Representative Office in Vietnam

A Representative Office (RO) is obliged to represent the enterprise’s interests, conduct liaison activities, market research, and promotion of its head office’s businesses. ROs can help ease the execution of transactions between the overseas parent company and the local vendors.

So, what to take into consideration when establishing one in Vietnam?

Registration

In normal practice, within 20 working days upon receiving valid application documents, ROs may receive in full the legal certification of operating license, tax code, stamp registration as following diagram:

 

Tax-related Matters

Generally, a RO is not subject to common tax obligations such as License Fee, Value-Added Tax, Corporate Income Tax. However, since there are staff working at a RO, it is the RO’s responsibility to comply with Personal Income Tax regulations. Yet notably, under satisfied conditions, the Head of the RO could take advantage of the Treaty on avoidance of double taxation.

Accounting Compliance

There are no regulatory requirements for accounting filing. However, for better cost-control at the parent company as well as more transparent business activities for upcoming inspection by authorities, the RO should maintain simple records according to requirements from the parent company or send all accounting documents to the parent company.

Labor Notes

Working Permit
A working permit is usually a must for foreigners before starting working for RO.

 

Visa

A business visa is also statutorily required prior to a foreigner’s entry to Vietnam. Depending on the actual situation, the RO can apply for a special process.

Recruitment and social insurance contribution
If the RO of Foreign business entity recruits Vietnamese Labor, they have to submit recruitment requests for Vietnamese authorities and need to submit periodical labor reports. The compulsory insurances include social insurance, health insurance and unemployment insurance and must be registered for labor contract with term from one month, the rate of the insurances are as followings:

Insurances Local  Foreign Resident
RO contribution rate Staff contribution rate Total RO contribution rate Staff contribution rate Total
Social insurance 17.5% 8% 25.5% 3.5% 3.5%
Health insurance 3% 1.5% 4.5% 3% 1.5% 4.5%
Unemployment insurance 1% 1% 2% 0%
Total 21.5% 10.5% 32% 6.5% 1.5% 8%

The RO must still contribute 2% of the salary fund as the trade union fee to the District Labor Confederation even if the RO does not set up its union.

How can we help you?

Contact us at the ASTC office nearest to you or submit a business inquiry online.

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Bui Minh Cuong
Audit Director
+84 987 200 809‬
+84 24 6666 6860
Hoang Van Vung
Head of Ho Chi Minh Office
+84 90 435 8307‬
+84 282 262 8080‬
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