1. What is a branch of a foreign company according to Vietnamese law

In the process of international integration, companies are tending to grow not only within the territory of a country, region but wish to expand the business to many countries by establishing branches, thus, extending their operation area around the world. In order to do that, these companies need to comply with the laws of the host countries where they establish their branches.

According to the current provisions of Vietnamese law, foreign companies may set up their branches in Vietnam in accordance with conditions and procedures prescribed by Vietnamese law.

The current Enterprise Law of Vietnam defines a branch of an enterprise is a dependent unit of the enterprise, is responsible for implementing all or parts of the functions of the enterprise, including the function of authorized representative. Accordingly, the concept of a branch of a foreign company in Vietnam can be understood as a dependent unit of the foreign company, established and operating in Vietnam under the provisions of Vietnamese law or Treaties that The Socialist Republic of Vietnam is a member.

2. Why do foreign companies choose to establish a branch in Vietnam?

A branch in Vietnam of a foreign company has the following rights:

- Rent offices, rent and purchase necessary facilities and equipment for the branch's operations.
- Recruit employees who are Vietnamese and foreigners to work at the Branch in accordance with Vietnamese law.
- Entering into contracts in Vietnam in conformity with the operation contents prescribed in the branch establishment licenses and the provisions of the law.
- Opening accounts in Vietnam dong and foreign currencies at banks licensed to operate in Vietnam.
- Transferring profits abroad according to the provisions of Vietnamese law.
- Having a seal bearing the branch's name in accordance with Vietnamese law.
- Carrying out activities of buying and selling goods and other commercial activities in accordance with the establishment license, provisions of the laws of Vietnam and international treaties which the Socialist Republic of Vietnam is a member.
Therefore, a foreign company can conduct business activities, making contracts with business partner and sell and buy goods or service through a branch in Vietnam, unlike a representative office which cannot enter contracts or conduct business activities in Vietnam.

3. How to establish a branch of a foreign company

3.1. Condition to establish a branch of a foreign company in Vietnam

A foreign company that wants to establish a branch in Vietnam must proceed with the procedure of registering for a Branch Establishment License. A foreign company may not establish more than one Branch with the same name within a province or city directly under the Central Government. Besides, the foreign company must also meet the following requirements:

- The foreign companies are established and registered in accordance with the law of nations/territories which are parties to international treaties to which Vietnam is a member or recognized by the laws of these territories.
- The foreign company has been operating for at least 5 years since the establishment or registration. In cases where the business registration certificate or equivalent papers of the foreign company stipulate the operation duration, such time limit must be at least 1 year counting from the date of filing the dossier;

3.2. The dossier of application for a Branch Establishment License

A dossier of application for a Branch Establishment License includes the following documents:
- An application form for a branch establishment license, signed by a competent representative of the foreign company;
- A copy of the business registration certificate or equivalent paper of the foreign company;
- Documents of the foreign company appointing the head of the Branch;
- Copies of audited financial statements or documents certifying the performance of tax or financial obligations in the latest fiscal year or equivalent papers of competent agencies or organizations where the foreign company established issue or certify the existence and operation of the foreign company in the latest fiscal year;
- Copy of the operation charter of the branch;
- Copy of passport or identity card or citizen identification card (if Vietnamese) or copy of passport (if foreigner) of the head of the Branch;
- Documents about the expected location of the Branch office

3.3. General conditions for dossiers of application for establishment licenses of branches

- Documents issued or certified by competent foreign agencies must be consular legalized and translated into Vietnamese; The translation documents must be notarized in accordance with Vietnamese law.

- Copies of documents issued or certified by competent Vietnamese agencies must be notarized in accordance with the provisions of Vietnamese law.

4. Where to register a Branch Establishment License

Minh Khue Law Firm is currently a reputable and quality law firm to provide service of establishing a branch of a foreign company in Vietnam. Foreign companies can contact or come to Minh Khue Law Firm for advice and guidance on our services.
The establishment of a Branch of a foreign company is carried out by Foreign Investment Department of Minh Khue Law Firm at 2nd Floor, FaFim Building, No. 19 Nguyen Trai, Khuong Trung Ward, Thanh Xuan District. Hanoi street implemented.

The person in charge of the Foreign Investment Department of Minh Khue Law Firm:

Lawyer: To Thi Phuong Dzung

Email: dung@luatminhkhue.vn ;

Phone number: 0986 386 648

The dossier is filed in: Ministry of Industry and Trade of Vietnam

5. Process of registration of Branch Establishment License

Step 1: Prepare the documents and submit to competent agencies
If the foreign company uses our service of establishing a branch in Vietnam, Minh Khue Law Firm will counsel and assist the client in preparing documents as prescribed by provisions of law. After completing the application dossier, Minh Khue Law Firm will on behalf of client to submit directly the application in the Ministry of Industry and Trade of Vietnam.
Step 2: The Ministry process the application
Within 03 working days, from the date of receiving the dossier, the Ministry shall examine the application and request to provide additional documents if the dossier is incomplete and valid. The request for additional records is made up to a maximum of once during the application process.
Within 7 working days from the date of receipt of a complete and valid dossier, the Ministry shall decide to grant or not to grant a Branch Establishment License to a foreign company. In case of refusing to grant a license, the competent agency must issue a document stating the reason.
The term of a Branch establishment license is 5 years, however, this time limit shall not exceed the remaining duration of the business registration certificate or equivalent papers of a foreign company in case of these papers has a time limit.

6. Contact to establish a branch of a foreign company in Vietnam

Please contact: Minh Khue Law Company Limited

Address: 2nd Floor, FaFim Building, No. 19 Nguyen Trai, Khuong Trung Ward, Thanh Xuan District, Hanoi City

Phone number: 0986 386 648 - Lawyer: To Thi Phuong Dzung

Email: dung@luatminhkhue.vn

Sincerely thank you,

Foreign Investment Department - Minh Khue Law Company Limited