When it comes to company registration in Vietnam, one of the legal entity options a foreign company would consider for their business establishment is a representative office.
A representative office gives a low-cost option for companies, especially for the first-time entrants who seek to understand the Vietnamese market. This is usually done before a foreign company makes a full entry or a larger presence by setting up a foreign company in Vietnam.
This article provides you with a quick guide to help you, as a foreign company, set up a representative office in Vietnam.
Vietnam Company Registration with A Representative Office
What CAN a Representative Office Do?
Activities that a representative office is permitted to do are the following:
- Market research
- Serving as its parent company liaison company
- Activities for promotion purposes through seminars, meetings, seminars or other activities.
What CAN’T a Representative Office Do?
A representative office is forbidden to carry out the following activities:
- Any business activities that will generate income or revenue for the parent company.
- Making deals through contracts or agreements
- Issuing invoices for transactions
The government in Vietnam has issued Circular 68 to give guidance on Decree 119 with regard to the use of e-invoices. Check Digitalising Vietnam through E-invoices: Your Guideline to understand more.
Business Registration Process of a Representative Office
Before getting a license for your representative office establishment, you will need to make sure that the following documents are ready. Most of the documents required a consularized copy and a notarised copy. Also, they will need to be translated into certified Vietnamese copies.
- Filled application with company’s stamp
- Chief of representative office’s appointment letter with company’s stamp and identification documents
- The power of attorney for application submission
- Incorporation certification and business registration certificate of the parent company
- Latest audited financial report of the parent company
- Document stating the landlord’s legal rights for leasing the office
- Memorandum of Understanding (MoU) of leasing contract
- A signed leasing contract
Business Process after Successful Representative Office Licensing
After you have acquired the representative office license, here are the things you will need to do to complete the entire representative office establishment process. Keep in mind that all required documents shall be notarized and translated into Vietnamese.
- Making a seal for the documents of your representative office: representative office establishment license, and Chief of representative office’s passport (for foreigners) or ID (for Vietnamese)
- Registering your representative office’s tax code: declaration, power of attorney, representative office certificate in Vietnam, and seal registration certificate
- Opening your representative office’s bank account: license of representative office establishment, seal registration certificate, tax code registration certificate, authorisation letter appointing the account’s authorised signatories
- Announcement of the representative office establishment
Establishment Duration of Representative Office
The timeframe for setting up a representative office is between 1.5 months to 2 months. Cekindo recommends you to hire a professional consultant to help you through the entire setup process for compliance and time-saving.
The validity of a representative office license is five years, and extendable for an extra five years.
Tax Reporting and Hiring for Representative Office
Currently, Vietnam has no restriction on the number of foreign employees that a representative office can hire. Of course, a work permit is required for each foreign worker in Vietnam. Hiring and recruiting of foreigners can be made easy through the assistance of a recruitment and HR agency.
As for tax reporting, a representative office is only responsible for employee’s personal income tax (PIT), but not subject to corporate income tax (CIT) in Vietnam. All tax reports have to be submitted by January 30 every year.
The personal income tax system in Vietnam can be challenging. Check Personal Income Tax for Expatriates: Your Easy Guide to get a better understanding of the key regulatory elements.
How Cekindo can Help Set Up A Representative Office
Setting up a representative office in Vietnam requires legal expertise and experience. Follow the following steps for a smooth business setup in Vietnam.
- Get in touch with us by filling in the form below.
- Our legal consultants will provide 1-hour free consultation by phone or virtual meeting.
- We will then provide you with instructions on the necessary documents and payment details.
- Send us all the required documents and we will submit your application on your behalf, even if you are not in Vietnam.
- Your application will be processed and we will notify you once the process has been completed successfully.