Representative Office Establishment for Foreign-Invested Companies

As they grow in Vietnam, many foreign-invested enterprises (FDI) need to expand their operating network, strengthen their commercial presence, or establish points of contact in other provinces and cities. Establishing a representative office is a suitable solution that helps the company strengthen connections with customers and partners and support business activities without having to set up a new legal entity.

What is a representative office?

Under Article 44 of the Law on Enterprises 2020, a representative office is a dependent unit of the company, tasked with representing and protecting the company's interests under authorization.

An enterprise has the right to establish representative offices both in Vietnam and abroad. A company may have one or more representative offices in a given location, depending on the administrative boundaries.

Functions of a representative office

• It has no business function and may not conduct sales, generate revenue, or sign contracts with customers.
• Its main function is to serve as a liaison office: conducting research, providing information, and helping the company reach new markets and partners.
• A company that wants to research a market or promote its brand in a location other than its head office may establish a representative office.
• It may only carry out promotional activities on behalf of the company.

Advantages of establishing a representative office

• No tax procedures or business license fee are required for a representative office.
• The representative office can be located in the same place as the head office or in another province.
• The company can open representative offices abroad.
• It helps the company develop markets or promote its brand in other provinces and cities.

Disadvantages of establishing a representative office

• A representative office may not carry out any business activity.
• Even when relocating the representative office to another district, the company must still confirm its obligations, including tax obligations, with the tax authority of the old address.

Conditions for establishing a representative office

Under Vietnamese law, the procedure for establishing a representative office is relatively simple. However, the enterprise still needs to meet certain conditions to be granted the Certificate of Registration of Representative Office Operation:

• The representative office's name must comply with regulations, consisting of the enterprise's name together with the phrase "Van phong dai dien" (Representative Office); it must not be identical to or confusingly similar to a previously registered unit, and it must appear on the signboard, transaction documents, and materials issued by the representative office.
• The representative office must have a lawful, clearly identified operating address that complies with enterprise registration regulations; this address is used for contact, transactions, and dealings with competent state authorities.
• The head of the representative office must be validly appointed by the enterprise and act within the scope of authorization. The representative office has no authority to sign commercial contracts in its own name; any transactions must comply with the law and the enterprise's internal governance rules.
• On signboards, the representative office's name should be written in capital letters or in a smaller font size than the Vietnamese name of the parent company; this rule also applies to transaction papers, documents, and publications. Contracts signed by the representative office must have the company's approval and seal.