- 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.
WHAT IS A FOREIGN REPRESENTATIVE OFFICE 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.
The representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual “business” (e.g. sales) and therefore there is less incentive for them to be regulated. The representative office is quite simple and cost-effective: No investment capital, no Value Added Tax, no Corporate Income Tax, no Accounting, no Financial statements, no independent audit required … and easy to extend, terminate or dissolve when necessary.
ALLOWED ACTIVITIES OF FOREIGN REPRESENTATIVE OFFICES
Vietnam-based representative offices of foreign enterprises can conduct these activities:
- Act as a bureau of communication.
- Market research.
- Facilitate investment projects of foreign enterprises.
- Expedite and monitor the implementation of projects in Vietnam, which are sponsored by foreign enterprises.
- Representative offices of foreign enterprises in Vietnam shall not carry out business activities in Vietnam.
MORE ADVANTAGES OF FOREIGN REPRESENTATIVE OFFICES?
- 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 Viet Nam, there is no limit in number of foreign employees for a representative office. In case the office can prove its demand fair with commercial operations, the office entitles 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.
CONDITIONS FOR BEING GRANTED LICENSES TO SET UP REPRESENTATIVE OFFICES IN VIETNAM
- The foreign investor is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories.
- The foreign investor has come into operation for at least 01 year from the date of establishment or registration.
- The Certificate of Business Registration or the equivalent document is valid for at least 01 more year from the date of submission of the application.
- The scope of operation of the representative office is consistent with that in Vietnam’s Commitments to treaties to which Vietnam is a signatory. Where the scope of operation of the representative office is inconsistent with Vietnam’s Commitments or the foreign investor is not located in the country or territory being party to treaties to which Vietnam is a signatory, the representative office can be established only if relevant Ministers, Heads of ministerial agencies have given approval for establishment of the representative office.
THE REQUIRED COMPLIANCE PROCEDURES THAT YOU SHALL KEEP IN MIND
Although a representative can enhance and support business for parent company in Viet Nam, easy to manage and able to keep investor away from many required compliance procedures… but, in fact that there are many representative offices have endured serious fines due to violations of compliance requirements.
There are important required compliance procedures that a representative office shall comply in Vietnam:
- Establishment/registration representative office.
- Bank accounts.
- Labor contracts – employment – payroll & compulsory insurances.
- Cashbook & petty cash.
- Personal income tax.
- Annual operation report.
- Extension of the office license.
- Rights, obligations and compliance requirements on the chief.
- Compliance procedures for expatriates who are working in Viet Nam.
- Dissolution of the representative office.
- Transform the representative office into subsidiary / 100% FDI company.
WHY VIVA IS THE LEADING PLAYER IN SERVICE FOR REPRESENTATIVE OFFICE IN VIETNAM?
- VIVA BCS 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.
- Became the trusted brand name since 2006, where the entrepreneurs can rely on for any local business compliance procedures. 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, Foreigners working in Vietnam, Vietnamese SMEs, Chief Operation Officers..
- Motivated by our core values of ceaseless improvement, our great insights in local business culture and regulations, as well as the exclusive services, promise to offer you one-stop and tailored-made solutions that optimize every of your business in Vietnam in the lawful manner.
ABOUT VIVA BUSINESS CONSULTING
VIVA is the local expertise for local business compliance procedures, has been trusted by thousands of foreign investors, multinational companies from Europe, Japan, Singapore, India, Korea, USA… for the 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 in such industries: Garment, energy, pharma, advertising, agricultural…
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.
- Representative office in Vietnam: What you need to know
- Representative office in Vietnam: How to setting up?
- Representative office in Vietnam: Conditions and required papers for setting up
- Representative office in Vietnam: Typical rights and obligations
- Representative office in Vietnam: Manage 08 compliance procedures
- Representative office in Vietnam: Open bank accounts
- Representative office in Vietnam: Annual budget and running cost
- Representative office in Vietnam: Manage tax declaration and settlement
- Representative office in Vietnam: Business records management
- Representative office in Vietnam: Annual operation report
- Representative office in Vietnam: Risk management on operation
- Representative office in Vietnam: Managing labor relations for foreigners
- Representative office in Vietnam: Managing and recruiting Vietnamese employees
- Representative office in Vietnam: Chief of representative office or head of branch – role and responsibility
- Representative office in Vietnam: Cash book and petty cash for tax inspection
- Representative office in Vietnam: Cases of re-grant of licenses
- Manage the mandatory compliance procedures for doing business in Vietnam