ANNUAL BUDGET AND RUNNING COST OF REPRESENTATIVE OFFICE IN VIETNAM

Representative office in Vietnam: Annual budget and running costs

ANNUAL BUDGET AND RUNNING COST OF REPRESENTATIVE OFFICE IN VIETNAM

(Last Updated On: July 23, 2021)
Representative office in Vietnam: Annual budget and running costs

Representative office in Vietnam: Annual budget and running costs

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 costs 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 costs of representative office in Vietnam for annually budgeting:

Compliance ProceduresCost (USD)Remark
Establishment1200One-stop fee, one time payment
Virtual office800Annual fee
Tax - Accounting - Compulsory insurance and other secretary services900Annual fee, applied for less than 02 staffs
Compulsory insurances75per / month / 01 local staff
Compulsory insurances50per / 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 payersSocial insuranceHealth insuranceUnemployment insuranceTrade Union feeTotal
Employee8%1.5%1%10.5%
Employer17.5%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.

 

WHO WE ARE

  • VIVA is a business consulting company, specializes in business compliance procedures according to local business laws and regulations since 2006. VIVA has been continuously trusted by thousands of well-known clients since 2006.
  • The insights and consistent backgrounds in Business Laws - Accounting and Corporate Finance - Tax Management – Labor Relations and Payroll - Secretarial services help us build trust and confidence in the entrepreneurs’ community.
  • We have been successfully providing service for thousands of leading companies from Hong Kong, Japan, US, EU, Singapore, India, China, Korea…. in forms of FDI companies, Foreign representative offices, Foreigner working in Vietnam, Vietnamese SMEs, Chief Operation Officers.
  • VIVA's logo is our Brand name, our signature, it states our faith - independence - transparence - and loyalty for client's interest. The signature is commitment and honor on our outstanding expertise and professionalism. It is the symbol of good standing for our clients whenever they are doing business with customers, partners, the local competent state agencies...

 

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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

Equirements for taking foreign loans applied to FDI companies – foreign loans subject to registration with the state bank



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