How to Establish Representative Office in Vietnam

Representative Office (RO) is one of the popular market entry methods for foreign investors in Vietnam. This type allows businesses to enter the Vietnamese market at a low cost. In this article, LTS will mention the definition of Representative Office, its advantages and how to set up a Representative Office in Vietnam. 

What is the Representative Office in Vietnam?

The representative office in Vietnam is a representative of the company in Vietnam. It is responsible for representing the company and its products and services to the local market. The representative office has several functions, including:

• Contact with the local market
• Representing the company in Vietnam and its products and services to the local consumers and businesses
• Responsibility for quality control of all product lines sent by the company to Vietnam
• Managing internal communication channels, including newsletter, social media, etc.

Advantages of Representative Offices

The representative office in Vietnam is an opportunity for international businesses to establish or expand their business in Vietnam. There are many advantages that come with the representative office in Vietnam, including:

• A large market, which is estimated to be the second largest economy of Southeast Asia and the fourth largest economy of Asia;
• A high level of trust among Vietnamese people, which is one of the reasons why many companies want to establish their representative office in Vietnam;
• A high level of transparency and openness among government officials, which makes it possible for foreign companies to do business with them without fear.

Representative offices are a part of the business process that should not be neglected. They are crucial in getting the best ROI from a company. They help to make sure that the company is performing at its best and to make sure that it is delivering what its customers expect.

What are Representative Offices allowed to do?

• RO is allowed to do certain things in a company’s internal documents. They have the power to approve documents and they can also reject them. However, they are not allowed to approve documents that are not up-to-date or that do not comply with company policies.
• Representative offices are the best way to identify your customers and target them with relevant offers and promotions. They can also be used to generate leads or refer prospects to other businesses in your network.
• Monitoring the implementation progress of investment projects of foreign enterprises in Vietnam.
• RO acts as a communications office and is not allowed to conduct business activities in Vietnam.
• Representative offices are dependent on the parent company and can not generate profits by themselves or enter into direct contracts. They are also not allowed to issue invoices and are considered a separate business unit within the parent company.

What are the conditions to be granted an RO establishment license?

According to the provisions of the Commercial Law of Vietnam, a company is only eligible to establish a representative office when it:

• is an international trading company or foreign business entity
• applies for a license to set up a representative office
• receives a seal bearing the name of the representative office
• has a legal establishment with a minimum operating period of one year
• has an efficient business operation
• is in a high demand market or sector in Vietnam

Required Documents to set up a RO in Vietnam

Here is a list of required documents to set up a representative office in Vietnam:

• Application of the Ministry of Industry and Trade signed by the representative of the foreign company
• Copy of the business license or business registration certificate of the parent company
• Appointment letter certified in Vietnamese
• Notarized copy of financial statement or financial certificate in Vietnamese
• Copy of rental agreement
• Copies of documents about the office location
• Certified and legalized copy of passport of the head of the representative (Vietnamese translation required)

What to do after you get the license to set up a Representative Offices?

Make a seal for the Representative Office

Required documents including: 

• Representative Office establishment license.
• Passport of Head of RO if foreigner or passport/ID card if Head of RO is Vietnamese.

Register for a tax code for RO

Required documents including: 

• Tax code registration declaration.
• Authorization letter.
• Certificate of seal registration
• RO registration certificate in Vietnam.

Open an RO bank account

• RO establishment license.
• Certificate of seal registration
• Tax code registration declaration.
• Authorization letter.

Notice on the establishment of RO of the Company

How long does it take to set up a Representative Office in Vietnam?

The process of setting up a Representative Office in Vietnam can be done in between six to eight weeks. The setup process for this option requires relatively few bureaucratic procedures. It is fairly simple to complete and involves minimal further paperwork during the initial stages of planning.

Applying the License for the RO	25 working days
Applying for the seal of RO	05 working days
Applying for the tax code of RO	05 working days
Publication of the RO’s establishment	05 days

Conclusion

With the sharing of this article, we hope you have a better understanding of what a Representative Office is, the function of a Representative Office as well as the conditions and procedures for establishing a Representative Office in Vietnam. Immediately contact LTS LAW for reputable and professional legal advice.