I. Introduction

Vietnam is increasingly becoming an attractive destination for international investors due to its favorable business environment and supportive investment policies. One popular investment method for foreign merchants is establishing branches in Vietnam. A foreign merchant’s branch not only helps expand their business network but also facilitates access to the domestic market. This article provides an overview of the legal regulations, procedures, rights, and obligations concerning the establishment of foreign merchant branches in Vietnam.

II. Legal Basis

• Law on Enterprises 2020
• Law on Investment 2020
• Decree 31/2021/ND-CP
• Decree 07/2016/ND-CP
• Commercial Law 2005

A branch of a foreign merchant in Vietnam is a dependent unit, established and operating commercially in Vietnam in accordance with Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a signatory. A foreign merchant may not establish more than one representative office or branch with the same name within a single centrally governed province or city. The foreign merchant is legally responsible in Vietnam for all activities conducted by their representative office or branch.

III. Rights of Foreign Merchant Branches in Vietnam

• Leasing premises and renting or purchasing necessary equipment and materials for branch activities
• Recruiting Vietnamese and foreign employees to work at the branch
• Entering contracts in Vietnam in alignment with the activities specified in the branch’s establishment license and as per law
• Opening bank accounts in Vietnamese currency or foreign currency at authorized banks in Vietnam
• Remitting profits abroad
• Having a seal bearing the branch’s name
• Engaging in the sale of goods and other commercial activities in line with the establishment license
• Other rights as prescribed by law

IV. Obligations of Foreign Merchant Branches in Vietnam

• Implementing accounting practices as prescribed by Vietnamese law; if a different accounting system is required, approval from the Ministry of Finance of the Socialist Republic of Vietnam is necessary
• Submitting reports on the branch’s activities
• Other obligations as required by law

V. Conditions for Establishing a Branch

To open a branch in Vietnam, foreign merchants must meet certain basic conditions. Firstly, the branch may only operate in industries permitted by Vietnamese law. This means the branch must comply with regulations related to the industry the foreign merchant intends to engage in.

Additionally, the branch must align with the international commitments Vietnam has made, such as free trade agreements, to ensure its operations comply with both Vietnamese and international standards.

VI. Branch Establishment Procedures

The branch establishment process includes specific steps and procedures:

Registration Dossier: The foreign merchant must prepare a dossier, including:

• A branch establishment application
• Documents proving the legal and financial standing of the foreign merchant, such as a business license and financial statements
• A decision from the authorized body of the foreign merchant on establishing the branch
• A valid copy of the investment certificate (if applicable)

Dossier Submission: The dossier must be submitted to the Business Registration Office of the Department of Planning and Investment of the province or city where the branch intends to be headquartered.

Processing Time: It typically takes about 15-30 working days for the authorities to review and issue an operational license for the branch, depending on the nature and completeness of the dossier.

VII. Management and Supervision

The branch of a foreign merchant in Vietnam is subject to oversight by authorities such as the Department of Planning and Investment, the Department of Industry and Trade, and tax authorities. These agencies are responsible for inspecting and supervising the branch’s activities to ensure legal compliance.

Regulatory authorities may conduct periodic or ad hoc inspections to ensure the branch is operating in accordance with its license and the law. If violations are found, they may impose measures such as fines or require the branch to adjust its activities.

VIII. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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