Guidance of Representative Office Setting-up in Vietnam | ANT Lawyers

The establishment of representative office of foreign traders in Vietnam have to follow the procedures as guided by the Commercial Law in Vietnam and the related decrees providing instructions of the law.

Preparation of dossiers for establishment of representative offices includes:

An application form for License for Establishment of the representative office 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 (shall be certified or legalized by overseas diplomatic missions or Consulates of Vietnam under laws of Vietnam);

A letter of appointment of the head of the representative office (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam);

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 (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam);

Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the representative office (shall be translated into Vietnamese and certified true in accordance with laws of Vietnam.);

Documents on the expected location of the representative office including:

Copies of memorandum of understanding or leasing agreements or documents as proof of the right to use a location as the representative office;

Copies of documents on the expected location of the representative office.

Procedures for granting of Licenses for Establishment of representative offices:

Foreign traders submit applications directly or via post or online (if applicable) to the Department of Industry and Trade of the locality where the representative office is to be located.

Within 03 working days from the date of receipt of the dossier, the Department of Industry and Trade shall examine and request the supplement if the dossier is incomplete and invalid. Requests for additional records are made at most once during the processing of applications.

Except for the establishment of a representative office have to submit for directions of the relevant Ministry of Industry, within 07 working days from the date of receipt of a complete and valid application the Department of Industry and Trade shall grant or refuse to grant a license for establish a representative office for foreign trader. In case of refusal, the reasons must be clearly stated in writing.

Where the establishment of a Representative Office is subject to the approval of the relevant Minister or the Head of the ministerial level agency and the establishment of a Representative Office not yet stipulated in the normative document. The Department of Industry and Trade shall send a written request for directions to the specialized management ministry within 03 working days from the date of receipt of a complete and valid dossier. Within 05 working days from the date of receipt of the written request for the directions of the Department of Industry and Trade, the specialized management ministry shall issue a written statement stating its consent or refusal to grant a license for the establishment of the representative office. Within 5 working days after receiving the opinions of the specialized managing ministries, the provincial / municipal Industry and Trade Services shall grant or refuse to grant permits for the establishment of representative offices to foreign traders. In case of non-licensing, the reasons therefor must be clearly stated in writing.

In addition, for certain special cases managed by the specialized management ministry, the licensing of representative offices is carried out in accordance with the specific regulations.

Our lawyers in Vietnam constantly follow up with changes of law to provide the client with update for better decision making process.

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Differences Between Limited Liability Company and Joint Stock Company | ANT Lawyers

 How to distinguish a Limited Liability Company and Joint Stock Company?”

Vietnam Law allows the establishment company in Vietnam in various forms. It is an important step in investment process.

Investors could choose different forms depending on the needs and capacity on the ability to raise capital and sharing the risk in business as well as the management and operating costs. Each form will have its own organizational structure, operating mechanism, rights and obligations specified under Law on Enterprise 2014.

Currently, Limited Liability Company (“LTD”) and Joint Stock Company (“JSC”) are two popular enterprise forms operating in Vietnam.

What is the difference between these two forms of companies?

I. Organizational Structure

Number of members/shareholders:

LTD

-Single member LTD: Having only one member (member can be an organization or an individual);

-Multi members LTD: Having at least 2 members and not exceed 50 members (member can be an organization or an individual).

JSC

Joint Stock Company has at least 3 shareholders and not limit the maximum number.

Management structure

LTD

-Single member LTD

Single member LTD owner by an organization shall be organized under two models: Company president, Director/General director and Supervisor; (OR) Members Council, Director/General director and Supervisor.

Single member LTD owner by an individual shall be organized as follows: Company president, Director/General director.

-Multi members LTD

Multi members shall be organized by: LTD Council members, Chairman of the Members Council and Director/General director;

Multi members LTD having 11 members or more shall establish the Board of Supervisors.

JSC

JSC can be organized under two models: General Meeting of Shareholders, Board of Directors, Board of Supervisors and Director/General director; (OR) General Meeting of Shareholders, Board of Directors (Board of Internal Supervisors under Board of Directors) and Director/General director.

II. Capital Contribution

Raising capital

LTD

-Single member LTD: Owner increases charter capital

-Multi members LTD: Members increase their charter capital, or increasing the number of capital contributors

JSC

Different from LTD, JSC can raise its capital by various methods as follows: Selling shares to existing shareholders; Selling shares individually to non-shareholders; Issuing shares on the stock market.

Transfer of contributed capital

LTD

-Single member LTD: Owner transfers a part of contributed capital to other persons and this could lead to changes of the type of business or other procedures if all capital is transferred (for instance in a M&A deal).

-Multi members LTD: Offer the stakes to other members in proportion to their stakes in the company under the same conditions; The stakes could only be transferred to other persons if the members do not buy or do not buy completely within 30 days from the offering date.

JSC

The shareholders of JSC are free for transfer their contributed capital after 03 years from the establishment.

Having said that, LTD is a type of enterprise that the capital contribution is not the only link between the members of the company but they are also linked together by relationship. They may be acquaintances and trust each other to jointly contribute capital to establish an enterprise. Therefore, the management of the LTD is as complicated as JSC. With the larger the number of shareholders, the level of capital mobilization, voting power to decide on issues of the company based on the ratio of capital contribution of each shareholder, the management and operation of the JSC is more complex.

The ability to raise capital of a JSC is higher than a LTD. Because, JSC can issue shares to the public in the form of securities. When the stocks are listed on stock exchange, the information of company’s business operations must be public and more transparent.

The procedure to set up a company in form of an LTD or a JSC has not much differences.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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