Procedures On Establishment Branches of Foreign Traders In Vietnam

Vietnam-based branch of a foreign trader means a dependent unit of the foreign trader, which is established and conducts commercial activities in Vietnam under the provisions of Vietnamese law or treaties to which the Socialist Republic of Vietnam is a contracting party. So how is the procedure for establishing branches of a foreign trader in Vietnam under current regulations?

Under the provisions of Article 8 of Decree 07/2016/ND-CP, foreign traders shall be granted Licenses for Establishment of branches if they satisfy the following requirements: conditions:

– The foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;

–  The foreign trader has come into operation for at least 05 years from the date of establishment or registration;

–  The Certificate of Business registration or equivalent document is valid for at least 01 year from the date of submission of the application;

–  The scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign trader;

–  Where the businesses of the representative office are inconsistent with Vietnam’s Commitments or the foreign trader is not located in one of the countries or territories being parties to treaties to which Vietnam is a signatory, the representative office can be established only if they obtain the prior consent of the relevant Minister for establishment of the representative office.

Under the provisions of Article 9 of Decree 07/2016/ND-CP, the License for Establishment of a branch shall be valid for 05 years but not exceeding the remaining effective period of the Certificate of Business Registration or the equivalent (for documents having expiry date).

The effective period of an extended License for Establishment of the branch shall be equal to that of the current license.

The extension of the license or establishment of the branch shall comply with clause 1 hereof.

The Department of Industry and Trade of the province shall have the power to grant, re-grant, adjust, extend or revoke the License for Establishment of branches and shall have the power to have such branches shut down in case the establishment of such branches has not been prescribed by specialized legislative documents.

Under the provisions of Article 14 of Decree 07/2016/ND-CP, the licensing agency shall refuse to grant the License for Establishment of the branches to those that:

–  Fail to satisfy one of requirements stipulated in Article 8 (for applications for licenses or establishment of branches).

–  Apply for the license or establishment of the branch within 02 years from the date of revocation of the license or establishment of branch under Article 44 hereof;

–  Be subject to restrictions from the establishment of branches for reasons of national defense and security, social order, social ethics and community health.

–  Be restricted by provisions of laws.

–  An application form for license for establishment of the branch using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.

–  Copies of the Certificate of Business Registration or equivalent documents of the foreign trader

–  A letter of appointment of the head of the branch

–  Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established

–  Copies of the branch charter

–  Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch

–  Documents on the expected location of the branch including:

+  Copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the branch;

+  Copies of documents on the expected location of the branch under Article 28 of Decree 07/2016/ND-CP and provision of related laws.

Notes:

Documents issued or certified by competent foreign agencies must be consularly legalized according to the provisions of Vietnamese law and translated into Vietnamese; the translation and copy must be notarized according to the provisions of Vietnamese law.

Copies of documents issued or certified by Vietnamese competent authorities must be notarized in accordance with Vietnamese law.

Step 1: Sumit the application

The foreign trader shall submit their application to the licensing agency where the representative office is expected to be located directly or by post or online (where applicable).

Step 2: Review the application

–  The licensing agency shall examine such application and request the applicant to complete their application within 03 working days from the date of receipt of the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of such application.

–  Apart from those specified in clause 4 of Article 14 of Decree 07/2016/ND-CP, the licensing agency shall send the applicant a written notification of whether the license or establishment of the branch is granted or not within 07 working days from the date of receipt of the valid application. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

–  For those specified in clause 5 of Article 8 of Decree 07/2016/ND-CP and the establishment of branches that has not been prescribed by specialized legislative documents, the licensing agency shall submit a written request for directions to the relevant Ministry within 03 working days from the date of receipt of the valid application.

Within 05 working days from the date of receipt of the request for directions from the licensing agency, the relevant Ministry shall submit the licensing agency a written notification of whether or not they approve for the application for the License for Establishment of the branch.

Within 05 working days from the date of receipt of the notification from the relevant Ministry, the licensing agency shall send the applicant a written notice of whether the License for Establishment of the representative office is granted. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

• Law on Commerce 2005;
• Decree No. 07/2016/ND-CP detailed regulations on establishment of representative offices or branches of foreign traders in Vietnam under laws on commerce;
• Circular No. 11/2016/ND-CP on forms prescribed in Decree No. 07/2016/ND-CP dated January 25, 2016 of the Government on guidelines for the law on commerce in terms of representative offices and branches of foreign traders in Vietnam.