Setting Up A Representative Office In Vietnam
The representative office (RO) is a dependent unit of its parent company. The operation of a representative office will be solely confined to the conduct of liaison activities, market research, and promotion of its head office’s businesses, excluding services the establishment of a representative office in which is specified in specialized legislative documents.
The RO is an effective tool for foreign traders to monitor Vietnamese market trends and engage in cooperation with local companies. However, ROs are strictly forbidden to issue invoices, easing the accounting and tax compliance burden for foreign traders.
The organization structure and personnel of a representative office will be decided by their head office. The employment of foreign workers of representative offices comply with legislation on labor and Vietnam’s Commitments to treaties to which Vietnam is a signator. Representative offices are named using letters in Vietnamese alphabet, letters F, J, Z and W, numbers and symbols. The name of a representative office is included by the name of its head office enclosed with the phrases “representative office”.
An application dossier for obtaining the RO license must include:
- An application form for License for Establishment of the representative office using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.
- Copies of the Certificate of Business Registration or equivalent documents of the foreign trader;
- A letter of appointment of the head of the representative office;
- Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established;
- Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office;
- Documents on the expected location of the representative office including:
+ Copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the representative office;
+ Copies of documents on the expected location of the representative office.
Every foreign trader can be eligible for the grant of extension of the license or establishment of the representative office . By January 30th of each year, every representative office have to submit operation status reports using the form stipulated by the Ministry of Industry and Trade to the licensing agency by post. Representative offices and branches will submit reports, documents and explanations for their operation upon the request of competent state regulatory authorities.
Regarding tax, RO has to pay value-added tax (VAT) when buying goods from other Vietnamese Companies, and personal income tax (PIT) for hiring the employers in the RO.
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