A. Definition of a branch of a foreign investor in Vietnam
A branch of a foreign investor in Vietnam means a dependent unit of the foreign investor, which is established and conducts commercial activities in Vietnam under the provisions of Vietnamese law or treaties to which the Socialist Republic of Vietnam is a contracting party.
II. Requirements for Grant of Licenses for Establishment of Branches
Before a foreign investor can set up a branch in Vietnam, they must fulfill certain prerequisites.
A. Foreign investor's incorporation and registration
The foreign investor must be incorporated and registered for doing business in accordance with the laws of countries or territories being parties to treaties to which Vietnam is a signatory or is recognized by the aforesaid countries or territories.
B. Operational history of the foreign investor
The foreign investor should have been in operation for at least five years from the date of establishment or registration.
C. Validity of the Certificate of Business Registration
The Certificate of Business Registration or an equivalent document must be valid for at least one more year from the date of submission of the application.
D. Alignment of branch's scope of operation with Vietnam's commitments
The scope of operation of the branch should conform to Vietnam's Commitments to market access stipulated in treaties to which Vietnam is a signatory and shall be consistent with the lines of business of the foreign investor.
E. Consent of the relevant Minister in certain cases
If the branch's operations are inconsistent with Vietnam's commitments or the foreign investor is not located in one of the countries or territories being parties to treaties to which Vietnam is a signatory, the branch can be established only if they obtain prior consent from the relevant Minister for the establishment of the branch.
III. The Authority for Granting Licenses
The Ministry of Industry and Trade holds the authority to grant licenses for the establishment of branches.
IV. Order of Granting Branch Establishment License
The process of obtaining a license for the establishment of a branch in Vietnam involves several steps.
A. Submission of application
The first step is to submit the application in person or by post to the Ministry of Industry and Trade.
B. Examination of the application
The licensing agency shall examine the application and request the applicant to complete their application if it's found to be incomplete. The request for supplementation shall be made only once during the application processing.
C. Notification of approval or rejection
The licensing agency shall send the applicant a written notification of whether the license for the establishment of the branch is granted. In case of rejection, the notification will specify the reasons for rejection.
D. Special considerations for branch establishment
In cases where the scope of operation of the branch is inconsistent with Vietnam's commitments or the foreign investor is not located in the country or territory being a party to treaties to which Vietnam is a signatory, or the establishment of branches that have not been prescribed by specialized legislative documents, the licensing agency shall submit a written request for directions to the relevant Ministry before deciding to grant or not grant a branch establishment license to a foreign investor.
V. Required Documents
To apply for a license for the establishment of a branch in Vietnam, the following documents are typically required:
A. Application form for license for establishment of the branch
B. Copies of the Certificate of Business Registration or equivalent documents of the foreign investor
C. A letter of appointment of the head of the branch
D. 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 investor issued or certified by competent authorities where such foreign investor is established
E. Copies of the branch charter
F. Copies of the passport or ID card (for Vietnamese) or copies of the passport (for foreigners) of the head of the branch
G. Documents on the expected location of the branch, including:
- Copies of the memorandum of understanding or leasing agreements or documents as proof of the right to use a location as the branch
- Copies of the document on the proposed location of the head office meeting the provisions of Vietnamese law on security, order, and occupational safety and health conditions.
VI. Settlement Time
The time required to complete the process of obtaining a license for the establishment of a branch in Vietnam may vary.
A. Normal cases
In normal cases, the process takes approximately seven working days from the date of receipt of complete and valid dossiers.
B. Special cases
In special cases, the process may extend up to 13 working days from the date of receiving complete and valid dossiers.
In conclusion, establishing a branch of a foreign investor in Vietnam is a viable option for expanding business operations in this promising market. Understanding the regulatory requirements and following the specified procedures is essential for a smooth setup. If you're considering such a venture, it's advisable to seek legal counsel and navigate the intricate process with the guidance of experts.
Frequently Asked Questions
Q1. Can any foreign investor establish a branch in Vietnam?
A1. No, foreign investors must meet specific requirements as outlined in Vietnamese law and international treaties.
Q2. What is the role of the Ministry of Industry and Trade in this process?
A2. The Ministry of Industry and Trade is responsible for granting licenses for the establishment of foreign investor branches.
Q3. How long does it take to obtain a license for a branch establishment in Vietnam?
A3. The processing time varies depending on the circumstances but can take up to 13 working days in special cases.
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