Requirements for grant of Licenses for Establishment of branches in Vietnam

Requirements for grant of Licenses for Establishment of branches in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Requirements for grant of Licenses for Establishment of branches in Vietnam

According to Article 8 of Decree 07/2016/ND-CP, foreign businesses shall be granted Licenses for Establishment of branches if they satisfy the following requirements:

- The foreign trader is incorporated and registers for doing business in accordance with provisions of laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories;

- The foreign trader has come into operation for at least 05 year from the date of establishment or registration;

- The Certificate of Business registration or equivalent document is valid for at least 01 more year from the date of submission of the application;

- The scope of operation of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign trader;

- Where the businesses of the representative office is inconsistent with Vietnam’s Commitments or the foreign trader is not located in one of countries or territories being parties to treaties to which Vietnam is a signatory, the representative office can be established only if they obtain a prior consent of the relevant Minister for establishment of the representative office.

2. Effective periods of Licenses for Establishment of branches or representative offices in Vietnam

Pursuant to Article 9 of Decree 07/2016/ND-CP, effective periods of Licenses for Establishment of branches or representative offices are as follows:

- The License for Establishment of a representative office or branch shall be valid for 05 years but not exceeding the remaining effective period of the Certificate of Business Registration or the equivalent (for documents having expiry date);

- The effective period of an extended License for Establishment of the representative office or branch shall be equal to that of the current license.

- The extension of the license or establishment of the representative office or branch shall comply with clause 1 Article 9 of Decree 07/2016/ND-CP.

3. Applications for Licenses for Establishment of branches of foreign traders in Vietnam

According to Article 12 of Decree 07/2016/ND-CP, applications for Licenses for Establishment of branches are as follows:

- An application for the license for establishment of the branch of a foreign trader shall include :

= An application form for license for establishment of the branch using the form promulgated by the Ministry of Industry and Trade and signed by a competent representative of the foreign trader.

= Copies of the Certificate of Business Registration or equivalent documents of the foreign trader;

= A letter of appointment of the head of the branch;

= Copies of audited financial statements or certificates of fulfillment of tax liabilities or financial obligations of the last fiscal year or equivalent documents as proof of existence and operation of the foreign trader issued or certified by competent authorities where such foreign trader is established;

= Copies of the branch charter;

= Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch;

= Documents on the expected location of the branch including:

== Copies of memorandum of understanding (MOU) or leasing agreements or documents as proof of the right to use a location as the branch;

== Copies of documents on the expected location of the branch under Article 28 hereof and provision of related laws.

- Documents specified in points b, c, d and dd, Article 1 of Decree 07/2016/ND-CP (for the head of the branch being foreigners) shall be translated into Vietnamese and certified true in accordance with laws of Vietnam.

Documents specified in point b, clause 1 of Article 12 of Decree 07/2016/ND-CP shall be certified or legalized by overseas diplomatic missions or Consulates of Vietnam in accordance with laws of Vietnam.

4. Procedures for Licenses for Establishment of branches of foreign traders in Vietnam

Procedures for Licenses for Establishment of branches of foreign traders are specified in Article 13 of Decree 07/2016/ND-CP as follows:

- 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).

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

- Apart from those specified in clause 4 of Article 13 of Decree 07/2016/ND-CP, the licensing agency shall send the applicant a written notification of whether the license or establishment of the branch is granted or not within 07 working days from the date of receipt of the valid application. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

- For those specified in clause 5, Article 8 hereof and the establishment of branches that has not been prescribed 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 or not they approve for the application for the License for Establishment of the branch.

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 License for Establishment of the representative office is granted. In case of rejection, the licensing agency shall send the applicant a written notice in which reasons for rejections shall be specified.

Ho Quoc Tuan

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