03 Sep Annual Budget and Running Cost of Representative Office in Vietnam
Annual budget running cost of representative office in Vietnam
In fact, setting up a representative office in Vietnam can enhance and support a lot for the parent company’s business, such as managing effortlessly, saving cost and avoiding risky things from local compliance procedures. In this article, VIVA would like to share some information about the average running cost of representative office in Vietnam.
Vietnam-based representative office of a foreign investor means a dependent unit, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.
With a cost of representative office, foreign investors can set up a lawful office in Vietnam, recruit staff to manage and promote sale contracts with local busine ss partner, research and develop products, seeking opportunities for the purchase or sale of goods and provision of services… The expatriate employees who work for representative office can obtain work permit and two years multiple visa (temporary resident card) for themselves and their family in Vietnam.
Here is the list of key administration requirements of running cost of representative office in Vietnam for annually budgeting:
Compliance Procedures Cost (USD) Remark Establishment 1200 One-stop fee, one time payment Virtual office 800 Annual fee Tax - Accounting - Compulsory insurance and other secretary services 900 Annual fee, applied for less than 02 staffs Compulsory insurances 75 per / month / 01 local staff Compulsory insurances 50 per / month / 01 expat
In accordance with the Law on Social Insurance, which went into force in early 2018, the employers and employees have to contribute compulsory social insurance and trade union fee as follows:
The payers Social insurance Health insurance Unemployment insurance Trade Union fee Total Employee 8% 1.5% 1% 10.5% Employer 17.5% 3% 1% 2% 23.5%
Total: 34% on the salary and wages:
- for the employer: 23,5%
- for the employee: 10,5%
Read more: Manage Tax Declaration and Settlement for A Representative Office in Vietnam
The cap of the salary used as the basis for social insurance contribution is: 29.800.000VND. It means, in case the salary exceeds the cap, the maximum contribution amount will be: 34% x 29.800.000VND only.
Foreign workers in Vietnam with a work permit, or a practicing certificate or license also going have to contribute health insurance and social insurance. The basis for social insurance contribution will be broadened to include salaries, allowances and other supplementary amounts.
Besides the compulsory insurance, you shall declare and pay PIT 20% on local incomes for non-resident expats and pay progressive tax rates from 5% to 35% depending on income levels for resident expats and local employees. The representative only has to pay PIT.
VIVA has been an in-depth consultant on business compliance procedures in Vietnam since 2006, based on our professional - integrated background in Business laws - Accounting and corporate finance - Tax management - Labor relation and payroll – Business administration procedures. VIVA offers exclusive services in an integrated tailor-made, consist of 5 specialized-expertise platforms and the inheritance experience up to hundreds of years for every job. Our extensive expertise and management system that facilitates us to connect local resources and be ready to deliver exclusive solutions that exceed all standard limits and satisfy all expectations of our clients.
Read more:
Compliance procedures of representative office in Vietnam
Annual operation reports for foreign representative offices
The proactive management of wage labor compliance procedure 2020
Important notes on foreign representative office operation in Vietnam
Cashbook and petty cash for tax inspection of representative office in Vietnam
Manage tax declaration and settlement for a foreign representative office in Vietnam
