GBS - Decree 07/2016/ND-CP, dated January 25, 2016 by the Government (Decree 07) replacing Decree 72/2006/ND-CP (Decree 72) detailing the Representative Office and branches of the foreign traders in Viet Nam.
Question: What are the new regulations of establishment and scope of activities for setting up foreign representative offices and branches in Viet Nam as stipulated on Decree 07?
Answer: Decree 07 has outstanding points as follows:
Establishment of foreign representative offices
Decree 07 supplements a new regulation with respect to requiring foreign traders to establish no more than one representative office or branch of the same name within a centralized province or city.
The establishment of the foreign traders’ representative office or branch still complies with Viet Nam’s commitments in the international treats to which Viet Nam is a member.
Scope of activities
Decree 07 dropped out the function of tracking and pushing up the implementation of the contract signed with Viet Nam’s partners or relating to Viet Nam’s markets, where the foreign traders’ representatives operate and only retained the representative office main functions as follows: (i) liaison office; and (ii) market survey, promotion of the business investment opportunities by the traders as their representatives, not including the service area where the establishment of representative offices in such area is specified in the specialized normative legal documents.
Conditions on establishment of representative offices
Under decree 72, foreign traders want to establish representative offices and branches in Viet Nam shall meet two criteria (i) having been fully recognized by the law of the country or territory where such traders have established or registered their business; and (ii) having been operating for no less than one year since the trade’s company was fully established or registered for business in its original country.
However, Decree 07 added some provisions to further tighten the conditions for foreign traders to obtain their establishment license for representative offices and branches in Viet Nam such as:
- Being established, registered for business in accordance with the law of the countries and territories participating in the international treaties to which Viet Nam is a member, or recognized by the law of such countries and territories;
- Where the Business Registration Certificate or any paper of equivalent value of the foreign traders has specified the operation term, such term shall remain valid for at least one year from the date of logging the application file;
- The contents of the representative office’s operations shall match Viet Nam’s commitments to the international treaties ratified or concluded by Viet Nam./.