1. How many options for establishing a representative office in Vietnam?
► Unlike with many types of companies, Representative Offices (RO) have only one type in Vietnam.
2. What required documentation must a foreign trader provide?
► Basic documents required:
- Overseas legal entity license: Business registration certificate of the parent company or equivalent paper. Note:* Head office must be established at least one year in its country and the term of operation on the license must be at least 01 year from the date of application;
- Audited Financial Statement: Copy of the latest audited financial statements of parent company or certification of the situation of tax or financial obligations in the latest fiscal year or other equivalent papers issued by competent agencies or organizations of traders/investors which can certify the existence and operation of foreign traders in the latest fiscal year;
- Appointment letter: Appointment letter of Chief of RO;
- Chief of Rep.Office's documents: Copy of passport or identity card or (if being Vietnamese) of Chief of RO;
- Office leasing contract or equivalent paper: A copy of the memorandum of understanding or lease agreement or a copy of documents proving that the trader has the right to exploit and use the premises to locate the RO.
3. Are there geographic limitations to the area of operations?
► The law of Vietnam does not limit geographically to the market research and marketing activities of the RO.
4. How long is a license valid before it would be renewed?
► According to the provisions of law, the license to establish a RO of a foreign trader is valid for a maximum period of 5 years but does not exceed the time limit stated in the business registration license or equivalent document of the foreign trader (head office). At the end of the 5-year period, the foreign trader can extend the operation of the RO.
5. Is it necessary to have physical workspaces?
► According to the provisions of Vietnamese law, foreign traders can rent virtual offices or shared offices to serve as a located office.
6. Are there tax liabilities?
► The following are regulations on tax obligations of RO of foreign traders in Vietnam:
- Concerning personal income tax (PIT): the fact that the RO has the right to recruit Vietnamese or foreign workers to work in the office is the basis for the obligation to pay PIT. The RO is responsible for declaring, deducting tax from employee salaries, paying tax, and finalizing PIT for employees working at a foreign RO.
- Concerning corporate income tax (CIT): Under Vietnamese law, the RO serves as a liaison office, conducts market research, and promotes the holding company's business investment opportunities. Since this RO does not perform business functions, CIT is not incurred.
7. Are there tax liabilities related to the employment of staff (social and health insurance, income tax, etc.)?
► Financial obligations of a RO in Vietnam include:
- Personal income tax arising from income is wages, salaries, or any benefits amount for employees paid by the RO.
- Compulsory insurance including social insurance, health insurance, unemployment insurance is paid monthly by employees and employers.
8. Can expats be employed as chief representatives or regular employees?
► RO has the right to recruit foreign workers as chief representatives or employees. In order to work lawfully in Vietnam, expats, including the chief RO and employees, must apply for a work permit.
9. Do expats in the function of chief representative require a working permit?
► If so, what documents are required to obtain such a work permit? When hiring foreign staff in Vietnam, there are a number of procedures and legal frameworks. The documents necessary for a foreign worker in Vietnam, include:
- Visas for entering Vietnam;
- Work Permits for working in Vietnam;
- Temporary Residence Cards for staying in Vietnam.
10. What does RO need to do after getting the license?
► Post-licensing checklist for establishing a RO:
- Make a seal for the RO;
- Register a Tax code for RO;
- Open a bank account of RO;
- Announcement of the establishment of RO of Company.
♦To reduce risks in the process of implementing and saving time, please contact ESOS immediately for advice and implementation of procedures.
WHO WE ARE? & HOW ESOS CAN SUPPORT YOU?
The management team and consultants have many more years of experience and served in the field of human resource management for foreign representative offices, diplomatic organizations, and non-governmental organizations. Have extensive experience in handling cases related problems Work Permit, Social Security, tax settlement ...Along with this vast experience and devotion, Standards and Credits of the entire team ensures a perfect service for clients.