In the current process of international integration, businesses tend to develop not only within the territory of one country or region but also desire to expand their branches to many countries and reach out globally. These businesses, when wishing to establish additional branches to conduct business activities in different countries, must comply with the laws of the host country. For foreign traders operating in Vietnam, the establishment of a branch requires meeting sufficient legal conditions, and each foreign trader is only allowed to establish a maximum of one branch within the scope of a single province or centrally-goverrun city.
1. Conditions for granting a license to establish a branch of a foreign trader
A foreign trader shall only be granted a Branch Establishment License if they meet the following conditions:
- The foreign trader is established and business registered in accordance with the laws of a country or territory that is a party to an International Treaty to which Vietnam is a member, or recognized by the laws of such countries or territories;
- The foreign trader has been operating for at least 05 years, from the date of establishment or registration;
- In cases where the business registration certificate or equivalent document of the foreign trader specifies an operating term, that term must be at least 01 year from the date of application submission;
- The scope of activities of the Branch must be consistent with Vietnam’s market opening commitments in international treaties to which Vietnam is a member and consistent with the business lines of the foreign trader;
- If the scope of activities of the Branch is not consistent with Vietnam’s commitments or the foreign trader is not from a country or territory that is a party to an international treaty to which Vietnam is a member, the establishment of the Branch must be approved by the Minister of the specialized management Ministry.
The conditions in points 4 and 5 above are new conditions consistent with international treaties to which Vietnam is a member signed after the promulgation of the Commercial Law 2005. These conditions aim to ensure that the establishment of foreign traders’ branches complies with the general conditions under the international commitments to which Vietnam is a member.
2. Application dossier for establishing a branch of a foreign trader
- Application for a Branch Establishment License according to the form of the Ministry of Industry and Trade, signed by the authorized representative of the foreign trader;
- Copy of the Business Registration Certificate or equivalent document of the foreign trader;
- Written appointment/nomination of the head of the Branch by the foreign trader;
- Copy of the audited financial report or document confirming the fulfillment of tax or financial obligations in the most recent fiscal year, or equivalent document issued or confirmed by a competent authority or organization where the foreign trader was established, proving the existence and operation of the foreign trader in the most recent fiscal year;
- Copy of the Branch’s operating charter;
- Notarized copy of the passport or ID card or citizen identification card of the head of the Branch;
- Documents concerning the proposed location of the Branch’s headquarters, including: Copy of the memorandum of understanding or lease agreement for the premises, or copy of documents proving the trader’s right to exploit and use the premises for the Branch’s headquarters; Copy of documents concerning the specific proposed location of the Branch’s headquarters: The foreign trader’s branch must comply with Vietnamese law on conditions for security, order, labor safety and hygiene, and other conditions prescribed by law. The Branch is not allowed to lend or sublease its headquarters.
Foreign traders shall submit the application dossier directly, by post, or online (if eligible) to the Licensing Authority (Ministry of Industry and Trade). Within 03 working days from the date of receiving the dossier, the Licensing Authority shall inspect it and request supplementary documents if the dossier is incomplete or invalid. Requests for supplementary documents shall be made only once throughout the dossier processing period.
3. Term of the Branch Establishment License
The Branch Establishment License of a foreign trader is valid for 05 years but shall not exceed the remaining term of the Business Registration Certificate or equivalent document of the foreign trader, in cases where such document specifies a term.
4. Conditions for the head of the Branch
- The head of the Branch must be responsible to the foreign trader for their own activities and those of the Branch within the scope authorized by the foreign trader.
- The head of the Branch must be responsible for their activities in cases where they perform activities outside the scope authorized by the foreign trader.
- The head of the Branch must authorize another person in writing to exercise the rights and obligations of the head of the Branch in accordance with the law when leaving Vietnam. This authorization must be approved by the foreign trader. The head of the Branch remains responsible for the exercise of the authorized rights and obligations.
- In case the authorization period specified in point 3 above expires and the head of the Branch has not returned to Vietnam and no other authorization has been made, the authorized person has the right to continue exercising the rights and obligations of the head of the Branch within the authorized scope until the head of the Branch returns to work at the Branch or until the foreign trader appoints another person as the head of the Branch.
- In case the head of the Branch is absent from Vietnam for more than 30 days without authorizing another person to exercise the rights and obligations of the head of the Branch, or dies, is missing, is in temporary detention, is sentenced to prison, or has civil capacity restricted or lost, the foreign trader must appoint another person as the head of the Branch.
- The head of a foreign trader’s Branch shall not concurrently hold the following positions:
- Head of the Representative Office of another foreign trader;
- Head of the Representative Office of the same foreign trader;
- Legal representative of an economic organization established under Vietnamese law.
5. Competence to issue Branch Establishment Licenses
Traders shall submit applications for establishing branches of foreign traders in Vietnam to the Ministry of Industry and Trade.
6. Disclosure of Branch information
Within 15 days from the date of issuance, re-issuance, adjustment, extension, and revocation of the Branch Establishment License, the Licensing Authority shall publish the following information on its website:
- Name and headquarters address of the Branch;
- Name and headquarters address of the foreign trader;
- Head of the Branch;
- Number, date of issue, term of the Branch Establishment License, Licensing Authority;
- Scope of activities of the Branch;
- Date of re-issuance, adjustment, extension, and revocation of the Branch Establishment License.
