Tiếng Việt
Dear Valued Clients,
Besides the branch or the representative office, the business location is also one of the dependent units’ types of enterprises established in Vietnam. Depending on business purposes and needs, businesses can establish business locations to serve their plans.
In order to understand clearly the definition, functions, activities, and established procedures of a business location in accordance with the laws, please refer to this article. Customers can also read more instructions on setting up branches and representative offices in our previous articles.
1. Definition
Pursuant to Article 44.3 of the Law on Enterprises 2020, a business location is “where an enterprise operates specific business activities”.
According to Article 4.10 of the Law on Enterprises 2020, an enterprise is an organization with its own name, property, and headquarters, established under the laws for business purposes. Enterprises established under the Vietnam Law on Enterprises (referred hereby to as “VNE”) are allowed to establish business locations to serve their activities. In addition, the current Law on Enterprises also allows the establishment of business locations under branches (applicable to branches of VNE).
However, please note that foreign traders (understood as organizations, or enterprises established under foreign laws) and foreign traders’ branches operating in Vietnam will not be allowed to establish business locations.
2. Differences between business locations and branches
Among the enterprises’ dependent units, the business location and the branch are the units that are allowed to operate business activities in accordance with the field of operation of the management units. In order for customers to distinguish these two types of dependent units, we make the following evaluation criteria table:
| Criteria | Business location | Branch |
| Legal basis | · Law on Enterprises 2020;
· Decree 01/2021/ND-CP (“DC 01“) |
· Law on Enterprises 2020;
· Decree 07/2016/ND-CP (“DC 07); · Other related specialization legal documents. |
| Management unit | · VNE;
· VNE’s branches. |
· VNE;
· Foreign traders according to regulations of DC 07; · Other foreign traders stipulated in specialization legal documents. |
| Operation code | · Business location code is a 5-digit code assigned in the ordinal number from 00001 to 99999.
· This code is not the business location’s tax code[1]. |
· For VNE’s branch:
Form: “VNE code” – “X” (where X is the registration number of the branch establishment, for example: 001, 002, 003, etc). This code is also the branch’s tax code[2]. · For the other branches: In accordance with the laws time by time. |
| Operation license | Business Location Registration Certificate issued by Business Registration Office – Department of Planning and Investment (“BRO“). | · For VNE’s branch:
Branch Registration Certificate issued by Business Registration Office – Department of Planning and Investment. · For foreign traders’ branch operating in accordance with DC 07: Foreign Traders’ Branch Registration Certificate issued by Ministry of Industry and Trade. · For the other branches: Foreign Trader’s Branch Registration Certificate in accordance with specialization legal documents. |
| Term of operation | According to the time limit or decision of the management unit. | · For VNE’s branch:
According to the time limit or decision of the management unit. · For foreign traders’ branch operating in accordance with DC 07: In accordance with Foreign Trader’s Branch Registration Certificate. The maximum time limit is 5 years and can be renewed multiple times[3]. · For the other branches: According to the specialization legal documents. |
| Scope of business | · Carrying out only one or several business activities of a VNE, not acting as an authorized representative.
· Economic contracts signing is not allowed. · Invoice using and issuing is not allowed. |
· Carrying out only one or several business activities of a VNE, include acting as an authorized representative.
· Economic contracts signing is allowed. · Invoice using and issuing is allowed. |
| The Seal | The own seal usage is not allowed | The own seal usage is allowed |
| Accounting system | Accounting depends on the management unit. | Choose between independent accounting or dependent accounting on the management unit. |
| Tax | Licensing Fee (as known as Business License Tax) | · Licensing Fee (as known as Business License Tax);
· Value Added Tax; · Corporate Income Tax; · Personal Income Tax. |
| Establishment and change of enterprise registration information | Application dossiers are easy to be prepared in most of procedures. | · The establishment procedure of a branch is more complicated than a business location.
· Must carry out tax procedures before changing the address to another district. |
3. Establishment procedures
3.1. The procedure
- Step 1: Prepare the application dossier following Section 3.3;
- Step 2: Submit the application dossier as prepared in Step 1 to BRO via the National Business Registration Portal[1].
- Step 3: If the dossier meets all conditions, BRO will issue a Business Location Registration Certificate. In case the application is not valid, the BRO shall notify in writing the information needs to be amended and supplemented.
3.2. License approval period: Within 03 (three) working days from the date of submission of the complete and valid application dossier.
3.3. Application dossier[2]:
| No. | Document | Document type |
| 1 | Notice of the business location establishment (form Annex II-7 attached to Circular No.01/2021/TT-BKHDT) | Original |
| 2 | Legal document(s) of the business location’s head
(Identity card/ Citizen ID/ Passport) |
Notarized copy (If using a foreign passport, a notarized translation is required) |
| 3 | Power of Attorney for representative to carry out business registration procedures
(In case the legal representative of the enterprise or the head of the business location does not directly submit the application) |
Original |
| 4 | Legal document(s) of the representative carrying out business registration procedures
(Identity card/ Citizen ID/ Passport) |
Notarized copy |
As always, we hope you find this Legal Article useful and look forward to working with you in the future.
Kind regards,
ENT LAW LLC
The full version of this Legal Article can be found here.
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[1] Access at: https://dangkyquamang.dkkd.gov.vn.
[2] Article 31 of Decree 01.
[1] Article 8.6 of DC 01.
[2] Article 8.5 of DC 01.
[3] Article 9.1 DC 07.
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