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Representative Office in Vietnam | Rights and Obligations

Posted on by ttvnlegal
Representative Office in Vietnam | Rights and Obligations | Văn Phòng Đại Diện tại Việt Nam | Quyền và Nghĩa Vụ
27
Mar

What are the rights and obligations of a Representative Office in Vietnam? This is an important issue that needs to be taken care of by a foreign trader from before establish a Representative Office to the post-establishment period. Understanding this content will make it easier for a foreign trader to decide on the establishment and operation of a Representative Office, in this article, TTVN Legal will outline the core provisions on the rights and obligations of a Representative Office under Vietnamese law.

First and foremost, the legal rights and interests of a Representative Office in Vietnam will be protected by Vietnamese law, within the scope of permitted activities recorded in the License for Establishment of a Representative Office (“License”).

1. Rights of a Representative Office

Representative office has the following rights under the Commercial Law No. 36/2005/QH11 and Decree No. 07/2016/ND-CP:

  • Operating in accordance with the purposes, scope and duration specified in the License;
  • Renting an office, renting and buying the necessary facilities and equipment for the operation of the Representative Office;
  • Recruiting Vietnamese and foreigners to work at the Representative Office;
  • Opening an account at a bank licensed to operate in Vietnam and only use this account for operations of the Representative Office;
  • Having a seal bearing the name of the Representative Office;

2. Obligations of a Representative Office

Representative office has the following obligations under the Commercial Law No. 36/2005/QH11 and Decree No. 07/2016/ND-CP:

  • Not allowed to conduct profitable activities directly in Vietnam;
  • Only carry out trade promotion activities within the scope permitted by the Commercial Law;
  • Not to enter into contracts, modify or supplement signed contracts by foreign traders, except where head of Representative Office obtains valid letters of authorization from foreign trader or in the case of entering into a contract within the scope of a Representative Office’s rights to operate in Vietnam as stated in Section 1 above;
  • Pay taxes, fees, charges and perform other financial obligations;
  • Before January 30 of each year, submit a report on the operation of the Representative Office in the previous year by post to the Licensing Authority;

3. About the head of the Representative Office

The head of the Representative Office is appointed by the foreign trader and is recorded in the License. According to Vietnamese law, the head of a Representative Office should comply with the following contents:

(1) Take responsibility for their own activities and those of the Representative Office.

  • The head of the Representative Office must be responsible to the foreign trader for his/her operation and that of the Representative Office within the scope authorized by the foreign trader;
  • The head of the Representative Office must be responsible for his/her activities in case of performing activities outside the scope authorized by the foreign trader.

(2) Present in Vietnam.

  • In case the head of a Representative Office exits Vietnam, this person must authorize in writing another person to perform the rights and obligations of the head of the Representative Office according to law. This authorization must be approved by the foreign trader;
  • In case the head of the Representative Office is not present in Vietnam for more than 30 days without authorizing another person to exercise the rights and obligations of the head of the Representative Office or is dead, missing, temporarily detained, sentenced to prison, restricted from losing civil act capacity, the foreign trader must appoint another person to be the head of the Representative Office.

(3) Not concurrently holding the following positions:

  • Head of Branch of the same foreign trader;
  • Head of Branch of other foreign trader;
  • Legal representative of that foreign trader or other foreign trader;
  • Legal representative of an economic organization established in accordance with Vietnamese law.

(4) Not to enter into contracts, to amend or supplement signed contracts of the foreign trader, unless authorized by the foreign trader. At that time, the foreign trader must make a written authorization for each time of entering into a contract, amending and supplementing the signed contract.

How TTVN Legal assist you?

Based on your specific needs when accessing the Vietnamese market, TTVN Legal will:

  • Advising your ability to reach the necessary and sufficient conditions before establishing a Representative Office in Vietnam;
  • Consulting on procedures for requesting the establishment of a Representative Office, rights and obligations of a Representative Office and necessary procedures after being licensed to establish a Representative Office in Vietnam;
  • Regular legal consulting, warning of potential legal risks in the process of operation, supporting in making reports in accordance with the law of the Representative Office in Vietnam;
  • Consulting and introducing you to the potential partners related to the expected operation of the Representative Office in Vietnam.

Contact us if you need further advice.

Note: This article is for informational purposes only and it is not legal advice. The content of the article represents its own TTVN Legal, it is subject to change without prior notice.

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