In the era of international economic integration, many multinational companies are in the need of expanding their firms worldwide. With this trend, the needs of finding appropriate representative offices in Vietnam has been significantly risen over the last 12 years. The attractive benefits of setting up representative offices makes it easy for those companies to acquire shares in Vietnamese Enterprise through M&A activity.
In response to this urgent needs, Vietnamese Commercial Law 2005 and Decree 07/2016 has been published to help foreign entities to legally establish an office in Vietnam.
Advantages of setting up a representative office in Vietnam
Market research is the first and foremost step when a company wants to settle down at a new market, and representative market is one of the finest solutions to this matter, get them these first steps: understanding the market, undertaking research on clients, due diligence on their business partners distributors, monitoring the performance of buyers and get familiar with Vietnamese ethics.
A representative office in Vietnam has been considered as a prime option both due to cost and time:
- An effective tool to promote commercial activities
- Seeking for new local partnerships
- Widening networking
- Increasing opportunities to expand business market in Vietnam
Benefits of a representative office in Vietnam:
- Recruiting Vietnamese employees or foreign employees whom have work permit in Vietnam, then temporary residence card in Vietnam.
- Opening bank accounts in foreign currencies or VND at commercial banks.
- Using those accounts solely for their operations.
- According to the law of Vietnam, the establishment of representative offices does not requires investor’s capital.
- Following more simple procedures for licensing in Vietnam than establishing entity in Vietnam
- Operating strictly in accordance with the purposes, scope and duration stated in the license for establishment of such representative office.
- Renting offices and leasing or purchasing the equipment and facilities necessary for the operation of the Representative Office.
Obligations/ Challenges of representative offices in Vietnam
- Required capital contributions per business plan, ranging from USD 50k to millions of USD.
- Proving fulfillment of the financial responsibility in their country.
- Providing audited financial statements
- For getting representative office operation certificates, company should show fulfillment of tax liabilities or financial obligations of the last fiscal years.
- Showing equivalent documents as proof of existence and operation of foreign trader issued by competent authorities.
Such a giant potential market, as well as current rapid reform in administrative procedures, Vietnamese government has made it possible to encourage foreign traders doing their business in Vietnam, hence setting up of representative offices is an optimal method to thoroughly consider for market research, trade promotion and penetration into Vietnamese market successfully.
If you already get to know thoroughly all about laws, legal terms and contracts, yet still struggle finding the most suitable places for your office, CirCO Co-working Space is here to meet your expectation.
Having more than 5 years of experiences in building startup ecosystem, facing many obstacles and changing in Vietnam, also being one of the most community-oriented Coworking Space in Vietnam, CirCO Coworking space in Ho Chi Minh City – consisting of high quality space and private studios for rent will definitely appeal you, consistently make valuable and important contributions to your company.
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- Secured lockers for your precious assets (For master package & private studio)
- CirCO 1 – 1st floor, 384 Hoang Dieu Str., District 4, HCMC
- CirCO 2 – 9 Nguyen Trai Str, District 1, HCMC
HOTLINE: +84 932484468