Establishing a Representative Office in Vietnam: A Simple Investment Route for Foreigners

Setting Up a Representative Office in Vietnam Under Vietnam Law

Establishing a representative office in Vietnam is one of the simplest ways for foreign investors to enter the Vietnamese market.

A representative office allows foreign traders to lease office space, hire staff, open bank accounts, and promote their business activities in Vietnam.

If the chief representative is a foreigner, they can apply for a work permit and a temporary residence card to live and work in Vietnam.

Since representative offices are not subject to income tax, maintaining one is less burdensome compared to a full-fledged company. Additionally, when the office has fulfilled its purpose, the process of closing it down is less complicated than that of dissolving a company.

According to Vietnamese law, a representative office is a dependent unit that represents the interests of a foreign entity in Vietnam. These offices are established by foreign companies to conduct market research, provide information, assist in finding new business partners, and gain an understanding of the local market.

Foreign entities must meet certain conditions before establishing a representative office in Vietnam. The office operates in compliance with Vietnamese law and has specific rights and obligations.

Important Notes for Preparing the Application to Establish a Representative Office in Vietnam

When preparing the application for a representative office license in Vietnam, foreign entities should keep the following points in mind:

Complete the Application Forms

The application forms for establishing a representative office in Vietnam are issued by the Ministry of Industry and Trade. These forms must be signed by the legal representative of the foreign entity.

Notarize, Legalize, and Authenticate Documents

The foreign entity must submit the business registration certificate, audited financial statements, charter, office lease agreement, and the passport of the legal representative of the representative office in Vietnam. Documents issued abroad must be notarized, legalized, and authenticated (apostille procedures) according to Vietnamese law for use in Vietnam. If the business registration certificate or equivalent documents have an expiration date, there must be at least one year remaining.

Who Can Be the Chief Representative in Vietnam?

The Chief Representative of the office in Vietnam must be a different individual from the Director of the foreign entity.

Timeline for Setting up a Representative Office in Vietnam

The process of setting up a representative office inVietnam generally takes about 20 business days from the submission of the application until receiving the business operation registration for the office.

 

 

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Expert Guidance to Register a Company in Vietnam

Understanding Vietnam’s Business Environment

Before embarking on the process of registering a company in Vietnam, it's crucial to gain a thorough understanding of the local business environment. Vietnam's economy has demonstrated remarkable resilience and growth, particularly in the aftermath of the global pandemic. This success is attributed to strong governmental reforms, the rise of a burgeoning middle class, and the widespread adoption of digital technologies. Strategically located in Southeast Asia, Vietnam serves as an ideal hub for trade and offers a gateway to other ASEAN markets.

Five Essential Steps to Register a Company in Vietnam

1.      Selecting Your Business Structure and Name

2.      Preparing the Required Documentation

3.      Submitting Your Application

4.      Securing Necessary Licenses and Permits

5.      Opening a Corporate Bank Account

Step 1: Selecting Your Business Structure and Name

The initial step to register company in Vietnam involves selecting the appropriate business structure. Common entities include Limited Liability Companies (LLCs) and Joint-Stock Companies (JSCs), each designed to meet different business needs and scales. After determining the business structure, the next task is to choose a unique company name, which must be checked and approved to avoid conflicts with existing entities.

Step 2: Preparing the Required Documentation

For foreign investors, the registration process consists of two primary stages:

·        Investment Registration Certificate (IRC):
The first stage requires obtaining the IRC by submitting a detailed proposal outlining the investment project’s objectives, scope, location, capital structure, capital mobilization plan, duration, and implementation schedule.

·        Enterprise Registration Certificate (ERC):
Once the IRC is granted, the next step is to apply for the ERC. This involves submitting the company’s charter, a list of shareholders, and legal documents pertaining to the appointed representatives.

These documents are essential for ensuring compliance with Vietnamese laws and establishing a solid foundation for legal business operations in the country.

Step 3: Submitting Your Application

Applications for both the IRC and ERC are typically submitted to the Provincial Department of Planning and Investment (DPI) in the province where the investment is planned. The DPI is responsible for reviewing and approving these applications, ensuring that foreign investments align with local regulations and policies.

Step 4: Securing Necessary Licenses and Permits

Depending on the nature of your business, additional licenses and permits may be required to operate legally in Vietnam. The time required to obtain these licenses can vary, so it is advisable to begin this process early to avoid potential delays.

Step 5: Opening a Corporate Bank Account

After successfully registering your company, opening a corporate bank account is essential for managing financial transactions, receiving capital, and handling employee salaries. Vietnam's banking sector is well-developed, offering a range of services from both local and international banks to meet your business needs.

Registering a company in Vietnam opens the door to numerous opportunities in one of Southeast Asia’s most dynamic economies. Although the process may take several months, depending on the specifics of the business, it is a worthwhile investment. By adhering to local regulations and respecting cultural norms, businesses can position themselves to thrive in a market characterized by rapid growth and strategic importance in both the Asian and global economies.

For personalized assistance or more detailed information, consulting with a legal expert in Vietnam can help streamline the process and ensure full compliance with local laws.

 

 

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Starting a Business in Vietnam: A Comprehensive Guide

Starting a Business in Vietnam: A Comprehensive Legal Guide for Foreign Investors

Vietnam has emerged as a prime destination for foreign investment, bolstered by its strong security, political stability, and strategic geographical location. The Vietnamese government has also introduced a series of preferential policies designed to facilitate and encourage foreign investment, making the country an increasingly attractive place to start a business in Vietnam.

A Step-by-Step Guide to Starting a Business in Vietnam as a Foreigner

1. Determine Your Business Structure in Vietnam

The initial step for any investor seeking to establish a business in Vietnam is selecting the appropriate business structure. This decision should be based on the number of capital contributors, the amount of capital contributed, and the overall financial strategy of the business.

Under Vietnamese law, foreign individuals and organizations may choose from several business structures, including:

Limited Liability Company (LLC)

Joint Stock Company (JSC)

Partnership

Private Enterprise

2. Define Your Business Activity in Vietnam

The next critical consideration is the nature of the business activities you intend to conduct.

Non-Conditional Businesses:

If the chosen business activity is not subject to specific legal conditions, the company may commence operations immediately following its establishment. These business activities are categorized as non-conditional and are common among many enterprises.

Conditional Businesses:

However, if the business activity falls under a conditional category, the enterprise must fulfill specific legal requirements, such as obtaining the necessary business licenses, meeting minimum charter capital requirements, and adhering to foreign ownership ratios. Only after satisfying these conditions can the business legally operate.

3. Choose a Business Location in Vietnam

Investors must select a legally compliant location for their business operations within Vietnam. The business address must be situated within the country and meet specific legal requirements relevant to the type of business. For example, company offices cannot be located in residential apartment buildings or dormitories, and factories must be situated in zones designated for industrial purposes.

4. Name Your Business

A unique and legally compliant business name is required for all newly established businesses in Vietnam. The name must not duplicate or closely resemble any existing registered business names and must not include terms associated with government or state agencies.

Businesses may opt for abbreviations or English names; however, these names must not cause confusion with existing entities and must avoid the inclusion of prefixes, suffixes, or cultural symbols that could lead to misunderstandings.

5. Obtain Necessary Certificates for Your Business

-Investment Registration Certificate (IRC):

Foreign investors must apply for an Investment Registration Certificate from the competent authorities in Vietnam. This certificate is a mandatory requirement for any project seeking to establish a new legal entity in the country. The processing time for obtaining the IRC is typically around 30 days, depending on the specifics of the project.

-Enterprise Registration Certificate (ERC):

Following the issuance of the IRC, foreign individuals and organizations must apply for an Enterprise Registration Certificate from the Department of Planning and Investment. This process generally takes around 7 days. Upon obtaining the ERC, the business gains legal status in accordance with the Law on Enterprises in Vietnam, enabling it to commence operations.

Compliance and Ongoing Obligations

From the commencement of operations, the business must ensure ongoing compliance with Vietnamese regulations. This includes the submission of monthly reports related to foreign labor, investments, taxes, health, and insurance to the relevant authorities. Businesses may choose to manage these compliance obligations internally or engage professional services to avoid penalties and ensure smooth operations.

 

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Understanding Trademark Registration in Vietnam

1. Importance of Trademark Registration

Legal Protection: Registering your trademark in Vietnam legally protects your brand and intellectual property, preventing others from using your trademark.

Market Security: It ensures that your brand identity is secured in the expanding Vietnamese market.

2. Common Mistakes to Avoid

Inadequate Research:

Make sure your trademark is unique and not already in use.

Use national and international trademark databases.

Hire experts and consult legal professionals for thorough research.

Incorrect Classification:

Use the Nice Classification system to accurately categorize your goods and services.

Misclassification can lead to application rejection, incomplete protection, and additional costs.

Failure to Monitor and Renew:

Trademark registration requires ongoing monitoring and timely renewals.

Neglecting to renew can lead to loss of rights and legal complications.

3. Benefits of Expert Assistance

Knowledge: Experts understand Vietnam’s trademark laws and procedures.

Efficiency: They streamline the registration process, saving you time.

Risk Reduction: Experts help avoid common pitfalls, reducing the risk of rejection or legal disputes.

Comprehensive Protection: Ensures your brand is fully protected through correct classification and monitoring.

4. Choosing the Right Service Provider

Experience and Reputation: Select law firms in Vietnam with a proven track record in trademark registration.

Full Range of Services: Ensure they offer research, classification, registration, monitoring, and renewal services.

Legal Support: Opt for providers with strong legal expertise to handle any potential disputes.

By understanding these points and seeking expert assistance, you can navigate the trademark registration process in Vietnam smoothly and protect your brand effectively in this growing market.

 

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How Trademark Licensing in Vietnam Works?

How Trademark Licensing in Vietnam Works?

Vietnam's intellectual property law governs the licensing of industrial property subjects in general and trademarks in particular. As a result, when a trademark is licensed in Vietnam, the owner (the licensor) grants permission to another party (the licensee) to use the trademark in Vietnam under terms and conditions that have been mutually agreed upon.

The nature and quality of the products or services associated with the trademark are still under the control of the licensor.

Quality control is the most important aspect of trademark licensing in Vietnam because buyers expect consistent quality from trademarked goods or services regardless of where they are purchased or used.

To avoid disputes in trademark licensing in Vietnam, permission must be granted in writing.

What are the advantages of trademark licensing in Vietnam?

Trademark licensing in Vietnam could bring great advantages as following:

• Additional revenue
• Territorial expansion
• Benefits from others’ manufacturing, sales, distribution, marketing skills
• New channels of distribution
• Discontinued marks
•  Strategic partnerships
• Convert a trademark infringer into a partner
• Increase consumer recognition and advertising 

Forms of trademark licenses in Vietnam

Trademark licensing in Vietnam may take the following forms:

• Franchising
• Merchandising
• Brand extension
• Co-branding
• Components or ingredient branding
• Standards

What kinds of contracts exist for trademark licensing in Vietnam?

Licensing of trademark includes the following types: Exclusive contract, Non-exclusive contract, Sub-license contract.

-First, an exclusive contract is one in which the licensee has exclusive use of the licensed trademark within the scope and duration of the licensing agreement, while the licensor is prohibited from using the licensed trademark without the licensee's permission.

-Second, a non-exclusive contract is one in which the licensor retains the right to use the trademark and enter into a non-exclusive trademark license agreement with others within the scope and duration of the licensing agreement.

-Thirdly, trademark sub-license contract mean an agreement under which the licensor is a licensee of the option to utilize such brand name as per another agreement.

What is included in the Vietnam trademark licensing contract?

In a the agreements, having the accompanying contents is required: complete names and addresses of the licensor and of the licensee; reasons for licenses; type of contract; scope of licensing, including territorial and use right restrictions; contract duration price of a license; rights and responsibilities of the licensee and licensor. To deal with potential disputes that may arise between parties during the execution of trademark licensing in Vietnam, it is essential to establish regulations regarding the dispute resolution process for trademark licensing.

The parties must also consider the legality of this contract in addition to the aforementioned provisions. In contrast to assignment contracts for trademarks in Vietnam, where they must be registered at the National Office of Intellectual Property of Vietnam before they can take effect, licensing contracts for trademarks do not require such registration. When the licensor loses its trademark rights, the licensing agreement will automatically end.

Our Intellectual Property attorney can assist the client with any additional inquiries or requests for legal counsel regarding trademark licensing in Vietnam or a dispute in trademark licensing contract.

 

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International Law Firm in Vietnam

ANT Lawyers is an international law firm in Vietnam with international standards, recognized by Legal500, IFLR1000.

ANT Lawyers is Vietnam exclusive member of Prae Legal, an international law firm network, providing full ranges of legal services

Prae Legal Network provides clients with access to global legal resources through its vast network of well-established 242 law offices in trade centers in 129 countries.

Our respectable and influential professionals are experienced in all fields of law. We are ready to provide legal solutions to companies and people all around the world for their legal needs. We can help when you would do business transactions in the most challenging parts of the world.

Prae Legal provides comprehensive legal expertise in almost all major practice and industry areas. We have general and subject specific legal expertise that could be applied to different needs of each industry. An industry will be interested in legal developments affecting its own business and legal environment.

Vietnam International Law Firm

Together with global law firm partners, ANT Lawyers has the capability to provide in depth legal assistance in the following practice areas:

-Agricultural & Agribusiness

-Antitrust, Competition and Trade Group

-Automotive

-Aviation

-Banking and Financial Services

-Business Crimes and Compliance

-Capital Markets

-Construction and Infrastructure

-Corporate Organizations and Securities

-Employee Benefits and Pensions

-Employment and Labor Law

-Energy and Natural Resources

-Environmental

-Government Affairs

-Health Care Industries

-Immigration

-Insolvency, Bankruptcy and Restructuring

-Insurance and Reinsurance

-Intellectual Property

-Life Sciences

-Litigation, Arbitration and Dispute Resolution

-Media, Entertainment and Sports

-Mergers and Acquisitions

-Private Equity

-Project Finance

-Real Estate

-Tax

-Technology, Outsourcing and Privacy

-Telecommunications

-Products Liability and Toxic Tort

-Trademarks, Copyrights, Trade Secrets and Unfair Competition

-Product Liability and Product Safety

-Cross-Border Transactions

-E-Commerce & Technology

-Product Liability and Product Safety

ANT Lawyers is a law firm in Vietnam with English speaking lawyers, located in the business centers of Hanoi, Danang and Ho Chi Minh City to provide convenient access to our clients. Please contact us via email ant@antlawyers.vn or call our office at +84 28 730 86 529 for legal service in Vietnam

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