision to establish the representative office;
- A decision appointing the head of the representative office if the head is not also the legal representative or a shareholder, member, or owner of the company;
- A copy of the legal documents of the individual for the head of the representative office;
- An introduction letter or authorization letter for the applicant; a notarized copy of the ID card/citizen ID/passport of the applicant that is still valid (if applicable).
Process of establishing a representative office of a South Korean invested company in Vietnam
Step 1: Prepare the documents for establishing the representative office as outlined above.
Step 2: Relevant individuals in the document must fully sign in the signature section.
Step 3: The company submits the application online through the National Enterprise Registration Portal: https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx.
Step 4: Receive results: The processing time to issue the Certificate of Registration for the Representative Office of the South Korean invested company in Vietnam will be approximately 03 working days from the date of receiving valid documents.
Some important points to note when establishing a representative office of a South Korean invested company in Vietnam
- When establishing a representative office, a report on activities must be sent to the Department of Industry and Trade.
- The head of the representative office is responsible for its activities within the scope of the authorized operations.
- Any changes in the information recorded on the Certificate of Establishment must be reported in accordance with legal regulations.
- Tax regulations for the representative office of a South Korean invested company in Vietnam: According to tax regulations in Vietnam, representative offices engaged in production and business activities must file and pay a license tax of 1,000,000 VND/year. Conversely, representative offices not engaging in production or business activities are exempt from this fee. Additionally, the representative office is responsible for paying taxes on salaries and wages for employees working in the office in accordance with Vietnamese law.
Advantages of establishing a representative office of a South Korean invested company in Vietnam
(1) Since the representative office does not have legal entity status, it does not engage in business activities or generate revenue, thus avoiding tax reporting and accounting obligations.
(2) The main function of the representative office is to serve as a communication office; conducting research, providing information, and supporting businesses in accessing new markets and partners.
(3) Establishing a representative office allows businesses to conduct market research or promote their brand in countries outside their headquarters. It facilitates communication and cooperation with customers in Vietnam.
(4) The representative office is authorized only to conduct promotional and transaction activities on behalf of the parent company, allowing the main office to fully monitor the activities of the representative office under the supervision and direction of the parent company.
(5) It provides businesses with a space to showcase products for easier marketing and advertising to customers.
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Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.
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