Danh mục nội dung
Vietnam-based representative office of a foreign investor means a dependent unit, a lawful office in Vietnam, allowed to recruit staff to manage and promote sale contracts with local business partners, research and develop products, seeking opportunities for the purchase or sale of goods and provision of services. A foreign representative office is a simple form of investment in Vietnam to enhance business from overseas, with multiple advantages while fewer risks regarding the required business compliance procedures such as investment capital, tax, accounting, and auditing. And it is easy to be extended or terminated or dissolved. The expatriate employees who work for representative office can obtain work permit and two years multiple visa (temporary residence card) for themselves and their family in Vietnam.
According to Circular 02/2019 effective from March 1, 2019, the provisions on the mandatory closure of bank accounts for non-juridical entities have been removed by the State Bank. This Circular simultaneously abrogates Circular No. 32/2016 and Circular No. 02/2018.
Formerly, March 1st of 2019 was the deadline for banks to coordinate with clients who are non-juridical entities such as foreign representative offices, households, co-operative groups, private enterprises, law offices to complete contracts for opening new bank accounts, payment accounts usage, or account termination. The purpose is to make the mandatory conversion to personal payment accounts.
OPENNING BANK ACCOUNTS FOR REPRESENTATIVE OFFICES AND NON-JURIDICAL ENTITIES
The Department of Examination of Legislation under the Ministry of Justice has issued a document stating that Circular No. 32/2016 stipulating that the subjects who can open payment accounts at banks include individuals and legal entities is illegal, restricts the rights of non-juridical entities prescribed by law, as well as restricts the rights of banks in opening payment accounts for non-juridical entities.
According to the provisions of the new Circular, organizations that can open payment accounts are no longer limited to a legal entity but also include other types of organizations that are non-juridical entities such as foreign representative offices, households, co-operative groups, private enterprises, law offices. However, the payment account holder of an organization under the new provisions in Circular 02 is an organization instead of a legal representative or representative authorized by the organization. The payment account holder is allowed to authorize others to use his/her payment account. Specifically, the foreign representative office must carry out the authorization procedure for using an account in Vietnam.
In addition, representative offices should especially note that it is only allowed to receive money from parent companies to pay for activities permitted in Vietnam in accordance with representative offices functions, as well as make accounting vouchers and books (cashbook & petty cash) to support the tax inspection for future years.
Read more:
- Bank accounts for foreign representative office in Vietnam
- Why foreign representative offices must open bank accounts in Vietnam?
- Representative offices in Vietnam: required to open the local bank accounts
- Annual budget and running cost of representative office in Vietnam
- Compliance procedures for license of foreign representative office in Vietnam
