Establishment Of Representative Office

Representative office is a dependent unit of the enterprise, has the task of representing by authorization for the interests of the enterprise and protecting those interests. The enterprise has the right to set up representative offices in the country and abroad. to perform functions and meet business needs of the enterprise in the course of business operations.

I. Advantages and disadvantages of representative offices

Advantage:

According to the above concept, a representative office has the following advantages and disadvantages:

The representative office of the company has no business function. Therefore, they are not allowed to sign contracts, provide services and goods to customers, and cannot directly collect money from customers.

– Representative office has the main function as a liaison office; conduct research activities, provide information, support businesses to access new markets and partners.

The representative office of the company is allowed to register the use of the seal to serve the office’s operations such as signing labor contracts with employees.

– The main purpose of establishing a representative office is that the business wants to conduct market exploration, or promote the brand to provinces outside the province.

Defect:

– Unable to do business at the representative office.

– When changing the head office of a representative office to another district, it is still required to certify tax obligations at the Tax Department where the old address is located.

Important note: From the above regulation, it can be seen that when an enterprise establishes a representative office in another province, it is very limited in terms of business conditions. However, there is a new point according to regulations from 2019, enterprises are allowed to establish business locations in other provinces/cities where the enterprise’s head office is registered. Therefore, it is very convenient for businesses when they want to do business directly with customers (according to the old regulations, enterprises can only establish business locations in the same province/city where their head office is registered).

II. Notes when setting up a representative office

Before setting up a representative office of the company, customers should note the following contents:

+ The name of the representative office of the company: must be written with the letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols;

+ The name of the representative office must bear the name of the enterprise together with the phrase “representative office” in the case of a representative office;

+ The name of the representative office must be written or attached at the head office of the representative office. The name of the representative office is printed or written in a font smaller than the Vietnamese name of the enterprise on transaction papers, documents and publications issued by the representative office.

Address of the representative office’s head office: is the contact point of the representative office in the territory of Vietnam, whose address is determined including house number, niche, alley, alley, street, street or hamlet, hamlets, communes, wards, townships, districts, towns, provincial cities, provinces and centrally run cities; phone number, fax number and email (if any).

A joint-stock company has the right to establish a representative office of the company in the same province as the place of registration of its head office or in other areas in the territory of Vietnam or abroad. An enterprise can set up one or more representative offices in a locality according to administrative boundaries.

Representative offices have the function of representing the company in dealing with customers.

The head of a representative office is an individual permanently residing in the Vietnamese territory and does not fall into one of the following cases:

+ Cadres and civil servants according to the provisions of the law on cadres and civil servants;

+ Officers, non-commissioned officers, professional soldiers, defense workers in agencies and units of the Vietnam People’s Army; professional officers and non-commissioned officers in agencies and units of the Vietnam People’s Public Security;

+ Professional leaders and managers in enterprises with 100% state-owned capital, except those who are appointed as authorized representatives to manage the State’s capital contribution in other enterprises;

+ Minors; persons with restricted civil act capacity or loss of civil act capacity;

+ Persons who are serving prison sentences or are banned from doing business by the Court;

+ Other cases as prescribed by law on bankruptcy.

III. Profile establishment of representative office

To set up a representative office, enterprises need to prepare documents including the following documents:

– Notice of establishment of representative office;

– Minutes of the meeting of the members’ council/shareholder’s council on the establishment of the representative office;

– The decision of the company owner/the decision of the chairman of the members’ council/the chairman of the shareholders’ council on the establishment of the office;

– Decide to appoint the head of a representative office if the head of the representative office is not concurrently the legal representative or a shareholder, member, or owner of the company;

– A copy of the citizen identification card, people’s identity card, passport or other lawful personal identification of the head of the representative office;

– A copy of the business registration certificate of the parent company;

– Authorization contract or power of attorney for an individual/representative organization to establish a representative office;

 IV. Service of establishing representative office of MVA Law firm

With the goal throughout the operation process is “bringing the greatest benefit to customers”, MVA Law Firm always tries its best to satisfy every client when using our services. About the time to register the establishment of a representative office, we will proceed to register the establishment of a representative office as quickly as possible for customers. Moreover, MVA Law has a team of experts who have many years of experience in this field, so the dossier is prepared accurately, so the possibility of successful registration is very high, saving effort and registration time.

When you need guidance on the procedures for setting up a representative office of a client company, please contact us – MVA Law Firm for advice on related issues such as:

– Consulting on procedures for setting up a representative office of the company;

– Guide or assist enterprises in drafting and setting up representative offices in accordance with regulations;

– Support the necessary procedures after establishing the representative office of the company such as: engrave the seal sample of the representative office of the company; Announcement of seal sample of the representative office of the company; open a representative office account of the company;

– Receive authorization and on behalf of customers to carry out procedures for registration of establishment of a representative office of the company with a competent State agency;

– Receive results and hand them over to customers;

– Incentives for customers for the next service.

Some things to do after setting up a representative office

– Pay license tax for representative office: 1,000,000 VND/year

– Hanging the sign at the head office of the representative office;

– Sign labor contracts with employees working at the office;

– Register for social insurance and health insurance for employees.