SBLAW would like to introduce some information about opening a RO in Vietnam as follows:
1.OPENING A REPRESENTATIVE OFFICE IN VIETNAM
Under the Vietnam’s Decree No. 72/2006/ND-CP of the Government stipulating details of the Commercial Law on Representative Office (hereinafter referred to as “R.O”) and branch of foreign traders in Vietnam, foreign trader can establish its representative office in Vietnam to:
– Exercise the function of a liaison office;
– Facilitate the formulation of co-operative projects of the foreign business entity in Vietnam;
– Research market to promote opportunities for purchase and sale of goods and for provision and sale of commercial services of the foreign business entity that it represents;
– Monitor and activate performance of contracts of the foreign business entity that its represents which have been signed with Vietnamese parties or which relate to Vietnamese markets;
– Conduct other activities permitted by the law of Vietnam.
It is noted that under Vietnam Law, a representative office is not permitted to offer service(s) for profit-making purposes on its behalf in Vietnam.
2. SPECIFIC CONDITIONS FOR OPENING
Under Vietnam Law on Trade, in order to setup a representative office in Vietnam, a foreign business should satisfy following conditions:
– Being legally recognized by the law of the country where such business entity was established or has business registration;
– Must be an merchant had been set up in its country since one year ago or longer. And, the remaining operation duration must be at least one year.
It should be noted that a license of a representative office shall have a duration of five years, but in the case where foreign law stipulates the duration of the business registration certificate of the foreign business entity, the duration may not exceed the residual term of such business registration certificate. In addition, under applicable regulation in Ho Chi Minh City, if a Shared-Office shall be used as location of the representative office, then the duration of license may not exceed one (01) year upon the discretion of Licensing Authority. However, the License can be renewed.
Furthermore, Representative office itself and the Chief of representative office have interests and obligations in accordance with the Commercial Law and the following regulations:
Representative office for one foreign business cannot represent another one and lease out its office;
Chief of representative office of foreign business cannot concurrently do the following positions:
Chief of branche(s) for foreign business in Vietnam;
Legal representative for foreign business to sign contracts without authorization in writing form from foreign business.
Legal representative of business established under the law of Vietnam.If foreign business authorizes the Chief of representative office to sign and modify contracts, the authorization must be in writing form. Each authorization is for one time of signing or modifying only.
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