Regulations on representative office of a foreign trader in Vietnam

Regulations on representative office of a foreign trader in Vietnam (Internet image)

1. Vietnam-based representative office of a foreign trader

Clause 6, Article 3 of the Commercial Law 2005 stipulates the vietnam-based representative office of a foreign trader as follows:

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

2. Foreign traders conducting commercial activities in Vietnam

Article 16 of the Commercial Law 2005 stipulates foreign traders conducting commercial activities in Vietnam as follows:

- Foreign traders mean traders established and making their business registrations according to the provisions of foreign laws or recognized by foreign laws.

- Foreign traders are entitled to set up their representative offices or branches in Vietnam; to establish in Vietnam foreign-invested enterprises in the forms provided for by Vietnamese law.

- Vietnam-based representative offices and branches of foreign traders have the rights and obligations specified by Vietnamese law. Foreign traders shall be held responsible before Vietnamese law for all activities of their Vietnam-based representative offices and branches.

- Foreign-invested enterprises established in Vietnam by foreign traders according to the provisions of Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a contracting party shall be regarded as Vietnamese traders.

3. Rights of representative offices in Vietnam

Pursuant to Article 17 of the Commercial Law 2005 stipulating the rights of representative offices of foreign traders in Vietnam as follows:

- To operate for the purposes, within the scope and duration stipulated in their establishment licenses.

- To rent offices, rent and purchase equipment and facilities necessary for their operations.

- To recruit Vietnamese and expatriate employees to work for them according to the provisions of Vietnamese law.

- To open accounts in foreign currencies or foreign currency-based Vietnam dong at banks licensed to operate in Vietnam, and to be allowed to use those accounts solely for their operations.

- To have seals bearing their names according to the provisions of Vietnamese law.

- To have other rights as defined by law.

4. Obligations of representative offices in Vietnam

Pursuant to Article 18 of the Commercial Law 2005, the obligations of representative offices of foreign traders in Vietnam are as follows:

- Not to directly conduct profit-generating activities in Vietnam.

- To conduct commercial promotion activities within the scope permitted by this Law.

- Not to enter into contracts, not to amend or supplement contracts already entered into by foreign traders, except where chief representatives obtain valid letters of authorization from foreign traders or other cases specified in Clauses 2, 3 and 4, Article 17 of this Law.

- To pay taxes, fees and charges, and fulfil other financial obligations provided for by Vietnamese law.

- To report on their operations according to Vietnamese law.

- To have other obligations as defined by Vietnamese law.

Ngoc Nhi

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