FOREIGN REPRESENTATIVE OFFICE IN VIET NAM

WHAT IS A FOREIGN REPRESENTATIVE OFFICE IN VIETNAM?

The foreign representative office in Viet Nam 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.

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ALLOWED ACTIVITIES OF FOREIGN REPRESENTATIVE OFFICES

Vietnam-based representative offices of foreign enterprises can conduct these activities:

  1. Act as a bureau of communication.
  2. Market research.
  3. Facilitate investment projects of foreign enterprises.
  4. Expedite and monitor the implementation of projects in Vietnam, which are sponsored by foreign enterprises.
  5. Representative offices of foreign enterprises in Vietnam shall not carry out business activities in Vietnam.

MORE ADVANTAGES OF FOREIGN REPRESENTATIVE OFFICES?

  1. No investment capital required.
  2. No Value Added Tax, no Corporate Income Tax, no Accounting, no financial statements, no independent audit required.
  3. Easy to extend, terminate or dissolve when necessary.
  4. Allowed to recruit local and foreign employees.
  5. 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.
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HOW TO ESTABLISH A FOREIGN REPRESENTATIVE OFFICE IN VIETNAM?

  1. How to prepare required papers and documents – Procedures – Cases and situations shall be anticipated in advance when setting up a foreign representative office in Vietnam.
  2. Annually budgeting for establishing – operating – maintaining a foreign representative office in Vietnam.
  3. Any query about local laws and regulations, direct consultation with the top experts on the establishment and operation of foreign representative offices in Vietnam.

04 STEPS TO ESTABLISH A REPRESENTATIVE OFFICE

  • Step 1: Understand scopes of activities, rights, obligations, conditions, and procedures for establishing a foreign representative office
  • Step 2: Prepare and complete the required conditions, papers, and dossiers

Establishing a foreign representative office is the optimal option for local customer care, market research, without having to invest capital or pay corporate income taxes. Establishing a foreign representative office shall be executed by professionals only and usually consist of 04 main steps:

  • Step 3: Apply and manage procedures for granting of representative office license
  • Step 4: Complete the initial compliance procedures after granting representative office license.

Beyond standard required procedures by laws, our tailored service will help to identify the risks in advance, prevent the risks happen, optimize establishment and also operation costs in years ahead.

REQUIRED COMPLIANCE PROCEDURES FOR REPRESENTATIVE OFFICES OPERATIONS IN VIETNAM

Based on local laws and regulations, there are important required compliance procedures that you shall keep in mind:

  1. Business record management: Standard folders |Daily records | Scan into solf files | Records completion…
  2. Manage the labor relations: Employee profile | Labor contract | Payrolls | Compulsory insurances  | PIT
  3. Tax management and Accounting: Bank statements | Cashbook | Petty cash | Complete the reports and risk management
  4. Expat management: Employee profile | WP | TRC | PIT
  5. Office license and other secretary services: Office license | Electronic signature | Amending and adjusting the license | contracts | documentations…
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TYPICAL RISKS IN MANAGING FOREIGN REPRESENTATIVE OFFICES OPERATING IN VIETNAM

Most of foreign representative offices in Vietnam have been facing the same risks due to typical violations with local laws and regulations, especially:

  1. Fail to adjust, extend licenses, annual operating reports on time.
  2. Violations in labor registration, compulsory insurances.
  3. Violations in the declaration and finalization of personal income tax.
  4. Violations of work permit, temporary residence card, certificate of tax obligation completion
  5. Do not collect and keep required business records, do not prepare standard accounting reports of incomes and paid
  6. Receiving incomes from a third party other than from headquarter, paying for activities that are not in line with allowed activities of the office.
  7. Failure to update and apply new laws and regulations, in-experience in managing and settlement for queries and requirements from the competent state agencies.
  8. Failure to manage disputes in labor relations.
  9. Missing collaboration and reports to the head office.

Risks management of foreign representative offices operating in Vietnam is a professional’s job that requires consistent and integrated expertise of local business laws and regulations…

Properly managing when operating foreign representative offices in Vietnam not only helps your team focus well on the competitive business activities from the parent company but also avoids legal risks, cost-saving, competitive advantage.

HOW TO DISSOLVE A FOREIGN REPRESENTATIVE OFFICE IN VIETNAM?

Basically, the dissolution procedure will go through 03 stages:

  1. Carrying out legal procedures for the official announcement of dissolution to the competent state agencies to terminate any further obligations that may arise from the date of dissolution.
  2. Collecting, reviewing and completing the required business records according to current laws and regulations, ready to provide to the Tax, Labor…departments, clearing any payment obligations to the third parties, especially procedures for liquidation of labor contracts, completion of obligations to state agencies such as Tax, Insurance …
  3. After granting certifications of debt obligations completion with third parties, the office will close the bank account, return the license, and return the seal.

VIVA can support you for dissolution process:

  • How to prepare required papers and documents – Procedures – Cases and situations shall be anticipated in advance when dissolution of a foreign representative office in Vietnam.
  • How to estimate budget for dissolution of a foreign representative office in Vietnam.
  • Potential risks shall be identified and managed in advance when dissolution of a foreign representative office in Vietnam.
  • Any query about local laws and regulations, direct consultation with the top experts on the establishment and operation of foreign representative offices in Vietnam.
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Having been providing service for foreign representative offices in Vietnam since 2006, VIVA is proud to be the top consultant for foreign representative offices in Vietnam, we manage and take full responsibilities for all compliance procedures to dissolve a foreign representative office in Vietnam, in the tailored and optimally manner, with fixed budget, fixed results, fixed timelines.

When dissolving a foreign representative office, VIVA also provides free of charge procedures to transfer all assets and employees from the representative office to its subsidiary company.

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WHY VIVA IS THE LEADING PLAYER IN SERVICE FOR REPRESENTATIVE OFFICE IN VIETNAM?

  1. VIVA 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.
  2. 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.
  3. 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.
  4. 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.

As the leading consulting firm in Vietnam that specializes in representative office, we provide comprehensive and fully packaged services related to foreign representative offices in Viet Nam:

  1. Establishment of a representative office.
  2. Annually standard cost of maintaining a representative office in Vietnam.
  3. Basic rights and obligations of representative offices in Vietnam.
  4. Compliance procedures during the operation period.
  5. Rights and obligations of the chief of representative office.
  6. Managing compliance procedures for expats who are working in Vietnam.
  7. Closure of a representative office risks management.
  8. Differences between a representative office and foreign-invested company.
  9. How to transform a representative office into a subsidiary.
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