Establishment of a representative office
08:19 - 07/01/2022
Establishment of a representative office
“A representative office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, representing and protecting its interests. A representative office shall not do business.” (Clause 2, Article 44 of Law on Enterprises 2020)
Establishment of a representative office
- The main function of a representative office is a liaison office to conduct research, provide information, and assist businesses in accessing new markets and partners.
- Enterprises who want to conduct market exploration, or promote their brands to provinces outside the province where they are headquartered, should set up representative offices.
Due to the nature of a representative office, it has not a business function, generates revenue, or sign contracts with customers, but it can only perform promotion and transaction work on behalf of the parent company. Therefore, the biggest advantage of a representative office is that there are no procedures related to tax reporting and no license tax to be paid. The representative office should contact the tax agency directly to make a written commitment (if any) before carrying out the procedures for declaring and paying license tax or not declaring and paying license tax. In addition, enterprises can establish representative offices in the same city or province.
Legal basis
- Law on Enterprises 2020
- Decree No.01/2021/ND-CP dated January 04, 2021, on enterprise registration
- Circular No.01/2021/TT-BKHDT dated March 16, 2021, on guidance on enterprise registration
Procedures for establishment of a representative office
Step 1: Submitting the dossier (Clause 1, Article 31 of Decree No.01/2021/ND-CP):
- A notification of establishment of branch/representative office signed by the enterprise’s legal representative (According to the form Appendix II-9 of Circular No.01/2021/TT-BKHDT);
- The copy of the resolution or decision and the copy of the minutes of the meeting of the Board of Members of the multi-member limited liability company or partnership, or of the General Meeting of Shareholders of the joint-stock company; the copy of the resolution or decision of the owner of the single-member limited liability company on the establishment of branch/representative office;
- Copies of legal documents of the person who is the head of branch/representative office.
Note:
- The head office’s address of the company’s representative office must not be a group house or an apartment building (similar to the company’s head office).
- Although representative offices do not carry out procedures with tax authorities, when an enterprise needs to change the address of a representative office in another ward or district, it still has to confirm tax obligations with the old Tax Department. Therefore, businesses should pay attention to choosing an appropriate address when establishing a representative office to avoid arising from a change of address to another district.
Step 2: Submit the dossier at the Business Registration Office of the province or city where the representative office is located
Step 3: Complete the procedures for the establishment of a representative office
Within 03 working days from the receipt of the satisfactory application, the Business Registration Office shall issue the certificate of branch/representative office registration and update information about the business location on the National Enterprise Registration Database. The Business Registration Office may issue a certificate of registration of business location to the enterprise at its request. If the application is unsatisfactory, the Business Registration Office shall notify the enterprise of necessary revisions.
Note: Establishment of overseas branches/representative offices shall comply with the law of the host country. Within 30 working days from the official establishment date of an overseas branch/representative office, the enterprise must send written notification thereof to the Business Registration Office of the province where it is headquartered. This notification must be accompanied by a copy of the certificate of registration of the branch/representative office or another document of equivalent validity. The Business Registration Office shall update information about the branch/representative office on the National Enterprise Registration Database within 03 working days from the receipt of the notification.
The above is the establishment of a representative office in HNLAW & PARTNERS Law Firm. If the business still has problems, unknowns, or needs other legal assistance, please contact the online legal consulting department through the hotline: 0912.918.296 for answers. We hope to receive the cooperation of customers!
For more details, please contact Hnlaw & Partners Law Firm
Address: DBS Tower, No.N028, lot 31 Hà Trì residential and commercial service area, Hà Trì ward, Hà Đông district, Ha Noi.
Hotline: 0912.918.296
Email: tuvan.hnlaw@gmail.com
