What is a representative office of a foreign securities company in Vietnam? Rights and obligations of a representative office of a foreign securities company in Vietnam?
- What is a representative office of a foreign securities company in Vietnam?
- What are the conditions for a foreign securities company or fund management company to establish a representative office in Vietnam?
- Rights and obligations of a representative office of a foreign securities company in Vietnam?
What is a representative office of a foreign securities company in Vietnam?
Pursuant to the provisions of Clause 5, Article 2 of Circular No. 97/2020/TT-BTC, “representative office” means an affiliated unit of a foreign securities company or foreign fund management company that is not a juridical person and is established under the law of Vietnam.
At the same time, “chief representative” means the head of a representative office of a foreign securities company or foreign fund management company in Vietnam.
What is a representative office of a foreign securities company in Vietnam? Rights and obligations of a representative office of a foreign securities company in Vietnam? (Image from the Internet)
What are the conditions for a foreign securities company or fund management company to establish a representative office in Vietnam?
Pursuant to the provisions of Article 78 of the 2019 Law on Securities of Vietnam, a foreign securities company or foreign fund management company may establish a representative office in Vietnam when:
- It is licensed and has been lawfully operating in this home country;
- The home country’s licensing authority and State Securities Commission has entered into a mutual or multilateral agreement on information exchange, management, inspection, supervision of securities activities and securities market, or the company has been managing investment funds in Vietnam; the remaining operating period is at least 01 years.
In addition, a representative office of a securities company in Vietnam must satisfy the conditions specified in Clauses 2 and 3, Article 78 of the 2019 Law on Securities of Vietnam as follows:
Representative offices in Vietnam of foreign securities companies and fund management companies
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2. The representative office in Vietnam of a foreign securities company or fund management company has one, some or all of the following activities:
a) Communication office and market research;
b) Facilitate development of projects for cooperation in securities and securities market in Vietnam;
c) Expedite and supervise implementation of agreements between the company and Vietnamese business organizations;
d) Expedite and supervise execution of the projects in Vietnam funded by the company.
3. Representative offices in Vietnam of foreign securities companies and foreign fund management companies must not trade securities.
Thus, representative offices of securities companies and foreign fund management companies in Vietnam must not trade securities.
In addition, within 15 days from the date of its official operation, the representative office shall provide State Securities Commission with a notice of operation made according to the form in Appendix V enclosed with Circular No. 97/2020/TT-BTC and documents certifying its completion of information disclosure obligations as prescribed in the Law on Securities.
Rights and obligations of a representative office of a foreign securities company in Vietnam?
Pursuant to the provisions of Clause 2, Article 10 of Circular No. 97/2020/TT-BTC on the rights and obligations of representative offices of foreign securities companies in Vietnam as follows:
- It is allowed to open a foreign currency account or VND account converted from a foreign currency at a commercial bank that is licensed to provide foreign exchange services in Vietnam and shall only use this account for its operations. Opening, use and closure of an account by the representative office shall comply with regulations of relevant laws;
- It is allowed to recruit both Vietnamese and foreign persons to work at its premises in accordance with regulations of the law of Vietnam. Within 30 days from the date of recruitment of foreign persons to work at the representative office in Vietnam, the parent company or the representative office (with the authorization of the parent company) shall give a notification of such recruitment, enclosed with written approval given by competent authorities as prescribed in the Labor Code, to State Securities Commission;
- It has its own seal under the law of Vietnam and shall only use this seal on transaction documents made within the ambit of rights and functions of the representative office;
- It shall only perform operations according to the contents and within the period specified in the certificate of registration of operation of a representative office; shall not trade securities in Vietnam; shall not manage assets and investments for investors, including investments made by the parent company in Vietnam, and perform other securities trading activities in Vietnam;
- It shall perform other rights and obligations as regulated by the laws.
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