In today’s globalized economy, establishing a representative office is a strategic step for businesses looking to expand into new international markets. This post explores the role, benefits, and legal requirements of setting up a representative office, along with how it can be an essential tool for businesses seeking to test the waters in foreign territories.
What is a representative office?
A representative office (RO) is a business entity established by a foreign company in another country to handle non-commercial activities. It serves as a liaison between the parent company and the local market, focusing on tasks such as:
Promoting business interests
Conducting market research
Identifying commercial opportunities
Overseeing contract implementation between the parent company and local partners
A representative office is not a separate legal entity and typically cannot engage in direct profit-making activities, such as selling goods or services. However, in some cases, it may be allowed to sign contracts or agreements with local businesses and government bodies.
To establish a representative office in Vietnam, what documents do foreign businesses need?
To establish a representative office in Vietnam, a foreign company must obtain a license issued by the provincial Department of Industry and Trade and complete the post-licensing procedures, including activity notification and seal registration. The application dossier for establishing a representative office must be submitted to the provincial Department of Industry and Trade. According to the regulations, a complete dossier must contain the following documents (which may vary depending on the province where the company applies):
Application form;
A copy of the parent company's business license or certificate of business registration;
A certified and legalized copy of the parent company's Articles of Incorporation and Charter (if applicable);
A legalized copy and a Vietnamese translation of the parent company's audited financial statement for the most recent fiscal year issued by an auditing firm;
A notarized copy of the office lease agreement;
A certified and legalized copy of the passport of the head of the representative office (with a Vietnamese translation required).
All foreign documents must be legalized and then translated into Vietnamese by an authorized translator. The RO license must be issued within a reasonable period of fifteen days from the date of receipt of a satisfactory application dossier.
The representative office license is valid for five years. During these five years, the parent company must remain operational. The license can be renewed. If the parent company’s business license or certificate of incorporation expires, the representative office’s license will also become invalid.
Regulations on operations of representative offices of foreign enterprises in Vietnam
What are the restricted activities of representative offices in Vietnam?
Under Vietnamese law, representative offices are strictly prohibited from engaging in the following activities:
Participating in profit-generating activities such as sales transactions and direct commercial activities;
Receiving orders;
Coordinating purchases and sales for the parent company;
Negotiating and signing contracts;
Handling complaints and submitting bids;
Placing orders, purchasing, or making payments for goods on behalf of the parent company;
Providing after-sales services for the parent company’s products or services;
Acting as an agent or conducting intermediary activities between customers and the parent company.
Functions of representative offices in Vietnam
Foreign representative offices in Vietnam are permitted to carry out activities aimed at supporting the parent company, such as:
Conducting market research activities;
Seeking investment opportunities and partners;
Engaging in promotional activities for the parent company;
Overseeing the execution of contracts with partners in Vietnam.
Any activities of a representative office related to promoting the parent company’s brand are considered legal under Vietnamese law.
What does a representative office need to do after receiving an operating license?
After receiving the RO license, the next steps must be taken as part of the registration process. This process includes publicly announcing the establishment of the RO in Vietnam, commencing operations, and submitting an operational notice. At this stage, the RO may also open a bank account, apply for a company seal, and start applying for work permits (for foreign employees).
The entire process depends on several factors (e.g., whether the documents meet the required 'format') and typically takes between two to six months before the office becomes fully operational. There are certain obligations that the RO must fulfill:
RO employees are subject to tax obligations in accordance with Vietnamese law. The RO is responsible for proper declarations and timely payments.
The RO must submit an annual report on its activities.
Major changes (e.g., staff changes) must be reported.
The activities of the RO are not subject to taxes, except for personal income tax on the employees' salaries mentioned above. A key restriction is that an RO is not allowed to directly engage in commercial activities. Therefore, it may not receive payments or funding from sources other than its parent company.
Why should foreign companies set up representative offices at G Office Vietnam?
Foreign companies should consider setting up representative offices at G Office Vietnam for several key reasons:
Strategic Location
G Office offers prime office spaces in central business districts of major cities like Ho Chi Minh City. These locations provide easy access to business networks, clients, and government agencies, which can be crucial for market research and business development.
Cost-Effective Solution
Setting up a representative office at G Office is a cost-efficient way for foreign companies to establish a presence in Vietnam. G Office provides flexible leasing options and professional services, allowing companies to minimize operational costs while exploring the market.
Professional Facilities
G Office offers fully equipped office spaces with modern facilities, including high-speed internet, meeting rooms, and administrative support. This ensures that foreign businesses can operate smoothly without the need for a large initial investment in infrastructure.
Networking Opportunities
By setting up a representative office at G Office, foreign companies can network with other businesses in the same building or nearby. This facilitates partnerships, collaborations, and access to local market knowledge.
Flexibility to Grow
As the business expands, G Office offers scalable office solutions, meaning companies can upgrade their office space or services as needed, without the hassle of relocating.
In summary, G Office Vietnam provides foreign companies with an ideal, hassle-free platform to establish their representative offices, offering a blend of strategic location, cost-effectiveness, professional support, and flexibility. This allows businesses to focus on exploring and growing their presence in the Vietnamese market.
G Office branches in Ho Chi Minh
Some G Office offices in Ho Chi Minh you can refer to are as follows:
Vincom Center - 72 Le Thanh Ton, Ben Nghe, District 1
Vincom Center Tower is one of the prominent office rental buildings in District 1, and it is also the first "green" and energy-efficient high-rise constructed in Ho Chi Minh City and Vietnam. Contact G Office for detailed information on available space and updated rental rates.
The Vincom Center building is located in a prime area with three façades facing Dong Khoi, Le Thanh Ton, and Ly Tu Trong streets. It is the most notable complex in District 1, featuring luxury apartments, a shopping and service center, and office spaces for lease.
Saigon Trade Center - 37 Ton Duc Thang, Ben Nghe, District 1
Saigon Trade Center Tower is located on Ton Duc Thang Street, District 1, at the heart of the city’s vibrant economic activities. With this prime location, the building promises to be an ideal office headquarters for businesses seeking growth opportunities and potential clients.
The Saigon Trade Center building is situated in District 1, conveniently located on Ton Duc Thang Street, at the intersection with Nguyen Du Street. This location offers numerous advantages, including:
Easy Accessibility: Close to the U.S. Embassy, German Embassy, Le Thanh Ton Street, and the administrative center of District 1.
High-Profile Real Estate: Surrounded by major branded properties such as JW Marriott, Vingroup, and several internationally standard hotels and restaurants.
Major Banks: Home to prominent banks like Standard Chartered, as well as branches of Agribank, Vietcombank, and Techcombank.
Nearby Iconic Landmarks: Close to significant landmarks in Ho Chi Minh City, including Ben Thanh Market, Nguyen Hue Walking Street, the Bitexco Tower, and the Ba Son Metro Station on Line 1.
Due to these advantages, Saigon Trade Center Tower is a top choice for both domestic and international businesses.
Rosana Tower - 60 Nguyen Dinh Chieu, Da Kao, District 1
Rosana Tower is located on Nguyen Dinh Chieu, one of the main streets in the central area of Ho Chi Minh City, offering a prime office rental location.
The building is situated on the key Nguyen Dinh Chieu Street, close to major roads in District 1 such as Cach Mang Thang Tam and Dien Bien Phu.
Location Advantages:
Bustling Area: This location is surrounded by numerous commercial and financial centers such as ACB Bank, Dong A Bank, and VPBank, which helps save time on transactions.
Proximity to Tan Son Nhat Airport: The building is conveniently about a 20-minute drive from the airport, making it easy to welcome clients and potential partners.
Rosana Tower provides an ideal working environment with its convenient location and surrounding amenities, making it a top choice for businesses in District 1.
Saigon Mall - 19 Cao Thang, Ward 2, District 1
Saigon Mall is a mixed-use building combining a shopping center and office spaces, located at 19 Cao Thang, Ward 2, District 3, Ho Chi Minh City. With this prime location, the building is situated on the major Cao Thang Street, close to Nguyen Thi Minh Khai, Vo Van Tan, and Ly Chinh Thang Streets, making it convenient for transportation and commuting.
Location and Advantages of Saigon Mall:
Major Thoroughfare: Cao Thang is one of the key two-way streets in District 3, connecting with major roads such as Nguyen Thi Minh Khai, Vo Van Tan, and Ly Chinh Thang. This ensures smooth traffic flow and easy access to neighboring districts.
Combination of Shopping Center and Office Space: Saigon Mall features amenities such as MEGA GS Cinema, Nguyen Kim Electronics Supermarket, SAIGON MALL, MEDICARE Supermarket, and GOGI Restaurant. This provides numerous conveniences and options for both residents and businesses. Saigon Mall is not only an ideal location for a representative office but also a great choice for shopping and entertainment activities in District 3.
Saigon Mall is not only an ideal destination for a representative office but also a fantastic choice for shopping and entertainment activities in District 3.
Ha Do Building - No. 2 Hong Ha, Ward 2, Tan Binh
Ha Do South Building is one of the modern office buildings located in Tan Binh District.
Location and Advantages of Ha Do South Building:
Prime Location: Ha Do South Building is situated on Truong Son Street in Tan Binh District, surrounded by major shopping centers and bank branches such as Techcombank, ACB, and BIDV.
Convenient Transportation: The building offers easy access to neighboring districts like District 1, Go Vap, and Phu Nhuan.
Proximity to Tan Son Nhat Airport: One of the major advantages of Ha Do South Building is its close proximity to Tan Son Nhat Airport, making it easy and time-efficient to welcome clients and partners.
Ha Do South Building is not only an ideal choice for businesses seeking modern representative office spaces but also provides superior amenities and convenience in Tan Binh District.
In addition, G Office is a leading provider of shared office spaces, virtual offices, and coworking spaces in Ho Chi Minh City. With nearly 20 years of experience and the trust and support of numerous local and international businesses, we are confident in delivering a comprehensive and convenient service solution for companies. For inquiries, please contact us at: 028 222 00 919.
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