ESTABLISHING A BRANCH OF A FOREIGN COMPANY IN VIETNAM

The development of trade and international integration makes many businesses wish to expand their scale beyond the territory of the host country, opening more branches in various nations. In Vietnam, a foreign enterprise that wants to establish a branch needs to meet certain conditions and procedures.

CONDITIONS FOR ESTABLISHING A BRANCH OF A FOREIGN COMPANY IN VIETNAM

A foreign company wishing to establish a branch in Vietnam needs to meet the conditions specified in Article 8 of Decree 07/2016 of the Government, including:

• Foreign traders are allowed to establish and register their business in accordance with the laws of the countries or territories participating in international treaties to which Vietnam is a contracting party or recognized by the laws of these countries and territories;
• Foreign traders have operated for at least five years from the date of establishment or registration;
• In case the foreign trader’s business registration certificate or paper of equivalent value has a term for operation, such time limit must be at least one year from the date of application;
• The operation of the branch must be consistent with Vietnam’s commitment to open the market in international treaties to which Vietnam is a signatory and with the business lines of foreign traders.

In cases where the operation of the branch is not consistent with the commitments of Vietnam or the foreign trader is not a country or territory participating in an international treaty to which Vietnam is a contracting party, the establishment of the branch must be approved by the Minister of specialized management.

The conditions at points 4 and 5 above are new conditions in accordance with international treaties to which Vietnam is a signatory after the date of promulgation of the Commercial Law of 2005. These conditions are intended to ensure that establishing a branch of a foreign trader must meet the general conditions under international commitments to which Vietnam is a member.

DOSSIER TO ESTABLISH A BRANCH OF A FOREIGN COMPANY IN VIETNAM

Foreign enterprises need to prepare a dossier, including the following documents:

• An application form for a branch establishment license, made according to the form of the Ministry of Industry and Trade, signed by a competent representative of the foreign trader;
• A copy of the business registration certificate or equivalent document of the foreign trader;
• The document of the foreign trader appointing the head of the branch;
• A copy of the audited financial statement, a written certification of the fulfillment of tax or financial obligations in the latest fiscal year, or an equivalent document issued by a competent agency or organization where the foreign trader is located certifies and proves the existence and operation of foreign traders in the latest fiscal year;
• A copy of the Branch’s Charter;
• Notarized copy of passport, people’s identity card or citizen identification card of the head of the branch;
• Documents about the proposed location of the branch office, including: A copy of the memorandum of understanding or agreement to rent the location or a copy of the document proving that the trader has the right to exploit and use the location to locate the branch office; A copy of the document on the proposed location of the branch’s head office: The branch of the foreign trader must comply with the provisions of Vietnamese law on security, order, occupational safety and health conditions and other conditions as prescribed by law. Branches are not allowed to lend or sublease their headquarters.

PROCEDURES FOR SETTING UP A BRANCH OF A FOREIGN COMPANY IN VIETNAM

Step 1: Submit your application

Foreign traders submit dossiers directly, by post, or online (if eligible) to the licensing agency (Ministry of Industry and Trade).

Step 2: Check the dossier

Within three working days from the date of receipt of the application, the licensing agency shall examine and request supplementation if the application is incomplete or invalid. The request for additional records is made at most once during the processing of the application.

Step 3: Announce branch information

Within 15 days from the date of grant, re-issue, adjustment, extension, and revocation of the License to establish a branch, the licensing agency shall publish on its website the following contents: :

• Name and address of the branch office;
• Name and address of the head office of the foreign trader;
• Head of the branch;
• Number, date of issue and term of branch establishment license, licensing agency;
• Activities of the branch;
• Date of re-issuance, adjustment, extension, and revocation of branch establishment license

CONDITIONS FOR THE HEAD OF THE BRANCH

The branch director must be responsible to the foreign trader for his or her activities and those of the branch to the extent authorized by the foreign trader.

The branch director must be responsible for his/her activities if they fall outside the scope authorized by the foreign trader.

The branch director must authorize in writing another person to perform his/her rights and obligations under the law when leaving Vietnam. The foreign trader must approve this authorization. The branch Director is still responsible for exercising the authorized rights and obligations.

If the authorization period as prescribed at Point 3 above expires, the branch director has not returned to Vietnam and has no other authorization, the authorized person has the right to continue exercising the rights and obligations of the branch director. The branch is authorized until the branch director returns to work at the branch or until the foreign trader appoints another person to be the head of the branch.

In case the branch director is not present in Vietnam for more than 30 days without authorizing another person to exercise the rights and obligations of the head of the branch, is dead, missing, detained, or sentenced to prison, or has limited or lost his/her civil act capacity, the foreign trader must appoint another person to be the head of the branch.

Branch directors of foreign traders may not concurrently hold the following positions:

• Head of the representative office of another foreign trader;
• Head of the representative office of the same foreign trader;
• The legal representative of an economic organization established in accordance with the laws of Vietnam.

For a free, comprehensive consultation on setting up a branch of a foreign company in Vietnam, please contact:

Siglaw Firm

Head office in Hanoi City: 12A Floor Sao Mai Building, No. 19 Le Van Luong Street, Nhan Chinh Ward, Thanh Xuan District, Hanoi City.

Email: vphn@siglaw.com.vn

Branch in the South: 21 N4 Street, Commercial, Service and Residential Complex at 16/9 Bui Van Ba Street, Tan Thuan Dong Ward, District 7, Ho Chi Minh City.

Central Branch: 177 Trung Nu Vuong Street, Hai Chau District, Danang City

Email: vphcm@siglaw.com.vn

Hotline: 0961 366 238