Setting up a Representative Office (RO) remains one of the most preferred forms of commercial presence for foreign entities in Vietnam. This serves as a vital link for real-time market insights and networking, allowing businesses to quickly identify and capture new partnership opportunities without direct involvement in commercial operations. 

However, there are specific legal requirements and procedures that must be fulfilled to set up a representative office in Vietnam. For foreign traders, establishing a representative office involves stringent documentation and rigorous administrative hurdles.

In this guide, Hung Phi Law Firm outlines the Representative Office (RO) establishment procedure for foreign traders in Vietnam, providing a clear and practical roadmap to help clients navigate the registration process efficiently and in full compliance with Vietnamese law.

1. Overview of the representative office in Vietnam

Representative office (RO): A strategic overview

1.1. What is a representative office?

According to Clause 2 Article 44 of the Vietnamese Law on Enterprises 2020, a representative office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, represents and protects the enterprise’s interests. A representative office shall not do business.

1.2. The merits of setting up a representative office in Vietnam

Establishing a (RO) minimizes administrative burdens and regulatory complexities, with these key advantages:

– Simplified tax & reporting:

As a non profit-generating entity (not permitted to issue VAT invoices or sign sales contracts), a representative office’s tax obligations are minimal:

• No corporate income tax (CIT): Since a representative office is not permitted to generate direct revenue from commercial activities, it is not subject to corporate income tax.

• No value added tax (VAT): Since it does not perform taxable sales, no VAT liability arises from its activities.

In this case, the primary compliance requirement is personal income tax (PIT) and social insurance for its employees.

– Simple & fast licensing: Setting up a representative office is significantly faster and easier than incorporating a subsidiary, offering a capital-free setup with minimal administrative burden.

– Simplified closure process: Closing a representative office is usually simpler and quicker than liquidating a company, resulting in lower legal and financial exposure if market entry goals are not met. 

– Brand presence and visibility: Establishing a representative office allows the parent company to maintain an official local presence, effectively building brand awareness and credibility with customers, partners, and regulators.

>>SEE ALSO:

Enterprise Registration Certificate (ERC) in Vietnam – Procedures for Foreign Investors

2. Conditions for foreign traders setting up a representative office (RO)

Statutory criteria for representative office (RO) setup

According to Article 7 of Decree 07/2016/ND-CP, a foreign trader may be licensed to establish a representative office 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 one year 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 representative office must comply with Vietnam’s commitments in treaties to which Vietnam is a contracting party.

– In cases where the representative office’s activities fall outside of Vietnam’s international commitments—or the parent company’s home country is not a treaty member—registration is not automatic. Instead, it is subject to approval by the Minister of the relevant line ministry.

>>SEE ALSO:

VIETNAM’S LEGAL FRAMEWORK ON INVESTMENT INCENTIVES

3. Representative office (RO) establishment for foreign traders

Step-by-step representative office (RO) setup for foreign traders 

3.1. Preparing the application dossier

According to Article 10 of Decree 07/2016/ND-CP, a dossier of application for representative office establishment licenses shall be made in one set, comprising:

– An application for a representative office 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 representative office;

– 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 passport, people’ identity card or citizen’s identity card (for a Vietnamese) or a copy of the passport (for a foreigner) of the head of the representative office;

– Documents on the expected location of the representative office, comprising:

• A copy of the memo of understanding or location rental agreement or a document proving the right to use the location for opening the representative office;
• A copy of the document on the expected location of the representative office under Article 28 of Decree 07/2016/ND-CP and relevant laws.

3.2. Submitting the dossier to the competent authority

A foreign trader may submit its dossier directly, by post or online (if applicable) to the licensing agency of a locality where its representative office is planned to be located. (Clause 1, Article 11 of Decree 07/2016/ND-CP). 

3.3. Reviewing & processing the application

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. (Clause 2, Article 11 of Decree 07/2016/ND-CP). 

Except the case specified in Clause 4 of Article 11 of Decree 07/2016/ND-CP, within 7 working days after receiving a complete and valid dossier, the licensing agency shall grant to the foreign trader a representative office establishment license or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason. (Clause 3, Article 11 of Decree 07/2016/ND-CP).

Important note:

According to Clause 4, Article 11 of Decree 07/2016/ND-CP,

• In the case specified in Clause 5, Article 7 of Decree 07/2016/ND-CP and the case in which the establishment of representative offices 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 of the licensing agency, the line ministry shall issue a document stating its opinion on the grant of the license. Within 5 working days after receiving the line ministry’s reply, the licensing agency shall grant to the foreign trader a representative office establishment license or refuse to grant it. In case of refusal, the licensing agency shall issue a document clearly stating the reason.

>>SEE ALSO:

VIETNAM’S LEGAL FRAMEWORK ON INVESTMENT INCENTIVES

4. Key regulatory considerations for representative offices

Essential notes on representative offices (RO)

– Scope of activities: As a non-commercial entity, a representative office’s function is limited to market research, liaison activities, and promoting the parent company’s interests. It is not permitted to generate direct revenue, issue invoices, or sign commercial contracts (unless specifically authorized via a Power of Attorney).

– Post-licensing compliance:

Establishing the office is only the first step. Ongoing obligations include:

• Annual reporting: Annually, before January 30, representative offices 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. (Clause 1, Article 32 of Decree 07/2016/ND-CP). 

• Labor compliance: Registering employees, paying social insurance, and managing personal income tax (PIT) filings for both local and foreign staff.

– License validity: A representative office license has a validity period of up to five years and is renewable. (Article 9 of Decree 07/2016/ND-CP).

– Head of the representative office’s requirements:

• In case the head of the representative office is absent from Vietnam for more than 30 days, they must authorize another person to exercise their rights. Otherwise, the foreigner trader shall appoint another head for the representative office. (Clause 5, Article 33 of Decree 07/2016/ND-CP). 
• Generally, the head of a representative office should not concurrently hold a leadership position in a branch of the same or another foreign trader. Furthermore, they should not serve as the Legal Representative of the same or other foreign traders, nor of any economic organization established under Vietnamese law to avoid potential conflict of interest and tax complications. (Clause 6, Article 33 of Decree 07/2016/ND-CP).

>>SEE ALSO:

KEY HIGHLIGHTS OF THE VIETNAMESE LAW ON INVESTMENT 2025

5. Comprehensive legal services for foreign traders in Vietnam

End-to-end legal support for foreign traders

Hung Phi Law Firm is a trusted law firm in Vietnam, specializing in investment. Our investment lawyers combine deep local insights with a practical understanding of Vietnam’s business landscape. We deliver tailored, high-impact solutions that safeguard clients’ interests and optimize their investment performance.

Our core 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.

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Vietnam’s Reliable Law Firm for Foreign Businesses

The above information outlines Representative office (RO) establishment procedure for foreign traders in Vietnam, as provided by Hung Phi Law Firm to our clients.

Should you have any questions regarding this matter or require legal advice tailored to your specific case, please do not hesitate to contact the lawyers of Hung Phi Law Firm for timely support and professional consultation.

Contact Information:

Hung Phi Law Firm

Phone: (+84) 962 75 28 38

Email: luathungphi@gmail.com

Website: hungphi.vn

Sincerely,