- 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 the laws and regulations on tax management, anti-money laundering, foreign currency… since 2012, a representative office shall provide the cashbook, petty cash, bank statements of accounts, along with lawful invoices, employment records… to prove for its paid expenditures.
There will be tax final settlement or inspection on a representative office after every 3 – 5 years of its operation or in case of dissolution…
THE COMMON RISKS THAT YOU SHALL KEEP IN MINDS
- Paid expenditures without lawful invoices.
- Paid for the not allowed activities of an office.
- Paid for salary and allowances without lawful employee records.
- Receive incomes from resources other than the parent company.
- Using personal account for receiving / paying for the activities of the office.
- Improper cashbook and petty cash.
- Un-reasonable taxable incomes for the chief, expats and management position.
- Violation in calculation of personal income tax, compulsory insurances…
- Violation in preparing and summiting quarterly, annually tax reports.
- Violation and conflict data in the annual operation reports.
SOLUTIONS THAT YOU CAN AVOID AND PREVENT THE RISKS IN ADVANCE
- Manage the required compliance tasks in form of a checklist.
- Manage required business records that prove for the done compliance tasks.
- Annual internal audit for the required business records and compliance procedures.
- Do tax planning for your office and management positions.
- Manage any tax settlement or inspection in professional manner.
ABOUT VIVA BUSINESS CONSULTING
VIVA is the local experts for local business compliance procedures, has been trusted by thousands of foreign investors, multinational companies from Europe, Japan, Singapore, India, Korea, USA… regard to market entry service, required business compliance procedures by local laws and regulations since 2006.
Thanks for consistent of practice expertise in Business laws - Employment relations – Tax and accounting – Corporate finance – Corporate services, VIVA has been successfully providing service for thousands of leading companies from Japan, US, EU, Singapore, India, China, Korea…. in such industries: Garment, ennergy, pharma, advertising, agricultural…
VIVA keeps its service signature by offering one-stop business platform with exclusive and tailored-made services related to market entry and 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.
- Taxable incomes from wages and remunerations
- Foreign employees: personal taxable income – methods of declaration
- Annual operation reports for foreign representative offices
- Risk management on representative office operation in Vietnam
- Open bank accounts of representative office in Vietnam
- Representative offices in Vietnam: Bank accounts
- Important notes on foreign representative office operation in Vietnam
- Foreign representative office: cashbook and lawful invoices for tax inspection
- Representative office vs subsidiary vs branch? How to transform business models in Vietnam
- How to closure a foreign representative office in Vietnam: tax final settlement and tax completion certificate