Based on Clause 7, Article 3 of the Commercial Law 2005, a branch of a foreign trader in Vietnam is a dependent unit of the foreign trader, established and operating commercially in Vietnam in accordance with Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a member. Foreign enterprises wishing to open additional branches to conduct business in Vietnam must meet the conditions prescribed by Vietnamese law.The service of establishing a branch of a foreign trader is a service in which VinaSC Group will consult and carry out procedures to establish a branch in Vietnam of a foreign trader in accordance with the law, ensuring speed, convenience, and legal safety, limiting risks when foreign traders operate in Vietnam.
- Service Provision Process At Vinasc
- Specific Results
- Estimated Implementation Time
- Detailed Instructions
- Other Regulations
I. SERVICE PROVISION PROCESS AT VINASC:
Step 1: VINASC receives information about the planned branch
- With basic information, including: Information of foreign traders, proposed branch name, information of the head of the branch, registered address of the branch, field of activity – work to be carried out.
(See detailed instructions below)
Step 2: Prepare the branch establishment dossier
- The two parties discuss and agree on the content of the service, then Vinasc bases on them to prepare the necessary documents to hand over to the business for authentication.
- Vinasc receives the complete authenticated dossier along with the documents that the business needs to prepare to complete the dossier.
Step 3: Submit the application for a Branch Establishment License
- VINASC submits an application for a Branch Establishment License of a foreign trader at the Department of Industry and Trade;
- Implementation time: Within 30-45 working days from the date of submission.
- Result: Branch Establishment License of a foreign trader
Step 4: Track the processing of documents
- VINASC monitors the dossier processing process step by step and reports the progress to the business as requested. In case of need to modify, supplement information, documents, Vinasc is responsible for completing it as soon as possible to limit work interruption.
Step 5: Make a branch seal
- Implementation time: Within 01-02 working days
- Result: Branch seal
Step 6: Complete the service & Deliver the results to the client
- Review all the steps of the service implementation to ensure that the service has been completed comprehensively
- Transfer to the business the specific results that Vinasc collects on behalf of the business during the service provision process.
Step 7: Post-establishment procedures*
- *After obtaining the Branch Establishment License for a foreign trader, the company needs to carry out the following post-establishment procedures (These procedures are not included in the service of establishing a branch of a foreign trader ; Vinasc will provide consultation and quote for implementation to the investor):
- Hang a signboard at the branch office
- Open a bank account
- Register a digital signature
- Prepare tax declaration documents and pay taxes and fees as required
- Register and notify the use of electronic invoices
- Submit reports to the relevant authorities: branch operation reports, labor usage reports, etc.
II. SPECIFIC RESULTS
- Branch Establishment License for foreign traders
- Branch Seal
III. ESTIMATED IMPLEMENTATION TIME
- Applying for a Branch Establishment License for foreign traders: 30-45 working days The estimated time is calculated from the date Vinasc receives the complete dossier as requested from
In addition, depending on the needs of customers, VinaSC often advises and supports investors to control well the contents related to the above services such as: tax-accounting, labor, social insurance, salary, sub-licenses… fully and ensure compliance with the law in Vietnam that you can refer to.
Please contact VinaSC for the best advice and support for the above services.
IV. DETAILED INSTRUCTIONS
- Information of the foreign trader
Vinasc needs to know the following basic information about the foreign trader, including:
– Name of the foreign trader;
– Information about the Establishment License;
– Remaining validity period of the license;
– Business line;
– Charter capital;
– Bank account number;
– Head office address;
– Phone number; Email; Website.
- Expected branch name (Vietnamese name, English name, abbreviation if any):
– The branch name must be written using Vietnamese alphabet characters, the letters F, J, Z, W, digits, and symbols.
– The branch name must include the business name followed by the phrase “Branch”.
– The branch name must be displayed or attached at the branch. The branch name should be printed or written in smaller fonts compared to the Vietnamese name of the enterprise on transaction documents, files, and publications issued by the branch.
– The branch name must not be identical or cause confusion with the names of previously established Company branches.
- Information about the person in charge of the branch:
You can submit a copy of one of the following legal documents for us to prepare the dossier: Identification documents of the individual in charge of the branch (ID card, Citizen Identification Card, Passport).
Note: During the process of preparing the documents, Vinasc will also need you to prepare and provide notarized copies of the above documents (you can refer to the list of required documents below). For documents issued by foreign authorities, they must be certified or legalized by the diplomatic or consular representative offices of Vietnam abroad; translated into Vietnamese and authenticated in accordance with Vietnamese law.
We will send you the sample documents and guide you through this procedure.
- Registered address of the branch:
– Must have a registered address of the branch that is clearly defined and not located in a residential condominium.
Note: To be considered valid, the registered business address must be supported by the following legal documents: Lease Agreement (A legally binding contract between the company and the owner of the premises, outlining the terms and conditions of the lease.); Purpose of Use Certificate (A document issued by the project developer (if applicable), confirming that the premises are designated for commercial use and not for residential purposes.)
– The branch is not allowed to lend or sublease the address.
- Intended business line:
The industry and business line of the branch must align with the industry and business line of the enterprise.
Vinasc will review specific legal requirements related to the service and develop a plan for its implementation.
*CONDITIONS FOR ESTABLISHMENT OF BRANCH OF FOREIGN TRADER
A foreign trader is granted a License to establish a Branch when meeting the following conditions:
– Being established and registered for business operations in accordance with the regulations of the national law, the territory participating in international agreements of which Vietnam is a member or recognized by the laws of these countries or territories.
– The foreign trader has been in operation for at least 05 years, counting from the date of establishment or registration.
– In case the Business Registration Certificate or equivalent documents of the foreign trader specify the operating period, that period must be at least 01 year from the date of submission of the dossier.
– The activities of the Branch must be in line with the market opening commitments of Vietnam in international agreements of which Vietnam is a member and in line with the business sectors of the foreign trader.
– In cases where the activities of the Branch are not in line with Vietnam’s commitments or the foreign trader is not from a country or territory participating in international agreements of which Vietnam is a member, the establishment of the Branch must be approved by the Minister of the specialized management agency.
A foreign trader is not allowed to establish more than one Branch with the same name within the scope of a province or municipal city.
*Comprehensive List of Required Documents
| No. | Required documents | Implementer | ||
| Customer
(1) |
Vinasc Group (2) | Vinasc Group handles on behalf of our client (3) | ||
| 1 | Notarized copies of ID card/Personal ID/Passport of the person in charge of the Branch | X | X | |
| 2 | Notarized and legalized translation of the business registration certificate or equivalent document of the foreign trader. | X | X | |
| 3 | Notarized and legalized translation of the audited financial report or document confirming the fulfillment of tax or financial obligations in the most recent financial year, or equivalent document issued or certified by the competent authority in the jurisdiction where the foreign trader is established, demonstrating the existence and activities of the foreign trader in the most recent financial year. | X | X | |
| 4 | Documentation regarding the planned location for the branch office:
A certified copy of the lease agreement/rental contract for the premises or a certified copy of the document proving the right to exploit and use the location for establishing the branch office, or any other relevant documents… |
X | X | |
| 5 | Application for obtaining a branch establishment license:
– Request letter for issuing the branch establishment license; – Certified copy of the enterprise registration certificate or equivalent document of the foreign trader; – Document appointing/nominating the head of the branch by the foreign trader; – Bylaws/Articles of operation for the branch; |
X | ||
| 6 | Branch Seal | X | ||
| 7 | Application for Opening a Bank Account:
1. Bank Account Opening Request 2. Commitment Letter 3. Electronic Tax Filing Service Registration 4. Agreement Letter (if applicable) |
X | ||
(*) According to the procedure, customers are obligated to complete the documents in column (1), and Vinasc is responsible for completing the documents in column (2).
(*) In some cases where customers have difficulties in preparing the documents, Vinasc can complete the documents in column (3) on their behalf. However, in such situations, we will consider each specific case, and the following issues may arise:
- Additional costs for document preparation (these costs will vary depending on the state agencies and the different legal regulations in Vietnam at different times).
- Additional time required to prepare these documents.
(*) During the preparation period, customers should scan all the aforementioned documents so that we can prepare the documents in a timely manner.
(*) In some special situations, state agencies may request additional information to supplement the documents.
V. OTHER REGULATIONS
- Penalties for Operating Without Registering a Branch
According to Article 54 of Decree 122/2021/ND-CP, “a fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for conducting business at a location without notifying the business registration authority where the enterprise (in the case of a business location under the enterprise) or the branch (in the case of a business location under the branch) operates. If there is a violation of tax laws, it will be handled in accordance with the regulations on administrative penalties in the field of taxation.”
Therefore, if a branch operates without registration, it will be penalized as stated above and will be required to register with the Business Registration Office to establish the branch in order to rectify the violation.
- Reporting Obligations of Foreign Merchant Branches in Vietnam
- By January 30th each year, submit a report according to the Ministry of Industry and Trade’s template on the previous year’s activities by mail to the licensing authority.
- Report, provide documents, or explain matters related to their activities as requested by the competent state management agencies.
- Head of the Branch
- Responsible to the foreign merchant for their activities and those of the branch within the scope authorized by the foreign merchant.
- Responsible for their activities in cases where they perform activities outside the scope authorized by the foreign merchant.
- If the head of the branch is not present in Vietnam for more than 30 days without authorizing another person to exercise their rights and obligations, the foreign merchant must appoint another person as the head of the branch.
- The head of a foreign merchant’s branch cannot concurrently hold the following positions:
- Head of the representative office of another foreign merchant.
- Head of the representative office of the same foreign merchant.
- Legal representative of an economic organization established under Vietnamese law.