Establishing a representative office of a Hong Kong-invested company in Vietnam.

 A representative office of a Hong Kong-invested company in Vietnam is a subsidiary of a Hong Kong-invested enterprise, established under Vietnamese law for the purpose of promoting trade, with the task of representing and protecting the interests of the company on an authorized basis.

A representative office does not have a legal personality and is a subsidiary of a Hong Kong-owned company, so the representative office does not carry out its own activities in Vietnam. A representative office in Vietnam only performs authorized functions and activities to protect the interests of the Hong Kong-invested enterprise in Vietnam.

Requirements for establishing a representative office of a Hong Kong-invested company in Vietnam.

A Hong Kong-invested enterprise in Vietnam may establish a representative office if it meets the following conditions:

• The Hong Kong-invested enterprise wishing to establish a representative office in Vietnam must have been in continuous operation for at least one year from the date of issuance of the business license;
• The validity period of the business license or equivalent documents of the Hong Kong-invested company wishing to establish a representative office must be at least one year from the date of filing the application for the establishment of the representative office;
• Foreign traders must belong to a country or territory that is a party to an international treaty to which Vietnam is a member or is recognized by law in such countries or territories;
• The business activities of the representative office of the Hong Kong-invested company must be consistent with Vietnam’s commitments in international treaties to which Vietnam is a member;
• The Hong Kong-invested company wishing to establish a representative office in Vietnam within 2 years shall not be subject to the revocation of the representative office license as of the date of filing the application for a representative office establishment license;
• The establishment of a representative office of a Hong Kong-invested company must comply with issues of security, defense, safety, social ethics, and public health.

Note: In case the representative office does not meet the time limit of the business license, or other documents, or the foreign trader is not recognized by Vietnamese law, the application for the establishment of a representative office of a Hong Kong-invested company must be approved by the Minister of the relevant management agency.

Application for establishment of a representative office of a Hong Kong-invested enterprise.

To establish a representative office of a Hong Kong-invested company in Vietnam, the following documents must be prepared:

• Application for a license to establish a representative office;
• Certified copy of the business license;
• Documents equivalent to the business license (if any);
• Appointment letter for the head of the representative office;
• Copy of the financial report or tax compliance certificate for the most recent fiscal year;
• Copy of the ID card/passport of the head of the representative office;
• Documents proving the right to use the land for the representative office.

Note: The application for establishing a representative office must be signed and stamped by the parent company. It must be legalized by the consulate, translated into Vietnamese, and notarized.

Reasons why a Hong Kong-invested company should establish a representative office in Vietnam.

Established for the purpose of market research.

For foreign enterprises entering the Vietnamese market for the first time, primarily for brand promotion, familiarization, and market research, establishing a representative office is an option that helps businesses save costs and simplify legal procedures. This creates conditions for businesses to learn about and get acquainted with the Vietnamese market, helping them easily find a suitable market for their business line.

Simple procedures

Compared to establishing a commercial presence in Vietnam through other forms such as business cooperation contracts, foreign-invested enterprises, or branch offices, the procedures for opening a representative office are considered the least complicated.

Cost saving

Another advantage of opening a representative office is that it is not subject to corporate income tax because it does not engage in pure business activities; instead, it only needs to declare and pay personal income tax for the office staff.

Establishing a Hong Kong-invested enterprise in Vietnam requires going through many stages with complex procedures and paperwork, and the cost for this is quite expensive. Spending a large amount of money to establish a business while not having thoroughly researched the market is a rather risky step for the business.

The cost benefits of establishing a representative office in Vietnam are likely to satisfy Hong Kong businessmen in terms of profit.

Quick licensing

The time to obtain a Representative Office Establishment License is quite fast; only about 7 working days from the date of submitting a complete and valid dossier to the licensing authority, the Office can be granted a license to operate.

Preparation for establishing a Hong Kong-based business

According to regulations, representative offices of Hong Kong-invested companies are not permitted to engage in business activities or other profit-making activities. However, they are still considered entities that perform functions such as liaison, market research, and promotion of investment opportunities for Hong Kong-invested enterprises in Vietnam.

Above is some information about establishing a representative office of a Hong Kong-invested company in Vietnam that Siglaw would like to introduce to you. If you have any questions related to establishing a representative office of a Hong Kong-invested company in Vietnam, you can directly contact Siglaw Law Firm for support!

Siglaw Law Firm

Phone: (+84) 961 366 238

Email:

• vphn@siglaw.com.vn
• vphcm@siglaw.com.vn

Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.

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