Learn the procedures for opening a foreign company branch in Vietnam

In such open market conditions, Vietnam in general and provinces in particular are also receiving a lot of investment from abroad. However, in addition to language and cultural disagreements, foreign companies investing in Vietnam also encounter legal barriers right from the first step of setting up a representative office or establishing a branch. So to better understand the current procedures for establishing a branch of a foreign company in Vietnam, we invite you to read the article below.Yongxia we.

1. What is a foreign company branch?

1.1. Definition of "branch" of a foreign company

According to the provisions of Clause 1, Article 44 of the Enterprise Law 2020: “A branch is a functional unit dependent on the enterprise, responsible for implementing a series or part of the enterprise's features, including the authorized representative feature. The branch's commercial business lines must be consistent with the enterprise's commercial business lines and lines’’.
Thus, a foreign company's branch is a dependent functional unit of the foreign company, responsible for implementing a series or part of the business's features, including the authorized representative feature. . The branch's commercial business lines must be consistent with the enterprise's commercial business lines and lines

1.2. Characteristics of foreign company "branches".

The first, branches of foreign companies can be established in many places, located in central provinces and cities different from the province or city where the business is headquartered, so buyers can go to those places. branch address to implement contracts or make transaction payments without having to go directly to the company headquarters address.

Monday, branches of foreign companies are allowed to operate entertainment and commercial businesses like a company, and have their own seal, so strategic partners and buyers can completely sign contracts with the branch.

Tuesday, the business lines of the foreign company's branch must match the business lines of the foreign company. Branches are not allowed to register professions that the company has not registered.

2. Conditions for opening a branch of a foreign company

According to the provisions of Article 8 of Decree 07/2016/ND-CP, a foreign company will be granted a License to establish a Branch in Vietnam if it meets the following conditions:

+ Foreign companies are established and registered for business according to the regulations of countries and territories participating in international treaties to which Vietnam is a member/recognized by the laws of these countries and territories;

+ The foreign company has been operating for at least 5 years from the date of establishment/registration;

+ If the Business Registration Certificate (paper of equivalent value) stipulates an operating term, that term must be at least 01 year from the date of submission of the application;

+ The branch's operational content must be consistent with Vietnam's market opening commitments in international treaties to which Vietnam is a member and at the same time be consistent with the business lines of foreign traders; If it is not consistent with the commitments of Vietnam/foreign companies that do not belong to countries or territories participating in international treaties to which Vietnam is a member, the opening of a branch must be approved by the Minister of Management. specialized management.

3. Authority to grant licenses to establish branches of foreign companies in Vietnam

According to Article 6 of Decree 07/2016/ND-CP: "The Ministry of Industry and Trade shall issue, re-issue, control and adjust, extend and confiscate Branch Establishment Licenses and terminate Branch operations in cases where the establishment of a Branch has not been stipulated in the document. specialized legal regulations".

Thus, the authority to grant a license to establish a branch of a foreign company in Vietnam belongs to the Ministry of Industry and Trade.

4. Order and procedures for opening a foreign company branch in Vietnam

According to Article 12 and Article 13 of Decree 07/2016/ND-CP, the order and procedures for granting a License to establish a branch of a foreign company in Vietnam are prescribed as follows:

Step 1: Foreign companies submit applications directly/by post/online (if eligible) to the Ministry of Industry and Trade.

Step 2: Process documents and return results

- Within 03 working days from the date of receiving the dossier, the Ministry of Industry and Trade shall check and request additional documents if the dossier is not complete and valid. (can only be done at most once during the application processing process).
- Within 07 working days from the date of receipt of complete and valid documents, the Licensing agency shall issue/not issue a Branch Establishment License to the foreign trader. In case of refusal to grant a permit, there must be a document clearly stating the reason. If approval from the specialized management ministry is required, the branch establishment license-granting agency shall send a written request for comments within 03 days from the date of receipt of the valid dossier.
- Within 05 working days from the date of receipt of the document from the licensing agency, the specialized management ministry shall issue a document clearly stating its agreement or disagreement to grant a license to establish a branch.
- Within 05 working days from the date of receipt of the document from the specialized management ministry, the licensing agency shall issue or not issue a branch establishment license to the foreign trader. In case of refusal to grant a permit, there must be a document clearly stating the reason.