How to establish a foreign company branch in Vietnam?

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There are many foreign companies that want to invest in Vietnam by setting up branches in Vietnam. In this article, we will provide basic information about the procedures to establish a branch in Vietnam.

1. What is the branch of a foreign company in Vietnamese law

What is a branch of a foreign company under Vietnamese law - lookoffice.vn

Under the current provisions of Vietnamese law, a foreign company may establish a branch in Vietnam under the conditions and procedures prescribed by Vietnamese law.

The current Vietnamese Law on Enterprises defines an enterprise’s branch as a dependent unit of an enterprise, with the task of performing all or part of the enterprise’s functions, including the function of authorized representation. Accordingly, the concept of a foreign company branch in Vietnam can be understood as a dependent unit of a foreign company, established and operating in Vietnam under the provisions of Vietnamese law or national treaties.

2. Why do foreign companies choose to locate branches in Vietnam?

Why do foreign companies choose to set up branches in Vietnam - lookoffice.vn

Rights of branches of foreign companies in Vietnam

– Office for lease, rental purchase of facilities and equipment necessary for the branch’s operations.
– Recruit employees of Vietnamese nationality and foreigners to work at the Branch in accordance with Vietnamese law.
– Enter into a contract in Vietnam in accordance with the operation contents stated in the branch establishment license and the provisions of law.
– Open VND and foreign currency accounts at banks licensed to operate in Vietnam.
– Transfer profits to foreign companies in accordance with the provisions of Vietnamese law
– Have the branch’s stamp in accordance with the laws of Vietnam.
– Carrying out goods sale and purchase activities and other commercial activities in accordance with the establishment license, the provisions of Vietnamese law, and international treaties to which the Socialist Republic of Vietnam is a signatory.

3. How to establish a foreign company branch

3.1. Conditions for establishing a foreign company branch in Vietnam

Conditions for setting up a branch of a foreign company in Vietnam - lookoffice.vn

Foreign companies wishing to establish a branch in Vietnam must go through the procedures for registering a branch establishment license. A foreign company may not establish many branches with the same name in a province or centrally run city. In addition, foreign companies must also meet the following requirements:

– Foreign companies established and registered under the laws of valid countries and territories complying with international treaties to which Vietnam is a member or protected by the laws of these territories.
The foreign company has been established or registered for at least 5 years. The business registration certificate or equivalent document of the foreign company defines the duration of the company as at least 1 year from the filing date.

3.2. Application file for a branch establishment license

3.2. Application file for a branch establishment license - lookoffice.vn
An application for a branch establishment license includes
An application for a branch establishment license includes
– A copy of the business registration certificate or equivalent document of the foreign company;
– The document of the foreign company appointing the head of the branch;
– A copy of an audited financial statement or a written confirmation of the fulfillment of tax obligations, financial obligations of the most recent fiscal year, or an equivalent document of a competent agency or organization of the corporate. Foreign establishments granting or certifying the existence and operation of the foreign company in the most recent fiscal year;
– Copy of the branch charter;
– A copy of the passport or identity card or citizen identification card (for Vietnamese) or a copy of the passport (for foreigners) of the head of the branch;
– Documentation of the expected location of the branch office.

3.3. General conditions about the application file for a branch establishment license

Documents issued or certified by competent foreign agencies must be consular legalized and translated into Vietnamese; Translated documents must be notarized according to the provisions of Vietnamese law.

– Copies of papers issued or authenticated by competent Vietnamese agencies must be notarized according to the provisions of Vietnamese law.

4. Branch establishment license registration process

Branch establishment license registration process - lookoffice.vn
Step 1: Prepare the necessary documents and then submit them to the competent authority
Step 2: Handling documents
Within 03 working days from the day on which the application is received, the Ministry will consider the application and request additional supplements if the application is incomplete or invalid. Request for additional documentation is made up to a maximum of once during the application process.
Within 7 working days, starting from the date of receiving a complete and valid dossier, the Ministry decides to grant or not to grant a branch establishment license to the foreign company. In case of refusal to grant a license, the competent authority must issue a document clearly stating the reason.
The term of the Branch establishment license is 5 years, however, this period shall not exceed the remaining period of the Business Registration Certificate or an equivalent document of the foreign company in case this document is still valid.