Tiếng Việt
Dear Valued Clients,
The branch is one of the multiple types of an enterprise’s dependent unit in Vietnam. Based on the purposes and needs, Vietnamese or foreign traders can choose to register to operate or establish a branch to facilitate their business activities.
In order to understand clearly the definition, functions, activities, and established procedures of a Branch according to the law, Valued Clients can refer to our below legal article.
1. Definition
There are two types of branches as prescribed by Vietnamese law, including (1) branches of enterprises established and operating in Vietnam (“VN Enterprise Branch”), and (2) branches of foreign traders (economic organizations, enterprises established and operating abroad, in accordance with foreign laws) (“Foreign Trader Branch“).
VN Enterprise Branch is considered a dependent unit of an enterprise in Vietnam[1] (referred to as “VN Enterprise“). VN Enterprises are enterprises established, organized, and operating in Vietnam, according to Vietnamese law, regardless of domestic or foreign capital sources.
Foreign Trader Branch is a dependent unit of a foreign trader but is established and conducts commercial activities in Vietnam in accordance with the provisions of Vietnamese law or an international treaty to which Vietnam is a member[2]. Forms of the presence of foreign investors in Vietnam include representative offices, Foreign Trader Branches, executive offices of foreign investors in business cooperation contracts and foreign-invested economic organizations. Among the types mentioned above, the establishment of foreign-invested economic organizations is the most common, which is implemented in accordance with Vietnam’s commitments in the WTO and domestic laws. Meanwhile, the commercial presence through the form of a Foreign Trader Branch is very limited, only allowed in a few specific areas according to specialized laws of Vietnam (such as branches of foreign banks in Vietnam).
2. Differences of branch forms
| Criteria | VN Enterprise Branch | Foreign Trader Branch |
| Legal basis | Law on Enterprises 2020 | Decree No. 07/2016/ND-CP detailing Commercial Law on representative offices, and branches of foreign traders in Vietnam (hereby referred to as “Decree 07“) |
| Operation conditions | The business lines of the branch must consistent with the business lines of the VN Enterprise | · The foreign trader is incorporated and registers 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 year from the date of establishment or registration; · The foreign trader’s business license or equivalent document is valid for at least 01 more year prior to the date of application submission; · The scope of operation of the branch is in accordance with Vietnam’s commitments to market access stipulated in treaties to which Vietnam is a signatory, and shall be consistent with lines of business of the foreign trader. |
| Quantity | Each VN Enterprise can establish 01 or more local branches according to the geographical boundaries of administrative units | A foreign trader may only establish 01 branch with the same name within a province or central city |
| License | Certificate of branch operation registration | Certificate of branch establishment in Vietnam |
| Issued Authority | Business Registration Office of the Department of Planning and Investment of the place that the branch is located (hereby referred to as “BRO“) | Ministry of Industry and Trade (hereby referred to as “MOIT“) |
| Term of operation | In accordance with the term of operation of VN Enterprise | In accordance with the term of the Certificate of branch establishment in Vietnam, the maximum is 5 years and can be renewed multiple times |
| Scope of operation | Perform all or parts of the functions of the VN Enterprise, including the authorized representative | Providing services (including conditional business lines if all conditions are complied with as prescribed by laws) but excluding services regulated by specialized laws[3] |
3. Establishment procedures
3.1. For VN Enterprise Branch
a. The procedure:
- Step 1: Prepare the application dossier following Section 3.1(c).
- Step 2: Submit the application dossier as prepared in Step 1 to BRO via the National Business Registration Portal[4].
- Step 3: If the dossier meets all conditions, BRO will issue a Certificate of branch operation registration. In case the application is not valid, the BRO shall notify in writing the information needs to be amended and supplemented.
b. License approval period: Within 03 (three) working days from the date of submission of the complete and valid application dossier.
c. Application dossier[5]:
|
No. |
Document |
Document type |
| 1 | Notice of the branch establishment (form Annex II-7 attached to Circular No.01/2021/TT-BKHDT) | Original |
| 2 | Decision on establishment of the branch of members’ council (for multi-members limited liability companies or partnerships) or the board of management (for joint stock companies) or the owner (for single-member limited liability companies) | Original |
| 3 | Minutes on the establishment of the branch of members’ council (for multi-members limited liability companies or partnerships) or the board of management (for joint stock companies) | Original |
| 4 | Legal document(s) of the branch’s head (Identity card/ Citizen ID/ Passport) | Certified copy (If using a foreign passport, a notarized translation is required) |
3.2. For Foreign Trader Branch
a. The procedure:
- Step 1: Prepare the application dossier following Section 3.2(b).
- Step 2: Submit the application dossier as prepared in Step 1 to MOIT.
- Step 3: Within 03 working days from the date of receipt of the application dossier, MOIT will check and request additional information if the dossier is incomplete or invalid.
In case it is necessary to consult the Ministry of specialized management, MOIT shall send a written request for opinions of such Ministry within 03 working days from the date of receipt of a complete and valid dossier. Within 05 working days from the date of receipt of the written request for opinions from MOIT, the Ministry of specialized management shall issue a written notice clearly stating their agreement or disagreement with the issuance of the branch’s establishment license.
- Step 4: In case it is not required to consult the Ministry of specialized management, within 07 working days from the date of receipt of a complete and valid application dossier, MOIT will decide to issue or not the Certificate of branch establishment in Vietnam.
b. Application dossier[6]:
|
No. |
Document |
Document type |
| 1 | Application for Certificate of the branch establishment (Annex MD-5 attached to Circular 11/2016/TT-BCT) | Original |
| 2 | Business license or equivalent documents of the foreign trader | Consular legalized and notarized translation |
| 3 | Document of foreign trader appointing the head of the branch | Original |
| 4 | Audited Financial Statements (for the latest fiscal year prior to the date of application submission) of the foreign trader | Certified copy and the notarized translation |
| 5 | Legal document(s) of the branch’s head (Identity card/ Citizen ID/ Passport) | Certified copy (If using a foreign passport, a notarized translation is required) |
| 6 | Charter of the Foreign Trader Branch | Copy |
| 7 | Documents on the proposed location of the branch head office, including:
– Lease Contract of the branch head office location; – Certificate of the land use right and assets attached to the land of the Lessor; – In addition to the above documents, foreign traders may be required to provide a Construction License for the branch head office location and a enterprise registration certificate of the Lessor. |
Certified 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] Article 44.1 of Law on Enterprises 2020.
[2] Article 3.7 of Commercial Law 2005.
[3] Article 31 of Decree 07.
[4] Access at: https://dangkyquamang.dkkd.gov.vn.
[5] Article 31 of Decree 01/2021/ND-CP
[6] Article 12 of Decree 07.
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