The branch of the company is a dependent unit of the enterprise and is responsible for implementing all or part of the functions of the enterprise, including the function of authorized representative. The business lines of the branch must be suitable to the business lines of the enterprise.
Foreign business entities registered as companies under foreign laws shall first apply for recognition as a foreign company and its establishment of a branch office in Vietnam with the Department of Planning and Investment (DPI).
Advantage of Branch Office
The branch has the right to sign economic contracts on behalf of the branch, affixing a branch seal.
Can operate independently in other areas/region of the company.
Disadvantage of Branch Office
The foreign traders have been operating for at least 5 years from the date of establishment or registration.
The license for establishing a branch of a foreign trader has a maximum term of 5 years.
If the enterprise registration certificate of the foreign trader mentions about the limitation of period of operating, the remaining time must be at least 01 year.
Branches often experience difficulty opening bank account from some international banks.
The head of the branch of a foreign trader must not concurrently hold the following positions:
- The head of the Representative Office of another foreign trader;
- The head of the Representative Office of the same foreign merchant;
- The legal representative of an economic organization is established in accordance with the laws of Vietnam.
Procedure for setting up a Branch Office
The foreign investor should first apply form to the Ministry of Industry and Trade.
If the branch plan to implement the export/import activities, it should submit the dossier to the Department of Industry and Trade for an advance check on its type of goods, and then apply to that Bureau for registration as an export/import business. A company that is engaged in the manufacturing or processing of goods must apply for a factory registration with the local county or city government where the factory is situated. If the factory is located in an export processing zone, science park, or agricultural biotechnology park, the company should apply for registration with the administrative agency in charge of that zone or park.