| REPRESENTATIVE OFFICE | 100% FOREIGN INVESTED COMPANY | |
| Operation content | Operation contents of representative office– Doing the function of liaison office.- Formulating of cooperation projects of foreign traders in Vietnam.- Making the market research in order to promote opportunities to buy or sell goods, provide and use commercial services of traders they represent.
– Monitoring and urge of the performance of contracts signed with Vietnamese partners or related to the Vietnamese market by foreign traders they represent. – Other operations allowed by Vietnamese law. However, a representative office has no right to do business activities. |
Operation contents of 100% foreign invested company– Doing business in the field that investor did register.- Doing research, trade promotion… to advertise the company’s image.- All other activities as domestic businesses are required by law. |
| Opening of accounts | Opening of accounts– Representative offices are allowed to open expenditure accounts in foreign currencies and expenditure accounts in Vietnam dong of foreign-currency origin at banks licensed to operate in Vietnam and use such accounts only for their operations | Foreign direct investment in Vietnam– Enterprises with foreign direct investment, foreign investors participating business cooperation contract have to open investment accounts directly in a credit institution which is permitted. The contribution of capital investment, the transfer of the original investment, profits and other lawful revenues have to perform through this account.- In the operation, company will set up other accounts for operation of business in either Vietnam dong or foreign currency. |
| Reporting on operation | Reporting on operation – Annually, before the last working day of January, representative offices shall send written reports on their operations in the preceding year to the agencies having granted representative office permits. | Reporting on operation :– Every year, foreign invested company must submit financial reports, project progress reports as provision of Vietnam law. The kind of reports will be depended on the field that such company does. |
| Taxes | Representative office only perform enumeration and pay taxes, as follows: – Personal Income Tax- Value Added Tax- Other taxes in the particular case (if any). | 100% FOREIGN INVESTED COMPANY shall perform enumeration and pay taxes, as follows: – Value Added Tax- Corporate income tax- License
– Personal Income Tax – Charges and fees – Other taxes under the provisions of the law of Vietnam. |
| Rights and obligations | Rights and obligations of representative offices and their headsRepresentative offices and their heads shall exercise their rights and perform their obligations in accordance with the provisions of the Commercial Law and the following regulations:- Representative offices must neither act as representatives for other traders nor sub-lease their head offices.- The head of a representative office of a foreign trader must not concurrently hold the following posts:
a/ The head of a Vietnam-based branch; b/ The representative at law of the foreign trader for signing contracts without the latter’s letter of authorization; c/ The representative at law of the enterprise established under Vietnamese law. – In case foreign traders authorize heads of their representative offices to sign contracts, amend or supplement already signed contracts, they shall have to effect the authorization in writing for each contract signing or each amendment or supplementation of a signed contract . Obligations of foreign traders towards their representative offices or branches – Foreign traders shall be held responsible before Vietnamese law for all operations of their Vietnam-based representative offices or branches. – Heads of representative offices shall be responsible for their activities and the operations of their representative offices before Vietnamese law in cases they conduct operations beyond the scope of authorization.
|
Depending on the type of company that investors choose to implement their projects that rights and obligations of investors will be provisioned in the Vietnam Enterprises Law. However, investors have the general rights and obligations as follows :- Right to autonomy in investment and business- Right to access and use investment resources- Right to import and export, advertisement, marketing, processing and reprocessing related to investment activities
– Right to buy foreign currencies – Mortgage of land use rights and assets attached to land – Other rights provision in the Investment Law of Vietnam. – To comply with the provisions of law on investment procedures; to carry out investment activities strictly according to contents of investment registration and their investment certificates. – Investors shall be responsible for the accuracy and truthfulness of contents of investment registration, dossiers of investment projects and legality of documents of certification. – To fulfill financial obligations under the provisions of law. – To implement the provisions of law on accountancy, audit and statistics. – – To perform obligations provided by insurance and labor laws; to respect the honor, dignity and ensure the legitimate interests of laborers. – – To respect and create favorable conditions for laborers to establish and participate in political or socio-political organizations. – To observe the provisions of environmental protection law. – To perform other obligations in accordance with the provisions of law. |
| Term of operation | Representative offices shall have a valid term of five years, which will be not exceeding the remaining valid term of such foreign traders’ business registrations papers. | The operational duration of a foreign investment project shall be compatible with the requirements on operation of the project and shall not exceed 50 years. In case of necessity, the Government shall decide on the prolongation of such duration, which, however, shall not exceed 70 years.
The operational duration of a project shall be written in the investment certificate. |
