Regulation in vietnam

1. Conditions for opening an office in Vietnam
→ REFERENCE:
• Website: https://aslgate.com/open-representative-office-in-vietnam/
• Contact of LAW Firm for doing business in Vietnam:
ASL LAW FIRM IN HANOI: 12th Floor, Tower 319 , 63 Le Van Luong street, Trung Hoa Ward, Cau Giay District, Hanoi city, Vietnam
Tel: (+84) 435551315; Hotline: +84982682122
Email: khuong.pham@aslgate.com ; info@aslgate.com

2. WHAT IS REPRESENTATIVE OFFICE IN VIETNAM (RO)?
According to Vietnam’s laws, a representative office (RO) is not permitted to perform any
activities generating profit or any trade activities. The establishment of a RO is not
considered as a legal commercial presence in Vietnam. For more detail, please refer to the
scope of permissible activities of a RO:
– Operating as liaison office.
– Promoting the cooperation projects of foreign company in Vietnam.
– Researching market to push up chances to purchase commodities, supply and consume
commercial services of foreign businesses in Vietnam.
– Supervising the implementation of foreign company’ contracts signed with Vietnamese
partners or related to the Vietnamese market.

3. HOW LONG DOES IT TAKE TO OPEN REPRESENTATIVE OFFICE IN
VIETNAM?
– Applying the license for the representative office : 25 working days
– Applying for the seal of the representative office : 5 working days
– Applying for the tax code of the representative office : 5 working days
– Publication of the RO’s establishment : 5 days
WHAT IS TERM OF LICENSE OF REPRESENTATIVE OFFICE IN
VIETNAM?
The license shall be valid for five years and can be renewed. In such case of renewal, an
application shall be submitted at least thirty days prior to the due date.

4. WHAT ARE REQUIRED DOCUMENTS TO OPEN REPRESENTATIVE
OFFICE IN VIETNAM?
In order to open representative office in Vietnam, a license issued by a competent authority is required. In addition
to the condition that the parent company must operate for at least 1 year in original country prior to setting up
representative in Vietnam, the required documents for the application for obtaining such license include:

5. ESTABLISHMENT OF REPRESENTATIVE
OFFICES OF FOREIGN TRADERS IN VIETNAM
→ REFERENCE:
• Website: https://kenfoxlaw.com/guidance-for-setting-up-a-representative-office-of-foreign-companies-in-vietnam
• Contact of Law Firm:
KENFOX – IP & LAW OFFICE: Suite 219, 5th Floor Building, Lane 109, Truong Chinh Street, Thanh Xuan District, Hanoi, Vietnam
Tel: (84-4) 3724.5656; Fax: (84-4) 3724.5885
Email: info@kenfoxlaw.com

6. Governing Laws
Key laws and regulations on establishment of the Rep Office include:
• Commercial Law adopted by the National Assembly on 14 June 2005 ("Commercial Law");
• Decree No. 07/2016/ND-CP dated 25 January 2016 of the Government providing detailed
regulations for implementation of the Commercial Law with respect to representative
offices and branches of foreign traders in Vietnam ("Decree 07/2016"); and
• Circular No.ll/2016/TT-BCT dated 5 July 2016 of the Ministry of Industry and Trade
promulgating forms prescribed in Decree 07/2016 ("Circular 11/2016").

7. Licensing Authority
The licensing authority for issuance of the License for establishment of the Rep Office ("License") is:
• Provincial-level Management Boards of Industrial Zone (IZ), Export Processing Zone (EPZ),
High-tech Zone (HTZ) or Economic Zone (EZ) ("IZMB" ) (if the Rep Office is located within
the IZ, EPZ, HTZ, or EZ); or
• Provincial Department of Industry and Trade ("DOIT" ) (if the Rep Office is located outside of the IZ,
EPZ, HTZ, or EZ).

8. Conditions for issuance of License, and cases which are ineligible for
issuance of License
a. Conditions for issuance of the License
Foreign traders shall be considered for being granted with the License for establishment of the Rep Office if they
satisfy the following conditions:
• Foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries
or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or
territories;
• Foreign trader has come into operation for at least 01 year from the date of its establishment;
• In case the Certificate of Business Registration of the foreign trader provides an operation term, the remaining
term should be at least 01 year as from the date of submission of application dossier for setting up the Rep Office;
• Scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to
which Vietnam is a signatory;
• Where the scope of operation of the Rep Office is inconsistent with Vietnam's commitments or the foreign trader
is not located in the country or territory being party to treaties to which Vietnam is a signatory, the establishment of
the Rep Office shall be subject to the prior approval of relevant Ministry.

9. Conditions for issuance of License, and cases which are ineligible for
issuance of License
b. Cases which are ineligible for issuance of the License for establishment of the Rep Office
The Licensing Authority shall refuse to grant the License for establishment of the Rep Office in
the following cases:
• Failing to satisfy one of condition for issuance of the License (as mentioned in (3)a.above);
• Applying for the License for establishment of the Rep Office within 02 years from the date of
revocation of the License for establishment of the Rep Office;
• The establishment of Rep Office is restricted by the laws for reasons of national defense and
security, social order, social ethics and community health;
• Other cases as restricted by the laws (if any).

10. Licensing Procedure
a. Application Dossier
The application dossier submitted to the Licensing Authority for obtaining the License includes:
• An original copy of application dossier for setting up the Rep Office;
• A legalized copy and a notarized translation copy of the Certificate of Business Registration of the foreign trader
(and any amendments);
• A certified translation copy of the audited financial statement of the foreign trader for its latest financial year
audited by an auditing firm, or the confirmation on status taxation obligations or other evidence documents
issued and/or certified by the foreign authority evidencing its existence in the latest fiscal year;
• A certified translation copy of the Letter of Appointment of Chief Rep issued by the foreign trader;
• A certified translation copy of the passport or Identity Card of Chief Rep;
• An original or certified copy of the Office Lease Contract and certified copy of documents related to leased
premise evidencing that the leased premise shall comply with security, labour hygiene safety and other
requirements of applicable laws; and
• An original copy of Power of Attorney.
In practice, the Licensing Authority may require further documents or information with a view to verify relevant
points in the application dossier.

11. Licensing Procedure
b. Timelines for the License issuance
Within 07 working days from the date of receipt of the valid application/dossier, the licensing authority shall make
its own decision on either issuance of a License to foreign trader or rejection of its application dossier by having a
written notice to foreign trader specifying clearly the reason for rejection.
For the establishment of Rep Office which requires the prior approval of the relevant Ministry or the establishment
of Rep Office which is not provided in any specific regulations of Vietnam yet, the Licensing Authority shall send a
letter asking for opinions from the relevant Ministry within a 03 working day time-limit from receipt of a complete
application dossier. Within a 05 working days upon receipt of the Licensing Authority's letter, the relevant Ministry
shall provide its written opinion and within another 05 working day time-limit from receipt of the relevant Ministry's
opinion, the Licensing Authority will issue the License to foreign trader or reject its application by having a written
notice to foreign trader specifying clearly the reason for rejection.
In practice, the entire process may be longer for several reasons (e.g. communications between relevant
authorities, etc.), and the Licensing Authority will have its own discretion when considering the application dossier.

12. Licensing Procedure
c. Term of License
The License has a term of 05 years. If the parent company's business license or establishment
certificate expires, the License will also expire. In other words, the life term of the Rep Office
cannot exceed any term of existence of its parent company.
However, it is noted that the License may be extended at the request of the foreign trader, and
for that purpose, the request for extension must be made at least 30 days prior to the expiry of the License.

13. Post-licensing Works
After obtaining the License, the Rep Office must carry out other post-licensing works, as follows:
a. Registering and obtaining the Seal of the Rep Office
To register the seal sample and obtain the seal, the application dosser shall be required to be
submitted to the competent police authority. Normally, the seal of the Rep Office shall be
provided within around 05 working days since the date of submission.
b. Registering the Tax Code of the Rep Office
Though there is no tax imposed on the Rep Office's operation, the Rep Office must submit the
application dossier to the taxation authority for obtaining the Tax Code of the Rep Office (for
purpose of tax declaration and contribution on behalf of the employees of the Rep Office).
c. Opening the Bank Account of the Rep Office
The Rep Office shall open a bank account for spending only purpose at a bank in Vietnam. The
procedure will depend on the bank that the Rep Office elects to open for its convenience.

14. Operation of the Rep Office
a. Permitted Activities
As a non-profit making entity, the Rep Office is permitted to carry out only the following activities:
• To act as a liaison office for the parent company in Vietnam;
• To conduct market research in Vietnam;
• To promote the opportunities of investing and trading for the parent company in Vietnam, not including the
services for which the establishment of Rep Office in this service sector is governed by the specific
regulations.
b. Prohibited Activities
The Rep Office is prohibited from "conducting business" for profitmaking purpose. In addition, it
is not permitted to promote the goods or services of its parent company or enter into contracts
directly under its own name, with local companies for such promotion, as well as to act as the
representative for other trader.

15. Operation of the Rep Office
c. Appointment of the Chief of the Rep Office
The Chief of the Rep Office may not concurrently hold the following positions:
• Chief of a branch which is established by the parent company or other foreign business
traders in Vietnam;
• Legal representative of the parent company or other foreign traders;
• Legal representative of an enterprise established pursuant to the laws of Vietnam;
It is required that the Chief of the Rep Office must authorize in writing another person to
perform his/her rights and obligations relating to the Rep Office whenever she/he is not in
Vietnam. Such an authorization must be approved by theforeign trader and the Chief of the Rep
Office is still responsible for performance of authorized rights and obligation. In case that the
Chief of the Rep Office is not in Vietnam during a period of more than 30 days without a valid
authorization, then theforeign trader must appoint another person to the position of the Chief of
the Rep Office.

16. Operation of the Rep Office
d. Labour Matters
The Rep Office, as the employer, may employ Vietnamese and foreigners in accordance with the
laws on labour. The number of employees and relevant information are required to be reported
to the authorities. All foreigners, including the Chief of the Rep Office working for the Rep Office
are required to obtain a work permit.
e. Tax Matters
The Rep Office, as the employer, must register personal income tax code for; declare, submit
and pay monthly personal income tax of; and complete personal income tax finalization for its
employees; (although the labour contracts can provide that personal income tax is included in
their salary).

17. Operation of the Rep Office
f. Reporting Regime
Each year, prior to the last 30 of January, the Rep Office must notify the Licensing Authority ( i.e.
DOIT or IZMB) of its operations over the previous year. The Rep Office is also obliged to provide
reports relevant to tax and labour matters at request of relevant authorities.
g. Registration of Changes
During the validity period of the License, any changes to the contents of the License (including
the change of name, change of addresses of the Rep Office or of the parent company, change of
the Chief of the Rep Office, change of the operation contents of the Rep Office), the Rep Office
is required to carry out relevant procedures to record such change with the licensing authorities
and obtain the revised License within 60 working days as from the date of having such changes.
Other papers also need to be revised, including the certificate of tax code, certificate of seal
sample, seal, etc., to reflect this change.

18. Company Registration in Vietnam
→ REFERENCE:
• Website: https://prifinance.com/en/asian-companies/vietnam/
• Contact of LAW Firm:
PRIFINANCE (PRIVATE FINANCE INTERNATIONAL SERVICE): 272 Bath Street, G2 4JR, Glasgow, United Kingdom
Tel: +44 203 769 29 09 ; +372 602 65 11
Email: info.en@prifinance.com ; uk@prifinance.com

19. Forms of legal presence and business
• A limited liability company is common in Vietnam, open to foreign investors. The obligations of the participants of
this type of legal entity are limited solely to the number of funds invested. The number of participants is limited -
from 2 to 50 people. This is the most flexible form of business, not associated with demanding accounting and
reporting.
• A joint-stock company is a Vietnamese legal entity with a more complex management structure and must
comply with stricter reporting requirements. Nevertheless, the liability of the shareholders of this Vietnamese
legal entity is limited exclusively to the number of funds invested, and third parties can freely dispose of their
shares. The minimum number of participants is 3, and there are no restrictions on the maximum number of
participants in the JSC.
• A General Partnership is a form of business conduct in which participants jointly make business decisions and
bear complete financial responsibility for the results of their implementation.
• Limited Liability Partnerships are a type of business in which some partners are fully responsible for the results
of the business and take over its management, and limited liability partners, who do not take part in the
management of the business but do not risk with sums they have invested.
• A branch is an entrepreneurial option in which a foreign legal entity can conduct the same activities in Vietnam
as abroad.
• Representation is an option that will suit foreign investors if they plan to monitor and analyze the local markets
solely. The option does not include the possibility of conducting business activities but will be suitable for foreign
legal entities evaluating the likelihood of investing large sums of money in Vietnam.

20. Procedure and nuances of company registration in Vietnam
The registration documents package is formed, considering the case's background. But if you plan to open a
business in Vietnam, you will, in any case, need the following:
1. Investment Registration Certificate. When registering a foreign capital company in Vietnam, you need an
investment registration certificate. The Department of Planning and Investment issues this certificate. It usually
takes about a month to obtain the certificate.
2. Business Registration Certificate. Companies in Vietnam must also obtain a Business Registration Certificate
(BRC). The Department of Planning and Investment also issues this certificate.
3. Tax registration and tax payment for the business license. The business license certificate number is also
the tax number of the company. All companies must pay taxes through the online system. Companies also file
tax returns and reports through this system. To access this system, businesses must obtain an electronic
signature.
4. Capital contribution. Once you receive your BRC, you have 90 days to make a capital contribution. Failure to
do so will result in a penalty.
5. Apply for sublicenses or permits, if applicable. Registering a company in Vietnam takes about a month.
However, depending on the line of business, some companies need to apply for sublicenses. In such cases, the
registration process will be longer.

21. Procedure and nuances of company registration in Vietnam
An approximate list of steps to be taken to register a company in Vietnam is as follows:
1. Determination of commercial priorities and preparation of a business plan for the future Vietnamese legal entity.
2. Selection and reservation of the commercial name for the Vietnamese legal entity.
3. Collection of data and documents required for registration.
4. Selecting and arranging the official registered address for a Vietnamese legal entity.
5. Drawing up and executing constituent and registration documents.
6. Formation and submission for consideration of the registration package of documents, including the document
on payment of registration fees. At this stage, the investment and the legal entity itself are registered.
7. Registration for tax and social security purposes.
8. Opening a bank account.
9. Obtaining additional permits and licenses for certain regulated activities.

22. Legislation and regulatory environment
Vietnam offers favorable conditions for starting and doing business, including international business. Vietnam
allows 100% foreign ownership of companies in most industries. However, it should be enough to cover expenses
until the business becomes self-sustaining. You must have a legal address to register a company in Vietnam. All
companies in Vietnam must have at least one resident director). Prifinance lawyers are ready to advise in detail on
the regulatory peculiarities of doing business in Vietnam.
VIETNAM’S TAX SYSTEM:
• Corporate tax - 20%.
• Personal income tax - 20-35% (depending on the payer and the amount of income).
• VAT - 10%.
• Withholding tax - varies depending on the type of income.
• Capital Gains Tax - (1) corporate - see corporate tax (2) individual - see personal income tax.

23. How to Start A Business in Vietnam
→ REFERENCE:
• Website:
https://www.cekindo.vn/blog/comprehensive-guide-to-establishing-branch-office-vietnamB
https://bbcincorp.com/vn/articles/how-to-start-a-business-in-vietnam-as-a-foreigner
• Contact of LAW Firm:
BBCIncorp: Room 9, 4F, Beverley Commercial Centre, 87-105 Chantam road South, Tsim Sha Tsui, Kowloon, Hong Kong ;
service@bbcincorp.com ; (+852) 8192 8666 - (+65) 3138 1666
Cekindo: Cekindo Business International Shark building - 3rd & 8th Floor 29 Nguyen Van Mai Street Ward 8, District 3 Ho Chi Minh
City 72408, Vietnam ; vietnam@cekindo.com ; +84 90 634 52 59

24. Investment
• Direct foreign investment
Work together with a Vietnamese partner in a 100% foreign-owned
company or a joint venture company
Need and enterprise license and go through legal procedures according to
local law
• Indirect investment
Purchase shares of companies in Vietnam
Grants a position in company management (depondon the agreement)

25. Grants
• Support for training and development of human resources.
• Credit support.
• Support of access to production or business sites, or to relocate production
or business establishments.
• Support for science, technology or technology transfer.
• Support for market development and provision of information.
• Support for research and development.

26. Incentives
• Exemption from or a lower rate of corporate income tax for a set number of
years.
• Exemption from import duty in respect of goods imported to form fixed
assets and for raw materials, supplies and components for implementation
of an investment project.
• Exemption from and/or reduction of land rent, land use fees, and land use
tax.
• Accelerated depreciation, increase of deductible expenses from the
taxable income.

27. When a company creates a branch in another country, it must adhere to the
local legal compliances. Similarly, a foreign businessperson undertaking
commercial operations in Vietnam must comply with the law’s requirements
for the creation of a branch office in Vietnam, and each foreign
businessperson is limited to one branch per province or town.

28. Aspect of a Branch Office in Vietnam
• Structure of a Branch Office
can be opened if only there is already an existing entity in the home
country
providing legitimate business licenses of incorporation from the home
country
• Branch Manager
In charge person of the daily operations of that branch, must be assigned
as the legal representative based in Vietnam.

29. Process for Incorporating a Branch Office in
Vietnam
• Takes 30 to 60 days
• First stage: obtain the registration certificate and branch’s seal

30. Legal Requirements for a Branch Office in
Vietnam
• Corporate investor (The Owner)’s Business Certificate/ Enterprise
Certificate/ Company Certificate or equivalent documents from the country
of origin.
• Copies of audited financial statements of the 5 previous years
• Passport or ID card of the head of the branch
• (MOU) or office leasing agreements
• POA from the Corporate investor to Cekindo
• A letter of appointment of the head of the Branch
• All documentation requested from the home country must be translated
and legalized.