Summary of "Establishing Representative Offices in Vietnam"
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Objective: The article provides insights on setting up a representative office in Vietnam, serving as a preliminary step for foreign investors interested in the Vietnamese market.
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Process of Establishing Representative Offices:
- Advantages: The simplest approach for initial market testing.
- Prohibited Activities: Cannot generate revenue, engage in direct business transactions, or sign contracts without a written power of attorney.
- Functionality: Acts as a liaison office for the parent company, facilitating market research, industry exploration, and contract execution post-signature.
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Required Documents:
- Certified copies of the parent company's incorporation or business registration certificate.
- Memorandum and articles of association or company charter.
- Audit report for the latest financial year.
- RO application letter and chief representative appointment letter (translated and certified).
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Application Procedures:
- Submit application to the Provincial Department of Industry and Trade.
- Publish operational notice in newspapers for three consecutive issues within 45 days.
- Proceed with seal creation, bank account opening, and work permit for expatriates.
- Chief representative personally obtains official seal for security reasons.
- Approval process typically takes 3-5 weeks.
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Employment and Hiring:
- No restrictions on hiring local and expatriate staff, subject to proper documentation.
- All expatriates, including the chief representative, require a work permit.
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Chief Representative Requirements:
- Can be local or expatriate, with restrictions on holding certain positions concurrently.
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Office Location:
- Avoid sub-leasing; consider Grade A buildings for modern facilities and centralized location.
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Tax Matters:
- Responsible for declaring employees' personal income tax.
- Exempt from corporate income tax but liable for 10% VAT on rendered goods and services.
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License Changes and Re-Issuance:
- For minor changes, submit documents to the provincial Department of Industry and Trade within 10 days.
- Apply for re-issuance when the RO's address changes, the foreign business's name or address changes, or the company's business scope alters.
This guide serves as a comprehensive overview for foreign companies considering establishing a presence in Vietnam through a representative office, outlining key steps, requirements, and considerations.
