What is time limit for extension of Licenses for establishment of foreign representative offices before the expiration of these licenses in Vietnam?

1. What is time limit for extension of Licenses for establishment of foreign representative offices before the expiration of these licenses in Vietnam?

In Article 23 of Decree No. 07/2016/ND-CP stipulating procedures for extension of Licenses for Establishment of branches or representative offices, as follows:

1. At least 30 days prior to the expiry of the license, the applicant shall apply for extension of the License for Establishment of the branch or representative office.

2. The foreign trader shall submit their application to the licensing agency where the representative office is expected to be located directly or by post or online (where applicable).

3. Within 03 working days from the date of receipt of the application, the licensing agency shall examine such application and request the applicant to complete the application (if the application is incomplete) . The request for supplementation to the application shall be made only once during the processing of the application.

4. Within 05 working days from the date of receipt of the valid application, the licensing agency shall grant an extension of the license or establishment of the representative office to the applicant. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

5. With respect to applications for extension of the License for Establishment of representative offices or branches that have yet to be governed by specialized legislative documents, the licensing agency shall submit a written request for directions to the relevant Ministry within 03 working days from the date of receipt of the valid application. Within 05 working days from the date of receipt of the request for directions from the licensing agency, the relevant Ministry shall submit the licensing agency a written notification of whether they approve for the application for extension of the License for Establishment of the branch or representative office. Within 05 working days from the date of receipt of the notification from the relevant Ministry , the licensing agency shall send the applicant a written notice of whether the extension is granted or not. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

According to this Article, when your license for establishment of foreign representative office is about to expire, you must submit an application to renew your license for establishment of foreign representative office within at least 30 days before that license expires.

2. What are penalties for failing to carry out procedures for extension of Licenses for Establishment of foreign representative offices in Vietnam? 

Pursuant to Article 67 of Decree 98/2020/ND-CP stipulating Violations against regulations on establishment and operation of representative offices of foreign traders in Vietnam (hereinafter referred to as “representative offices”), whereby:

1. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed for committing one of the following violations:

a) Providing false information in the application for issuance, re-issuance, modification or renewal of a license for establishment of representative office;

b) Failing to openly post the shutdown of a representative office as prescribed.

2. A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed for committing one of the following violations:

a) Failing to have premises for locating the representative office or sub-leasing the premises of the representative office or operating at a location other than the one specified in the license for establishment of representative office;

b) Failing to submit periodical reports or submitting false reports on operation of the representative office to the competent licensing authority;

c) Failing to submit reports or provide documents or explanations about issues concerning operation of the representative office at the request of competent authorities;

d) Failing to carry out procedures for modification or re-issuance of the license for establishment of representative office in cases prescribed by law;

dd) Making interlineations, erasure or alteration of contents of the issued license for establishment of representative office.

3. A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed for committing one of the following violations:

a) Forcing documents included in the application for issuance, re-issuance, modification or renewal of the license for establishment of representative office, if not liable to criminal prosecution;

b) Operating against the license for establishment of representative office;

c) The head of the representative office of a foreign trader is also the head of a branch of that trader or of another foreign trader in Vietnam;

d) The head of the representative office of a foreign trader is also the legal representative of that trader;

dd) The head of the representative office is also the legal representative of an economic organization established under the law of Vietnam;

e) Hiring, borrowing or leasing, lending the license for establishment of representative office.

4. A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed for committing one of the following violations:

a) Continuing operation after the foreign trader has completed procedures for termination of operation;

b) Continuing operation after the license for establishment of representative office has been revoked by competent authorities or the expired license is not granted renewal.

5. Additional penalties:

a) The exhibits of the violation prescribed in Point dd Clause 2 of this Article shall be confiscated;

b) The license for establishment of representative office shall be suspended for a fixed period of 01 – 03 months in case of commission of the violation in Point b, c, d, dd or e Clause 3 of this Article.

6. Remedial measure:

The violating entity is compelled to return any benefits illegally obtained from the commission of the violation in Point e Clause 3 of this Article.

According to Clause 4, Article 4 of Decree 98/2020/ND-CP as amended by Point b, Clause 1, Article 3 of Decree 17/2022/ND-CP, the fine levels are as follows:

4. Fines:

a) Maximum fine in commercial sector shall be VND 100.000.000 for individual offenders and VND 200.000.000 for organization offenders; maximum fine for manufacturing and trading of counterfeits or prohibited goods and consumer’s right protection shall be VND 200.000.000 for individual offenders and VND 400.000.000 for organization offenders;

b) Fines mentioned under Chapter II hereof apply to administrative violations committed by individual offenders, except for administrative violations under Article 33, Article 35, Article 68, Article 70, Clauses 6, 7, 8, and 9 Article 73, Clauses 6, 7, and 8 Article 77 hereof. Organization offenders shall be met with twice the fines applicable to individual offenders.

Thus, when an individual fails to carry out procedures for modification or re-issuance of the license for establishment of representative office in Vietnam, he or she may be fined from VND 10,000,000 to VND 20,000,000. For organizations, the fine will be from 20,000,000 to 40,000,000 VND.

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