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.
The foreign representative office in Vietnam is a dependent unit supporting business operations of the parent company, which is allowed to do basic business activities such as open a resident office, recruit employees, manage and promote local business contracts, market research., etc. Representative Offices tend to be utilized by foreign investors in fields such as sourcing of products, quality control, and general liaison activities between the Head Office and the Representative Offices overseas. Some reasons that representative office is a preferred option when doing business in Vietnam:
- No investment capital required.
- No Value Added Tax, no Corporate Income Tax, no Accounting, no Financial statements, no independent audit required.
- Easy to extend, terminate or dissolve when necessary.
- Allowed to recruit local and foreign employees.
- Based on new Labor law in Vietnam, there are no limit in number of foreign employees for representative office. In case the office can prove its demand fair with commercial operations, the office entitle to determine the demand for foreign workers for every job position for which Vietnamese workers are underqualified and request for acceptance from the local competent state agencies for work permits.
Despite of the advantages, representative offices are not allowed for actual “business” such as sales and profitabe activities and has to strictly complied with the local regulations and procedures. In fact, many representative offices have been paying for expensive lessons due to un intentional violations.
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VIVA keeps its signature by offering one-stop business platform with regard to market entry and the mandatory business compliances. We ensure for our client’s good standing, in lawful and optimal manners whenever they are working and doing business in Vietnam.
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