How to establish a representative office in Vietnam

A Representative Office (RO) is a popular and cost-effective entry option for companies looking to understand the Vietnamese market before committing to a larger investment. Often chosen by first-time entrants, this setup allows businesses to explore local opportunities with minimal financial risk. In this article, we’ll provide an overview of the steps required to establish an RO in Vietnam, including key considerations such as compliance, reporting requirements, and tax implications.

What is a foreign representative office in Vietnam?

A foreign representative office in Vietnam is a dependent entity that supports the business operations of its parent company. It can engage in activities such as establishing a local office, recruiting employees, managing and promoting business contracts, conducting market research, and more. Representative offices are commonly used by foreign investors for functions like product sourcing, quality control, and serving as a liaison between the head office and overseas operations.

Compared to branches or subsidiaries, representative offices are easier to establish as they do not engage in direct business activities (e.g., sales). This reduces the regulatory burden. The setup is simple and cost-effective, with no requirements for investment capital, Value Added Tax (VAT), Corporate Income Tax, accounting, financial statements, or independent audits. Additionally, representative offices are flexible, with straightforward procedures for extension, termination, or dissolution when needed.

==> See more: Accounting services

Permitted activities of foreign representative offices in Vietnam

Representative offices of foreign enterprises in Vietnam are authorized to perform the following activities:

• Serve as communication hubs for the parent company.
• Conduct market research.
• Facilitate investment projects for foreign enterprises.
• Oversee and monitor the implementation of projects in Vietnam funded by foreign enterprises.

Conditions for obtaining a license to set up a representative office in Vietnam

• The foreign investor must be incorporated and registered to do business in accordance with the laws of the country or territory that is a party to treaties to which Vietnam is a signatory, or is recognized by such countries or territories.
• The foreign investor must have been in operation for at least one year from the date of establishment or registration.
• The investor’s Certificate of Business Registration, or an equivalent document, must remain valid for at least one year from the date of the application submission.
• The scope of operations of the representative office must align with Vietnam’s commitments under international treaties. If the scope of the office’s activities does not align with these commitments, or if the foreign investor is not based in a country that is a party to these treaties, the establishment of the representative office can only proceed with the approval of the relevant Ministers or Heads of ministerial agencies.

==> See more: company establishment 

Steps to register a representative office in Vietnam

Establishing a Representative Office (RO) in Vietnam involves the following key steps:

Step 1: Document preparation (Up to 3 Weeks)
To begin, the following documents need to be arranged:

• Lease agreement: A signed lease (or pre-lease) agreement for the location where the RO will be registered.
• Legal identification: A legalized passport or notarized ID card of the Chief Representative.
• Parent company documentation: Notarized or legalized documents from the parent company, including audited financial statements, are required for the application.

Step 2: Registration of representative office certificate (Up to 4 Weeks)
The application is submitted to the Department of Industry & Trade or the Management Boards of industrial parks or other special zones for approval.

Step 3: Post-licensing registrations (Up to 2 Weeks)
After receiving the necessary licenses and certificates, businesses must complete several post-licensing procedures, including:

• Obtaining stamps/seals
• Registering for taxes
• Paying business license fees
• Opening a bank account
• Registering labor-related matters

==> See more: Company registration

Post-Licensing Checklist for Setting Up an RO

Make a Seal:

• RO establishment license
• Chief Representative’s passport/ID card

Register Tax Code:

• Tax code registration form
• Power of attorney
• Seal registration certificate
• RO establishment certificate

Open a Bank Account:

• RO establishment license
• Seal registration certificate
• Tax code registration certificate
• Authorized signatory letter
• Additional bank documents

Announce RO Establishment: Public announcement of the RO setup.

Why is Informly the leading service provider for representative offices in Vietnam?

• Informly is a professional consulting firm, specializing in providing legal compliance and business support services. We are trusted by thousands of prestigious clients thanks to our deep understanding and solid foundation in the fields of: Business Law, Accounting and Corporate Finance, Tax Management, Labor Relations and Payroll.
• With the goal of building trust in the business community, Informly has become a reputable brand that businesses can trust in any local business compliance process. We have successfully supported thousands of leading companies from countries such as Hong Kong, Japan, the United States, the EU, Singapore, India, China, Korea… including FDI companies, foreign representative offices, foreigners working in Vietnam, Vietnamese small and medium enterprises, and executives.
• With core values ​​of continuous improvement, in-depth understanding of Vietnamese business culture and regulations, and exclusive services, we are committed to providing comprehensive and legal solutions to optimize all your business activities in Vietnam.

If you have any questions or concerns regarding legal issues or the procedures required to establish a representative office in Vietnam, please contact Informly at 090 739 2969.

FQA?