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8 Essential Steps to Set Up a Representative Office in Vietnam
While investors can easily find free information on how to establish a Representative Office in Vietnam, the abundance of conflicting advice can often lead to confusion.
To address this, thele.blog has prepared this article, outlining the 8 essential steps for setting up a Representative Office in Vietnam in detail. This guide has been compiled by Thanh Tran, who has handled over 50 applications for Representative Office setups in Vietnam each year. Thele.blog aims to eliminate any legal concerns or uncertainties investors may have regarding the process.
In summary, the 8 essential steps to set up a Representative Office in Vietnam are as follows:
- Step 1: Conduct Thorough Legal Research
- Step 2: Secure a Business Location
- Step 3: Appoint a Local Chief Representative
- Step 4: Prepare the Necessary Documentation
- Step 5: Register the Representative Office
- Step 6: Register a Company Seal (Red Stamp)
- Step 7: Obtain a Tax Identification Number (TIN)
- Step 8: Complete Post-Registration Procedures
8 Steps to Set Up a Representative Office in Vietnam
Let’s take a closer look at each step.
Step 1: Conduct Thorough Legal Research
Investors are often concerned about legal costs when seeking legal advice, which can lead them to skip this important step and begin setting up a Representative Office without proper legal guidance.
Fortunately, thele.blog offers a free 1-hour initial consultation to help investors clarify all the necessary details before making a decision. During this consultation, various important topics will be discussed, including but not limited to:
- Advantages of Establishing a Representative Office in Vietnam
- Vietnam’s legal framework for Representative Offices
- Alternative solutions if establishing a Representative Office is not feasible or necessary
- The role and functions of a Representative Office in Vietnam
- A detailed overview of the procedures for setting up a Representative Office in Vietnam
- The Requirements for the Local Chief Representative
By offering a clear roadmap of the necessary steps, investors can minimize the risks of setting up a Representative Office in Vietnam, avoiding higher costs or longer timelines than expected.
Thele.blog also provides practical solutions and takes proactive steps on behalf of investors. Everything we do is aimed at ensuring a smooth and efficient process for expanding their business in the beautiful, S-shaped country of Vietnam.
Step 2: Secure a Business Location
Once investors decide that establishing a Representative Office in Vietnam is the right choice, thele.blog can assist in securing a business location in prime commercial districts. We offer investors a list of trusted lessors we partner with or the option to register at thele.blog's office.
The advantage of working with thele.blog when setting up a Representative Office or any legal entity is that we own an affordable yet conveniently located building, allowing us to offer competitive prices to investors. This ultimately provides investors with a two-in-one benefit.
thele.blog’s building
Step 3: Appoint a Local Chief Representative
In most cases, investors come to us with individuals they believe are suitable for the role of local chief representative. This is the person (whether Vietnamese or foreign) appointed by the investors to oversee and manage the Representative Office in Vietnam.
At thele.blog, we are always ready to assist in overcoming any obstacles. If investors do not have a suitable candidate for the position, we are happy to provide a list of recommended candidates from our trusted partners or even assist in recruiting the right person on their behalf. Investors are then expected to interview the candidates they find most suitable for the position.
In any case, investors may find the following frequently-asked questions regarding the Local Chief Representative Office useful. Specifically:
What are responsibilities of the Local Chief Representative?
The Chief Representative is accountable to the foreign company for their own actions and those of the Representative Office, both within and beyond the scope of the authority granted by the foreign company.
What actions are prohibited for the Chief Representative?
There are several prohibited actions the Representative Office must avoid to remain compliant with Vietnamese law. Below are key prohibited actions:
Prohibited Action | Description |
Engaging in profit-making activities | No direct sales or service provision in Vietnam |
Signing commercial contracts | Contracts generating revenue are not allowed |
Acting beyond the registered scope | Must operate within the approved functions of the representative office |
Hiring employees without contracts | All staff must have formal labor contracts |
Violating reporting obligations | Must submit reports to authorities and notify changes |
Misusing the office seal | Seal must be used only for authorized purposes |
Violating tax and financial regulations | Must comply with PIT, social insurance, and tax reporting |
Operating without a valid license | The office must maintain a valid operational license |
Can the Local Chief Representative be a foreigner?
Yes.
If a foreign company appoints a foreigner to be the Chief Representative in Vietnam, the Vietnam Representative Office must apply for the Chief a Vietnam Work Permit for the job position of Manager, unless exempted.
In addition, the foreign Chief Representative may obtain a Vietnam Temporary Resident Card, which allows them to reside legally in Vietnam.
What if the Chief Representative leaves Vietnam?
When leaving Vietnam, the Chief Representative must issue written authorization to another individual to exercise their rights and obligations. This authorization requires the approval of the foreign company.
The Chief Representative remains responsible for the execution of the delegated rights and obligations.
Can investors authorize the Chief Representative to sign contracts?
Yes.
In cases where the Chief Representative is authorized by the foreign company to enter into, modify, or supplement contracts, the foreign company must issue written authorization for each such instance.
Can investors replace the Chief Representative?
Yes.
In the event that the Chief Representative is absent from Vietnam fore more than 30 days without delegating authority to another individual, or in the event of their death, disappearance, temporary detention, or imprisonment, or restriction of civil legal capacity, the foreign company must appoint a new Chief Representative.
Step 4: Prepare the Necessary Documentation
To complete the application, investors must provide the following documents:
Checklist of Documents Required to Set Up a Representative Office in Vietnam
Application for Representative Office Establishment License
Download Form MD-01 here.
A legalized Business Incorporation Certificate of the foreign company
An audited financial statement of the latest fiscal year of the foreign company
A letter of appointment for the Chief Representative
A certified true copy of passport/ID card of the Chief Representative
A lease agreement and legal document for the Representative Office’s headquarters
Step 5: Register the Representative Office
The foreign company must submit the application to establish an Representative Office to the Department of Industry and Trade. These procedures typically take from 7 to 14 business days to complete. If the application is referred to a managing ministry, approval may take up to 3 months.
A specimen Certificate of Representative Office Establishment in Vietnam
Step 6: Register for a Red Stamp
After receiving the Representative Office Certificate, the next step is for the Representative Office to register for a red stamp with the Police Department. The application includes:
Representative Office Certificate
Passport or Vietnamese Citizen ID of the Chief Representative
The red stamp will be ready after 4 business days from the date of submission of the application. Please note that the Chief Representative Office must personally visit the Police Department to collect the stamp and cannot authorize anyone else to pick it up on their behalf.
A specimen seal and certificate of the Representative Office
Step 7: Register for a tax identification number
The very last step is to apply for a tax identification number. This application must be submitted to the tax authorities within 10 business days from the date issuing the Representative Office Certificate.
The dossiers for this step includes:
Tax registration form
Notarized copy of the Representative Office Certificate
The tax identification number will be issued by the tax authority after 5 to 7 business days upon receipt of the proper application thereof.
Step 8: Post-Registration Management
Once the Representative Office is set up, and ready for operation, don't forget to complete a series of tasks to ensure its compliance with law.
Here’s below a notable checklist of tasks that a Representative Office in Vietnam needs to complete:
Affix and maintain a Representative Office’s sign in front of the office
The sign should indicate at least the representative office’s name.
Open a bank account for the Representative Office (optional)
This is to conduct financial transactions, such as receiving fund from the foreign company, making payments for office rent, salaries, office suppliers, equipment etc.,
Submit regular reports the Representative Office
The Representative Office must prepare and submit reports regarding activities throughout the year before January 30 of the following year.
File tax return
In case the Representative Office hires employees, the Representative is obliged to contribute to social insurance for employees, and settle personal income tax for those employees.
In cases, the Representative Office does not incur any salary expenses, its is not required to fulfill tax obligations.
Costs to Set up a Representative Office
Government fees amounting to VND3,440,000, comprising of (i) Representative Office fee – VND3,000,000; and (ii) Red Stamp fees – VND440,000.
In addition, rent and lawyers fees will also apply.
How does thele.blog assist investors with setting up a Representative Office?
As always, thele.blog takes pride in offering a complimentary initial consultation hour to assist investors. Those who visit us will not only have the opportunity to share their plans in detail and receive valuable legal advice at no cost but also enjoy a delightful cup of coffee freshly prepared by our staff.
So, what are you waiting for? Don’t hesitate to email us at hi@thele.blog or call us at 84-932 837 927 to book an appointment!
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