WHAT IS A REPRESENTATIVE OFFICE OF A FOREIGN TRADER

WHAT IS A REPRESENTATIVE OFFICE OF A FOREIGN TRADER

In the context of globalization, economic integration, expanding business activities and seeking new opportunities in the international market are becoming popular trends. To accomplish this, many businesses have chosen to set up representative offices in other countries

• What is a company representative office?

According to Clause 2, Article 44 of the Enterprise Law 2020, a representative office is a dependent unit of an enterprise, tasked with representing by authorization the interests of the enterprise and protecting those interests. The representative office of the company does not have legal status and the representative office does not carry out profitable business activities by itself, but only performs the function and task of authorizing activities to protect the interests of the enterprise.

• Dossiers of establishment of representative offices of foreign traders in Vietnam

Foreign traders, when wishing to establish representative offices in Vietnam, need to prepare a dossier including:

• An application form for a license to establish a representative office according to the form of the Ministry of Industry and Trade shall be signed by a competent representative of a foreign trader;
• A copy of the business registration certificate or a document of equivalent value of the foreign trader. This document must be certified or consular legalized by diplomatic missions and consular offices of Vietnam abroad in accordance with the provisions of Vietnamese law;
• Documents of foreign traders appointing/appointing heads of representative offices;
• A copy of the audited financial statements or a written confirmation of the performance of tax or financial obligations in the most recent fiscal year or a document of equivalent value issued or certified by the competent agency or organization where the foreign trader is established,  prove the existence and operation of foreign traders in the latest financial year;
• A copy of the passport or identity card or citizen identification card (if a Vietnamese) or a copy of the passport (if a foreigner) of the head of the representative office;
• Documents on the proposed location of the representative office include: A copy of the memorandum of understanding or agreement on site lease or a copy of documents proving that the company has the right to exploit and use the location of the representative office; A copy of documents on the proposed location of the representative office;
• In case the passport copy of the head of the representative office is a foreigner, it must be translated into Vietnamese and authenticated in accordance with the provisions of Vietnamese law.

• Order and procedures for granting licenses for establishment of representative offices

• Preparation and submission of documents

• Prepare 01 dossier of application for a license to establish a representative office of foreign traders in Vietnam, including the mentioned documents.
• All dossiers of license for establishment of representative offices shall be signed and sealed by the parent company.
• Foreign traders shall submit their dossiers in person or by post or online (if applicable) to the Licensing Authority where the representative office is to be located.

1. Receiving dossiers and issuing establishment licenses

• Within 03 working days from the date of receipt of the dossier, the licensing agency shall inspect and make additional requests if the dossier is incomplete and valid. Requests for additional documents are made up to once during the application processing process.
• Within 07 working days from the date of receipt of a complete and valid dossier, the licensing agency shall grant or fail to grant a license to establish a representative office for foreign traders. In case of refusal to license, a written statement clearly stating the reasons therefor must be provided.

In case the operation contents of a representative office are inconsistent with the commitments of Vietnam or foreign traders not belonging to countries or territories acceding to treaties to which Vietnam is a contracting party and in case the establishment of a representative office has not been prescribed in specialized legal documents, the following shall be handled:

• The licensing agency shall send a written request for opinions of the Ministry of specialized management within 03 working days from the date of receipt of a complete and valid dossier.
• Within 05 working days from the date of receipt of the written request for opinions of the licensing agency, the Ministry of specialized management shall clearly state its agreement or disagreement with the license to establish a representative office.
• Within 05 working days from the date of receipt of comments from the Ministry of specialized management, the licensing agency shall grant or not grant a license to establish a representative office for the foreign company. In case of refusal to grant a license, there must be a written statement clearly stating the reason.

1. Engraving of circular marks and registration of seal samples of representative offices

The seal engraving procedure shall be carried out at the Administrative Management Office for Social Order and Safety of the Police of the province/city where the head office of the representative office is located.

The stamped dossier includes:

• Certified copy of the license for establishment of a representative office;
• Certified copy of ID card/passport of the head of the foreign trader’s representative office;
• Power of attorney in cases where foreign traders authorize other individuals or organizations to engrave seals and register seal samples.

Completion deadline: 05 working days.

• Registration for issuance of tax code for the company’s representative office

A dossier of tax code issuance to a representative office must be submitted to the tax authority within 10 days from the date of issuance of the Certificate of establishment of a representative office.

A dossier of application for a tax code includes:

• Tax registration declaration
• Certified copy of the license for establishment of a representative office
• Power of attorney

Time limit for issuance of tax code: 05 – 07 working days from the date the tax authority receives a complete and valid dossier.

Accordingly:

Departments of Industry and Trade of provinces and centrally-run cities where enterprises plan to set up their representative offices outside industrial parks, export processing zones, economic zones and hi-tech parks shall grant, re-grant, adjust, extend and revoke licenses for establishment of representative offices and terminate operation of representative offices in case of office establishment representation has not been specified in specialized legal documents.

Management Boards of industrial parks, export processing zones, economic zones and hi-tech parks (hereinafter collectively referred to as Management Boards) shall grant, re-grant, adjust, extend and revoke licenses for establishment of representative offices and terminate operation of representative offices located in industrial parks,  export processing zones, economic zones or hi-tech parks in cases where the establishment of representative offices has not been prescribed in specialized legal documents

In summary, the representative office of the foreign company is not only a working location but also an important bridge between the business and the local market. It not only brings convenience in business management but is also an important tool in demonstrating commitment and cultural exchange between countries.

By establishing a representative office, businesses can take advantage of local advantages, build strong partnerships, and create an active presence in the business communities in which they operate. At the same time, the representative office also helps businesses quickly adapt to the local environment and better understand the needs of customers, thereby optimizing business strategies and achieving success in the international market.

Above are Siglaw’s sharing about legal regulations related to representative offices of foreign traders. If you have any questions about representative offices of foreign traders, please contact Siglaw to receive the most accurate, professional and effective advice.

Siglaw Law Firm

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