Set Up a Branch in Vietnam
One of these business forms is the branch office. Similar to a Singapore branch office, this type of structure allows a foreign company to have an office in Vietnam through which it carries out the same activities as in its home country. Our Vietnam company formation specialists can offer information on the business forms available for foreign companies interested in operating in this country.
You can also watch our video on how to create a branch office in Vietnam:
Requirements to open a branch office in Vietnam
It must be noted that the foreign company registering the branch office in Vietnam must comply with a few requirements, among which:
- it must be recognized by the directly interested authorities in its country of residence;
- it must have been trading on the local market for at least 5 years.
The structure of a branch office in Vietnam
The branch office will represent the foreign company on the Vietnamese market through various departments which can also be found in the parent company. The branch can have its own accounting, marketing, and human resources departments which will represent the parent company in front of the local authorities.
These departments must comply with the internal regulations imposed by the parent company; however, they must also respect the Vietnam laws.
Registering a branch office in Vietnam
In order to set up a branch, it is advisable for the foreign company to appoint a local agent who can complete the registration and licensing procedures. It is important to know that a Vietnam branch needs a special permit, called the establishment license.
Our company registration consultants in Vietnam can assist with the incorporation process of a branch office.
Documents needed to set up a branch in Vietnam
The foreign company must prepare the following documents upon the registration of a Vietnam branch office:
- a notarized copy of the parent company’s certificate of incorporation issued by the Trade Register in its home country;
- a notarized copy of the parent company’s statutory documents issued by the same Trade Register;
- a notarized copy of the last audited financial documents of the parent company;
- the Vietnam py of the last audited financial documents of the parent company.
The documents above must be filed with the Department of Industry and Trade together with:
- a notarized copy of the rental contract for the business address of the branch;
- a notarized copy of the local branch office representative’s passport;
- the incorporation documents of the branch office in original;
- a prescribed application form issued by the Ministry of Trade.
All documents sent by the foreign company must be translated into Vietnamese.
The manager of a branch in Vietnam
One of the requirements related to setting up a branch in this country is to appoint a branch manager who is a Vietnam resident. The branch manager will have the following responsibilities:
- will manage the day-to-day operations of the branch;
- will represent the branch in the relations with the Vietnamese authorities;
- will act as a contact point between the branch and the parent company.
The branch manager is also in charge with hiring employees for the company and must make sure that all the objectives of the branch are met.
Foreign companies can appoint a manager from their countries of origin, however, this employee must apply for a Vietnam work permit in order to be allowed to occupy this function.
Our Vietnam company registration advisors can offer information on how to apply for a work permit.
Activities which can be completed by a Vietnam branch office
Even if established by a foreign company, the branch office must comply with the requirements of the Vietnam Company Law. Under the local legislation a Vietnam branch is entitled to:
- conclude commercial contracts and other types of agreements on behalf of the parent company;
- sell and purchase goods or services on behalf of the parent company in Vietnam;
- all its activities must be conducted in accordance with the license it was issued;
- to hire Vietnamese employees or to bring employees from the parent company’s country of residence.
Our Vietnam company formation consultants can help foreign companies interested in applying for an establishment license when opening a branch office in this country.
Restrictions imposed on branches in Vietnam
It should be noted that not all types of foreign companies are allowed to open branch offices in Vietnam. Financial companies offering accounting services are not allowed to create branches in Vietnam. Also, credit rating agencies and commodities trading platforms cannot operate under branches in Vietnam.
Why open a branch office in Vietnam?
- to lease or rent office space and equipment which help them operate in Vietnam;
- to remit the profits to their home countries based on the Vietnamese legislation;
- to offer their services or sell their goods to Vietnamese customers;
- to open local bank accounts in the Vietnamese currency or other foreign currencies;
- to purchase goods and services from local suppliers in accordance with their business license.