PROVISIONS ON BRANCH

Legal basis:

Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of foreign traders in Vietnam

When registering the operation of a branch of a foreign trader, Clients should note the following provisions:

Conditions for granting a Branch establishment license

The foreign trader is incorporated and registered for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;
The foreign trader has come into operation for at least 05 years from the date of establishment or registration;
The certificate of business registration or equivalent document is valid for at least 01 more year from the date of submission of the application;
The scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign trader;
Where the businesses of the branch are inconsistent with Vietnam’s Commitments or the foreign trader is not located in one of countries or territories being parties to treaties to which Vietnam is a signatory, the branch can be established only if they obtain a prior consent of the relevant managerial Minister for establishment of the branch.

Branch headquarters PROVISIONS ON BRANCH OF AN ENTERPRISE

Headquarter of a branch shall be placed at locations that satisfy requirements for security, occupational hygiene and safety and others stipulated in laws of Vietnam.
A branch shall not be allowed to lend or sublet their headquarters.

How to name a branch PROVISIONS ON BRANCH OF AN ENTERPRISE

Name of a branch must be written with the letters of the Vietnamese alphabet, letters F, J, Z and W, numbers and symbols.
Name of a branch shall be the name of its head office enclosed with the phrase “branch”.

Example: Branch of ABC LLC in Ho Chi Minh City

Nameplate of a branch shall be hung at its office. The size of the name of the branch written or printed in their transaction documents, records and publications shall be smaller than the foreign trader’s name.

Scope of branch operation PROVISIONS ON BRANCH OF AN ENTERPRISE

A branch shall provide services in service business line other than those specified in specialized legislative documents.
A branch is allowed to operate in fields having requirements for operation only if they satisfy all such requirements promulgated by respective laws.

Head of Branch PROVISIONS ON BRANCH OF AN ENTERPRISE

Head of a branch shall be responsible for his/her action and the operation of the branch to his/her head office within the power of attorney.
Head of a branch shall be responsible for his/her activities in case of performing activities outside the scope authorized by the foreign trader.
In the absence of the head of the branch in Vietnam, he/she shall grant the power of attorney to another person. The power of attorney shall be made with a prior consent of the foreign trader. However, the head of the branch is still responsible for the performance of the authorized rights and obligations.
In case the authorization period expires but the head of the branch has not returned to Vietnam and has no other authorization, the current authorized person shall be eligible for performing rights and obligations as the head of the branch within the scope of authorization until the head of the branch returns or the foreign trader appoints another person as a new head of the branch.
In case the head of the branch is not present in Vietnam for more than 30 days without any authorization, or if the head of the branch is dead, missing, detained, sentenced to prison or has no capacity for action, the foreign trader shall appoint another person asa new head of the branch.
The head of a branch shall not concurrently hold the following titles:

The head of a representative office of another foreign trader;
The head of a representative office of the same foreign trader;
The legal representative of a business organization incorporated under Laws of Vietnam.

Procedures for licensing the establishment of a branch

1. Dossier for registration of branch operations PROVISIONS ON BRANCH OF AN ENTERPRISE

An application form for license for establishment of the branch using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.
Copies of the Certificate of Business Registration or equivalent documents of the foreign trader;
A letter of appointment of a head of the branch;
Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established; PROVISIONS ON BRANCH OF AN ENTERPRISE
Copies of the branch charter;
Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch;
Documents on the expected location of the branch including:

A copy of memorandum of understanding or leasing agreements or documents as proof of the right to use a location as the branch; PROVISIONS ON BRANCH OF AN ENTERPRISE
A copy of documents on the expected location of the branch as prescribed by laws.

2. Regulations on consular certification or legalization PROVISIONS ON BRANCH OF AN ENTERPRISE

The following documents must be translated into Vietnamese and certified in accordance with laws of Vietnam:

Copies of the Certificate of Business Registration or equivalent documents of the foreign trader;
A letter of appointment of a head of the branch;
Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established;
Copies of the branch charter;
Copies of the passport of the head of the branch (for foreigner)

The following documents must be certified or legalized by overseas diplomatic missions or Consulates of Vietnam in accordance with laws of Vietnam. PROVISIONS ON BRANCH OF AN ENTERPRISE

Copies of the Certificate of Business Registration or equivalent documents of the foreign trader.

3. Implementation process: PROVISIONS ON BRANCH OF AN ENTERPRISE

The foreign trader submits the dossiers directly or by post or online (if eligible) to the Department of Industry and Trade (Licensing Agency) where the Branch is expected to be located.
The licensing agency shall examine such applications and request the applicant to complete their application within 03 working days from the date of receipt of the application (if the application is incomplete). The request for supplementation to the application shall be made only once during the processing of such application.
Apart from the case specified below, the licensing agency shall send the applicant a written notification of whether the license or establishment of the branch is granted or not within 07 working days from the date of receipt of the valid application. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified. PROVISIONS ON BRANCH OF AN ENTERPRISE

In case of refusal to grant a branch establishment license

Failing to satisfy one of the requirements for granting a license to establish a branch.
The foreign trader applies for a license to establish a branch within 2 years from the date on which a license to establish a branch is revoked.
The establishment of the branch is restricted by law for reasons of national defense, security, social order and safety, social ethics and public health.

If you have any questions during the registration process to establish a branch of a foreign trader, please contact Businesslicense.vn for the best support.