Important Notes on Foreign Representative Office Operation in Vietnam

Important notes on foreign representative office operation in Viet Nam

Important Notes on Foreign Representative Office Operation in Vietnam

Important Notes on Foreign Representative Office Operation in Vietnam

Important Notes on Foreign Representative Office Operation in Vietnam

 

Managing compliance procedures for representative office operation of foreign businesses, especially procedures such as labor relations management, insurance, personal income tax, invoices, income statement, license adjustment/ extension and annual report, etc, is an important task that should be closely monitored from the beginning & continuously during the operation. This article updates some important notes for representative office activities along with the latest penalties, as well as how to overcome and prevent them.

Notes on cases when the license of representative office must be amended

A foreign business must carry out the procedures for adjusting its representative office’s license in the following cases:

  • Change of the name or address of the foreign business (parent company).
  • Change of the head of the representative office.
  • Change the name of the Representative Office.
  • Change of the activities of the Representative Office.
  • Change of the address of the representative office in a province or city under central authority or in a geographical area under the management of a management unit.

Adjustment period: within 60 working days from the date of change, adjustment procedures must be carried out

*Penalties for violations: From VND 20,000,000 to VND 40,000,000.

Within 10 (ten) days from the date of change in information included in the License, the Representative Office must notify the tax authority of the changes.

*Penalties for violations: From VND 700,000 to VND 2,000,000.

Notes on Procedures for License Renewal of representative office operation

A foreign business may extend its licenses of representative office upon expiry of the time limit specified in its license.

Renewal time: At least 30 days before the expiry of the License.

*Penalties for violations: From VND 60,000,000 to VND 100,000,000.

Notes on annual reports in management of representative office operation

Before January 30 every year, representative offices must send reports in the form set out by the Ministry of Industry and Trade on their operations in the preceding year to the permit issuers.

Representative offices are obliged to report on the operations, supply documents or explain matters related to their operations at the request of competent state authorities.

In addition, representative offices need to collect valid invoices and make cashbooks for tax final settlement in the following years, especially in the procedures for dissolution.

Representative offices must actively manage foreign workers, register and extend work permits and temporary resident cards and cancel permits for their employees who have left the offices or when the offices are dissolved.

*Penalties for violations: From VND 20,000,000 to VND 40,000,000.

Failure to properly adhere to the basic regulations on representative office operation will lead to many potential risks later on. The heads of representative offices or parent companies can be completely assured about the management of licenses and compliance procedures of representative offices with the support of prestigious local consulting companies. Service packages include direct telephone or email consultation. Tailor-made packages are provided according to the scope and requirements of each client, on a case-by-case basis, including such services as risk review and remediation, completion of documentation systems, fulfillment of emerging requirements and application of new regulation in a cost-optimized manner.

 

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.

 

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Summary
Important Notes on Foreign Representative Office Operation in Viet Nam
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Important Notes on Foreign Representative Office Operation in Viet Nam
Description
Representative office operation management in Vietnam is an important task. Failure to properly adhere to the basic regulations will lead to many risks...
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VIVA Business Consulting
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