When establishing a branch of a foreign company in Vietnam, many foreign individuals and organizations do not understand Vietnamese legal regulations, so the establishment process is not very smooth. To easily establish a branch of a foreign company in Vietnam, how do individuals and organizations need to understand the regulations on establishing branches of foreign companies in Vietnam? If you are in need of establishing a foreign company branch in Vietnam, follow Viet My’s article below to better understand this issue.

1. Regulations on establishing branches of foreign companies

Pursuant to Clause 7, Article 3 of the 2005 Commercial Law, regulations on the establishment of foreign company branches in Vietnam are understood as dependent units of a foreign company, established and operating commercially in Vietnam. according to Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a member.

Regarding the right to establish branches of foreign companies in Vietnam, Article 3 of Decree 07/2016/ND-CP specifically stipulates as follows:

– Foreign companies are allowed to establish their branches in Vietnam according to Vietnam’s commitments in international treaties to which Vietnam is a member.

– A foreign company is not allowed to establish more than one branch with the same name within a province or centrally run city.

Regarding the obligations of foreign companies to the operation of their branches, under Article 4 of Decree 07/2016/ND-CP stipulated that the foreign company should be held responsible to Vietnamese law for the entire operation of its branches in Viet Nam.

2. Conditions for establishment of a Foreign Company Branch in Vietnam

According to Article 8 of Decree 07/2016/ND-CP, a foreign company is licensed to establish a Branch when it meets the following conditions:

– Foreign companies are established and registered in accordance with the laws of countries and territories participating in international treaties to which Vietnam is a member or recognized by the laws of these countries and territories;

– A foreign company has been operating for at least five years, from the date of its establishment or business registration;

– In the case of a company’s Business Registration Certificate or other documents equivalent to that of a foreign company for which the term of operation is stipulated, this period shall be at least 1 year from the date of filing;

– The contents of the subsidiary’s activities shall be in accordance with Viet Nam’s market opening commitments in international treaties to which Viet Nam is a party and must be in line with the foreign company’s business;

– If the contents of the subsidiary’s activities do not comply with the commitments of Viet Nam or foreign companies that do not belong to the international treaties to which Viet Nam is a member, the establishment of the subsidiary of the foreign subsidiary must obtain approval from the Minister of Industry.

3. Authority to issue License to establish branches of foreign companies

The authority to grant a License to establish a branch of a foreign company is specified in Article 6 of Decree 07/2016/ND-CP, the Ministry of Industry and Trade will issue, re-issue, adjust, extend and revoke the License. Establishment of branches of foreign companies and termination of operations of branches of foreign companies in cases where the establishment of branches of foreign companies has not been regulated in specialized legal documents.

4. Process for establishing a branch of a foreign company in Vietnam

The process and procedures for establishing a branch of a foreign company are carried out as follows:

4.1 Documents for establishing a branch of a foreign company in Vietnam

Documents for establishing a branch of a foreign company in Vietnam are specified in Article 12 of Decree 07/2016/ND-CP as follows:

* Documents have 01 set including:

– Application for issuance of a License to establish a branch of a foreign company according to the form of the Ministry of Industry and Trade signed by an authorized representative of the foreign company;

– Copy of Business Registration Certificate or other documents of equivalent value of the foreign company;

– Document of the foreign company appointing or appointing the head of the branch;

– A copy of the foreign company’s audited financial statement or written confirmation of the foreign company’s performance of tax obligations or financial obligations in the most recent fiscal year;

Or other documents of equivalent value issued or certified by the competent organization or agency where the foreign company was established to prove the existence and operations of the company in the most recent fiscal year;

– Copy of the Charter of operations of the foreign company’s branch;

– Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreigner) of the individual head of the branch of the foreign company outside;

– Documents on the location where the foreign company plans to locate its branch headquarters include:

+ A copy of the memorandum of understanding or a copy of the location rental agreement or a copy of the document proving that the foreign company has the right to exploit and use that location for the branch headquarters;

+ Copy of documents on the expected location of the foreign company’s branch according to the provisions of Article 28 of Decree 07/2016/ND-CP and relevant legal regulations.

* The following documents (in cases where a copy of the passport of the head of the Branch is a foreigner) must be translated into Vietnamese and authenticated according to Vietnamese law, including:

– Copy of Business Registration Certificate or other documents of equivalent value of the foreign company;

– Document of the foreign company appointing or appointing the head of the foreign company’s branch;

– A copy of the foreign company’s audited financial statement or written confirmation of the foreign company’s performance of tax obligations or financial obligations in the most recent fiscal year;

Or other documents of equivalent value issued or certified by the competent organization or agency where the foreign company was established to prove the existence and operations of the company in the most recent fiscal year;

– Copy of the Charter of operations of the foreign company’s branch;

– Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreigner) of the individual head of the branch of the foreign company outside;

* A copy of the Business Registration Certificate or other documents of equivalent value of the foreign company must be certified or consularly legalized by Vietnamese diplomatic missions or consulates abroad. according to Vietnamese law.

4.2 Procedures for establishing a branch of a foreign company in Vietnam

Procedures for establishing a branch of a foreign company in Vietnam according to Article 13 of Decree 07/2016/ND-CP are as follows:

– Foreign companies submit applications directly or by post or online (if eligible) to the Branch Establishment Licensing Agency.

– Within 03 working days from the date the competent authority receives the dossier, the agency issuing the license to establish a branch of a foreign company will conduct an inspection and make additional requests (if the dossier is incomplete and invalid). Requesting the company to supplement the dossier can be done at most once during the dossier processing process.

– Except for the cases specified in Clause 4, Article 13 of Decree 07/2016/ND-CP, within 07 working days from the date the competent authority receives all valid documents, the Authority will issue the Certificate Branch establishment license to grant or not to grant a Branch establishment license to a foreign company. In case of refusal to issue a License, there must be a document clearly stating the reason.

– In cases specified in Clause 5, Article 8 of Decree 07/2016/ND-CP and in cases where the establishment of a branch of a foreign company has not been specified in specialized legal documents, the Agency issuing the Establishment License The foreign company branch sends a document to get opinions from the specialized management ministry within 03 working days from the date of receipt of complete and valid documents.

Within 05 working days from the date of receipt of the document from the Agency granting the License to establish a branch of a foreign company, the specialized management ministry must issue a document clearly stating whether it agrees or disagrees. Granting Branch Establishment License.

Within 05 working days from the date of receipt of the document from the Ministry of specialized management, the Branch Establishment Licensing Agency shall issue or not grant the Branch Establishment License to the foreign company. In case of not granting a License, there must be a document clearly stating the reason.

5. Frequently asked questions about regulations on establishing foreign company branches

5.1 How long is the license to establish a branch of a foreign company?

The license to establish a branch of a foreign company is valid for 05 years but must not exceed the remaining term in the Business Registration Certificate or other documents of equivalent value of the foreign company in cases where the license That sheet has regulations on deadlines.

5.2 Can the License to establish a branch of a foreign company be extended?

According to Article 9 of Decree 07/2016/ND-CP stipulating that the term of the License to establish a branch of a foreign company is extended according to regulations.

5.3 Can the head of a branch of a foreign company be an owner of a private enterprise in Vietnam?

The head of a foreign company branch cannot concurrently act as the legal representative of economic organizations established under Vietnamese law, so he does not have the ownership rights of a private enterprise in Vietnam.

5.4 Can I open multiple branches of foreign companies in one province?

A foreign company is not allowed to establish more than one branch with the same name within a province/centrally-run city.

5.5 Are foreign science & technology organizations allowed to establish branches in Vietnam?

According to Clause 1, Article 10 of Circular 03/2014/TT-BKHCN, foreign science and technology organizations establishing branches in Vietnam must meet the conditions specified in Article 21 of Decree 08/2014/ ND-CP and conditions on the branch’s field of operation in Vietnam in Clause 3, Article 11, Clause 2, Article 15 of the Law on Science and Technology 2013.

Above are detailed regulations on establishing branches of foreign companies of Viet My. If you have difficulty establishing a foreign company branch or other related issues, please contact VIET MY LAW AND ACCOUNTING.