Establishing branches is a pivotal expansion strategy for businesses-especially foreign entities. It builds a robust commercial presence, elevates brand visibility, and facilitates direct access to local markets. To ensure market transparency and stability, Vietnam enforces stringent regulatory requirements for such operations. 

In this article, Hung Phi Law Firm outlines the Branch establishment procedure for foreign traders in Vietnam to help clients ensure regulatory compliance and mitigate legal risks.

1. A brief on branches in Vietnam

Branch offices in Vietnam: Concept and key characteristics

According to Clause 1, Article 44 of the Vietnamese Law on Enterprises 2020, a branch of an enterprise is its dependent unit which has some or all functions of the enterprise, including authorized representative. The business lines of a branch shall match those of the enterprise.

The characteristics of a branch can be summarized into four key points:

– Legal status: A branch is a dependent unit of the enterprise. It does not have independent legal personality and remains under the direct management and ownership of the parent enterprise.

– Functional scope: A branch is entitled to perform some or all functions of the enterprise, including acting as an authorized representative to conduct transactions or sign contracts on the enterprise’s behalf.

– Business line consistency: The business lines and activities of a branch must match those of the enterprise. A branch cannot register or conduct business in sectors that the parent enterprise is not already registered to perform.

– Liability and assets: Since it lacks independent status, the parent enterprise remains ultimately responsible for all civil obligations, debts, and liabilities arising from the branch’s operations.

>>SEE ALSO:

REGULATIONS ON THE IMPLEMENTATION OF INVESTMENT PROJECTS IN VIETNAM

2. Conditions for the establishment of branches for foreign traders in Vietnam

In which case shall foreign traders be granted branch establishment licenses?

According to Article 8 of Decree 07/2016/ND-CP, a foreign trader may be licensed to establish a branch when meeting the following conditions:

– The foreign trader has been established or has registered its operation under the law of a country or territory being member to a treaty to which Vietnam is a contracting party or recognized by the law of such country or territory.

– The foreign trader has been operating for at least 5 years since its establishment or business registration.

– In case the foreign trader’s business registration certificate or equivalent paper indicates its term of operation, the remaining term must be at least one year by the date of submission of the application.

– Contents of operation of the branch must comply with Vietnam’s commitments to market access in treaties to which Vietnam is a contracting party and with the business lines of the foreign trader.

– In case contents of operation of the branch fail to comply with Vietnam’s commitments or the foreign trader is not located in a country or territory being member to a treaty to which Vietnam is a contracting party, the establishment of such branch shall be approved by the minister of the line ministry concerned.

>>SEE ALSO:

VIETNAM’S LEGAL FRAMEWORK ON INVESTMENT INCENTIVES

3. Branch establishment procedure for foreign traders in Vietnam

Branch establishment for foreign traders: a thorough guide to regulatory procedures

3.1. Preparing the application dossier

According to Article 12 of Decree 07/2016/ND-CP, a dossier shall be made in one set, comprising:

– An application for a branch establishment license, made according to a form set by the Ministry of Industry and Trade and signed by the foreign trader’s competent representative;

– A copy of the business registration certificate or equivalent paper of the foreign trader;

– The foreign trader’s document on appointment of head of the branch;

– Copies of audited financial statements or documents proving the fulfillment of tax liabilities or financial obligations in the latest fiscal year or equivalent paper issued or certified by a competent agency or organization of the locality where the foreign trader was established proving the actual existence and operation of the foreign trader in the latest fiscal year;

– A copy of the branch’s operation charter;

– A copy of the passport, citizen’s identity card/ identity card (for a Vietnamese) or a copy of the passport (for a foreigner) of the head of the branch;

– Documents on the expected location of the branch’s office, comprising:

•  A copy of the memo of understanding or location rental agreement or documents proving the right to use the location for the branch’s office;
•  A copy of the document on the expected location of the branch’s office under Article 28 of this Decree and relevant laws.

3.2. Submitting the dossier to competent authority

According to Clause 1, Article 13 of Decree 07/2016/ND-CP, a foreign trader may submit its dossier directly, by post or online (if applicable) to the licensing agency.

3.3. Processing the application dossier

Within 3 working days after receiving the dossier, the licensing agency shall check and request the applicant to supplement its dossier if it is neither complete nor valid. The request for supplementation to the dossier shall be made only once during the handling of the dossier.

Except the case specified in Clause 4 of this Article, within 7 working days after receiving a complete and valid dossier, the licensing agency shall grant to the foreign trader a branch establishment license or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason.

Important notice: According to Clause 4, Article 13 of Decree 07/2016/ND-CP,

In the case specified in Clause 5, Article 8 of this Decree and the case in which the establishment of branches has not yet been regulated in any specialized legal document, within 3 working days after receiving a complete and valid dossier, the licensing agency shall send a written request to the concerned line ministry for opinion.

Within 5 working days after receiving the request, the line ministry shall issue a document stating its opinion on the grant of the license.

Within 5 working days after receiving line ministry’s reply, the licensing agency shall grant to the foreign trader a branch establishment license or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason.

>>SEE ALSO:

REPRESENTATIVE OFFICE (RO) ESTABLISHMENT PROCEDURE FOR FOREIGN TRADERS IN VIETNAM

4. Key considerations when setting up a branch for foreign traders in Vietnam

Setting up a branch in Vietnam: Important notes for foreign traders

Concerning the validity periods: According to Clause 1 and 2, Article 9 of Decree 07/2016/ND-CP,

• A branch establishment license has a validity period of up to five years, which must not exceed the remaining validity term of the business registration certificate or equivalent paper of the foreign trader in case such paper indicates a validity term.
• The validity term of a re-granted establishment license of a representative office or branch must be equal to that of the previously granted license.

About the scope of operation: According to Article 31 of Decree 07/2016/ND-CP,

• Branches shall provide services, excluding services in which the establishment of branches is regulated in specialized legal documents.
• Branches engaged in conditional business lines must meet law-prescribed conditions.

Regarding reporting obligation: According to Article 32 of Decree 07/2016/ND-CP,

• Annually, before January 30, branches shall send by post reports on their operations in the preceding year, made according to a form set by the Ministry of Industry and Trade, to the licensing agency.
• Branches shall make reports, supply documents on or explain matters related to their operation at the request of competent state management agencies.

Maintaining operational continuity: According to Clause 5, Article 33 of Decree 07/2016/ND-CP,

If the head of branch is absent from Vietnam for over 30 days without a valid authorization, or if they are unable to perform their duties (e.g., due to death, missing, detention, or loss of civil capacity), the foreign trader shall appoint another head of branch.

>>SEE ALSO:

KEY HIGHLIGHTS OF THE VIETNAMESE LAW ON INVESTMENT 2025

5. Hung Phi Law Firm – Providing comprehensive legal service for foreign traders

Hung Phi Law Firm – Professional legal counsel for foreign traders

Hung Phi Law Firm is a reputable law firm in Vietnam, providing comprehensive legal services in the areas of corporate, commercial and business law, taxation, real estate, and construction. Among these, investment and corporate law are our core practice areas and key strengths.

Our team of lawyers possesses solid professional expertise, and extensive hands-on experience. We deliver reliable legal solutions that enhance investment efficiency and ensure legal certainty in Vietnam’s dynamic and constantly evolving business environment, helping clients achieve their commercial objectives and successful investment outcomes.

Our specialized services for foreign traders include:

Market entry & establishment

– Vietnamese investment policies;

– Investment incentives and supports;

– Sectors, trades and market access conditions applicable to foreign investors;

– Process, conditions, procedures, and structures of investment.

Licensing & regulatory compliance

– Obtaining business licenses for sectors such as trade, logistics, education, and manufacturing,…

– Securing Investment Guidelines Approval, Investment Registration Certificate (IRC), and Enterprise Registration Certificate (ERC), Branch and Representative Office (RO) Registration Certificates;

– Reviewing and standardizing internal legal documents and corporate policies;

– Drafting and revising the company’s charter, internal labor regulations, and internal governance rules.

Corporate & commercial counsel

– Drafting, reviewing business, manufacturing, service, advertising,….contracts;

– Negotiating contract terms and conditions;

– Providing interpretation of the terms of contracts; 

– Reviewing contracts, amending unfavorable clauses;

– Participating in contract dispute resolution;

– Advising on other contractual legal issues.

Dispute resolution & advisory 

We represent clients in negotiations, mediation, and proceedings before competent courts or arbitration. By managing the complexities of dispute resolution, we streamline the legal process to ensure cost-effective protection of your business interests.

>>SEE ALSO:

Vietnam’s Reliable Law Firm for Foreign Businesses