Procedures and Compliances how to establish representative office in Vietnam

READ MORE: How to establish a Representative Office in Vietnam

Compliance for representative offices (ROs)

Setting up a Representative office (ROs) is one of the simplest and fastest ways to establish a legal entity in Vietnam. Their report requirements are also more simple compared to FOCs.

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Because ROs are forbidden from directly conducting profit-generating activities and are limited to market research, developing trade contacts, and gathering information on regulations and laws, their compliance requirements are also more simple than FOCs. 

Procedure requirements check – list (2021 update)

1. Tax and accounting procedures

Mandatory: 

• PIT finalization
• PIT finalization for individuals with multiple sources of income or have direct income from abroad

Tasks to note:

• Complete cash book and petty card with appropriate invoices and vouchers for tax inspection
• Re-audit the tax return – payment and tax receipts
• Cross-check the balance – tax status with the tax agency

2. Annual activity Report

• Prepare and submit the Report on the operation of the office during the year to the Department of Industry and Trade

3. Procedures for wage labor

Mandatory: 

• Signing a labor contract, an employment contract appendix for the new salary and income for the year for each employee in the country.
• Provide appointment letter, confirmation letter of annual income for foreign workers.
• Registering and adjusting the salary scale system, labor regulations, labor agreements … to update regulations and welfare policies.
• Complete information about the employee management book with content that needs updating such as days off, overtime hours, discipline, salary increases, …

Tasks to note:

• Performing income verification procedures, issuing PIT withholding vouchers for seasonal employees, employees earning direct income from abroad.
• Determine a list of personnel subject to PIT self-finalization with the tax office.

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Procedures and Compliances for Dissolution

In order to carry out the procedures for dissolution of a representative office in accordance with the promulgated law, the enterprise needs to fully perform the following steps: 

Step 1: Deactivate tax identification numbers with tax authorities.

Step 2: Procedures to return seal, confirm not to use seal (in case there is no seal). 

Step 3: Prepare documents on dissolution of representative office. 

Step 4: Submit the application 

Step 5: Get results

Procedures for Tax Identification Number (TIN) deactivation

In order to be able to validate the Tax Identification Number of the representative office, you need to submit the application to the administrative tax office. Types of papers and documents include:

• Official letter on TIN deactivation.
• The decision to close the representative office of the board of members (LLC) / the board of directors (shares) / owner / business owner (private).
• Meeting minutes of the Board of Directors / Board of Members on the dissolution of the Representative Office.
• Power of attorney for the company’s filers.

Instructions to return the seal, confirm not to use the seal of the representative office

According to the Enterprise Law 2014, effective on July 1, 2015. In case representative offices have been established before this time, when completing the procedures to close the representative office, it is necessary to submit a dossier to return the seal or confirm the seal is not used with the police. We would like to advise a set of documents for customers as follows:

• Official letter confirming no use / return seal.
• Decision to dissolve Representative Office.
• Meeting minutes of the Board of Directors / Board of Directors on the closure of Representative Office
• Power of attorney, a referral for the company submitter.
• Original seal registration certificate, seal in case you pay the seal.

Profile dissolution representative office

After completing the procedures for the code and the seal, the next job that the enterprise needs to do is to prepare papers and documents in the dossier set to close the representative office.

RO’s profile that will include the following categories:

1. Notice of dissolution of RO (Download the form in Appendix II – Circular 20/2019 / TT-BKHDT HERE).
2. Decision of the Owner / Board of Directors / Business Owner / Board of Members on the closure of Representative Office. Or revocation decision of the competent state agency.
3. Minutes of the meeting of the Board of Directors / Shareholders’ Council (if any).
4. Original certificate of representative office operation registration (can use a notarized copy).
5. Seal (if any) or Certificate of unused seal of the police agency.
6. Notice of tax termination.
7. Request for supplementing and updating operation registration information for representative offices issued with investment certificates (Download the form in Appendix II-19 of Circular No. 20/2019 / TT-BKHDT HERE).
8. Power of attorney / company referral for the applicant (FORM)
9. List of number of employees or their benefits in RO (if any).
10. List of debt amounts (including tax debt and social insurance debt) the business has not paid, a list of creditors (if any).

Submitting for closing representative office

When conducting the dissolution of a representative office, the enterprise needs to send a notice to the Business Registration Office where the representative office is located.

Next, businesses can apply through the following 2 ways:

• Go directly to the business registration office where the representative office is located.
• Submit online via website: https://dangkykinhdoanh.gov.vn/

Get results

From the time the registration office receives a valid application, it will take about 05 working days including: Examining the application => changing the status in the Database from registration of Representative Office to termination => out Notice of termination of Representative Office operation (if the application is valid).

In the event that the Registration Office checks the file and finds that there are errors or omissions, it will issue a Notice of amendment and supplementation of the file to the enterprise.

Notably

– Responsibilities for the employees: when wishing to dissolve representative offices, domestic or foreign traders need to give advance notice, fulfill the obligation to pay wages, terminate rental contracts, labor contracts …

– With tax authorities: need to fulfill all tax-related obligations and procedures.

– If the RO has been suspended for more than 1 year but the business owner does not notify the Business Registration Office or the tax authority, then the certificate of operation registration will be revoked. To avoid the situation of being revoked, enterprises need to do temporary business suspension procedures for the representative office if they intend to suspend the business.

– In case the RO location is not in the territory of Vietnam, the enterprise should dissolve in accordance with the regulations of that country. Then, within 30 days, to notify dissolution of the representative office to the Business Registration Office where the head office is located.