Vietnam is rapidly emerging as a strategic destination for foreign investment, thanks to its strong economic growth, competitive labor market, and expanding consumer base. For international businesses looking to establish a presence without creating a separate legal entity, opening a branch in Vietnam can be an efficient and practical solution.
But how exactly does the process work? What conditions must a foreign company meet? And what are the licensing, tax, and compliance obligations involved?
Understanding these critical factors is essential before taking your first step. In this guide, we’ll walk you through everything you need to know about establishing a branch of a foreign company in Vietnam — from legal requirements to practical procedures — so you can move forward with clarity and confidence.
What is a foreign company branch?
A foreign company branch is an extension of a company established overseas and licensed to operate in another country, such as Vietnam. It allows the foreign parent company to conduct commercial activities directly in the host country without establishing a separate legal entity.
Key characteristics
- No independent legal status: Operates under the authority of its foreign parent company.
- Business activities: Allowed to conduct business and sign contracts within the scope of its license.
- Administrative identity: Has its own seal, tax code, and bank account in the host country.
- Business scope: The branch’s business lines must match those of the foreign parent company.
Branches, representative offices, and foreign-invested companies are all forms through which foreign investors can establish a presence in Vietnam. However, they differ in terms of legal status, scope of permitted activities, and degree of operational independence.
Conditions for establishing a foreign company branch in Vietnam
Under Article 8 of Decree 07/2016/NĐ-CP, a foreign enterprise may be granted a license to set up a branch in Vietnam if the following requirements are met:
- The foreign corporation must be legally established and registered for business under the laws of the country or territory that is a party to an international treaty to which Vietnam is a member, or otherwise legally recognized under the laws of that country/territory.
- The parent company must have been operating for at least 5 years from the date of establishment or business registration.
- If the foreign business registration certificate (or equivalent document) specifies a fixed duration of operation, the remaining term must be at least 1 year from the date of submission of the license application.
- The proposed activities of the branch must be consistent with Vietnam’s market access commitments under international treaties to which Vietnam is a member, and must align with the business lines of the foreign parent company.
- If the proposed activities do not fall within Vietnam’s commitments, or if the foreign trader is from a country/territory outside those treaties, the establishment of the branch requires approval from the Minister of the relevant specialized management ministry.
Procedure for establishing a foreign Company branch in Vietnam
The process of applying for a license to establish a foreign company branch in Vietnam involves the following steps:
Step 1: Prepare the application dossier
– Application form for a branch establishment license, signed by the authorized representative of the foreign trader.
– Copy of the business registration certificate or equivalent legal document of the foreign trader (must be consularly legalized).
– Decision on appointment of the head of the Vietnam branch, signed by the authorized representative of the foreign trader.
– Copy of the identity document of the branch head:
- Citizen ID card/Identity card (if Vietnamese)
- Passport (if foreigner)
– Copy of the branch’s charter of operation.
– Copy of audited financial statements or a document confirming fulfillment of tax/financial obligations in the most recent fiscal year of the foreign enterprise.
– Office lease contract / memorandum of understanding / documents proving the trader’s right to use the location for the branch office, together with evidence that the location meets the conditions for establishing a branch office:
– Copy of land use right certificate (if private property)
– Certificate of fire prevention and fighting compliance (if in an office building or complex with business office functions).
*Note: All documents in foreign languages (such as passports, business registration certificates, appointment decisions, etc.) must be translated into Vietnamese and submitted together with a duly certified translation.
Step 2: Submit the application
Once the application dossier has been fully prepared, the foreign company may submit it directly, by post, or online (if eligible) to the licensing authority.
Within 03 working days from the date of receipt, the licensing authority will review the dossier for completeness and validity. If the application does not meet requirements, the authority will issue a notice requesting supplementation or correction. Such a request for supplementation may only be made once during the entire application process.
Step 3: Issuance of the license
Within 07 working days from the date of receiving a complete and valid dossier, the licensing authority will evaluate the application and decide whether to grant the license for establishment of a Branch. If the application is rejected, the authority must provide a written response clearly stating the reasons for refusal.
Once the license is granted, the Ministry of Industry and Trade will publish the branch’s information on its official electronic portal within 15 days.
*Note: In cases where the establishment of a branch requires approval from a specialized management ministry, the procedure is as follows:
– Within 03 working days from the date of receiving a complete and valid dossier, the Licensing Authority shall send a written request for opinion to the relevant specialized management ministry.
– Within 05 working days from the date of receiving the request from the Licensing Authority, the specialized management ministry must issue a written response clearly stating its approval or disapproval of the issuance of the License for Establishment of the Branch.
– Subsequently, within 05 working days from the date of receiving the opinion of the specialized management ministry, the Licensing Authority shall decide whether to grant or refuse the License for Establishment of the Branch to the foreign trader. In the event of refusal, the authority must provide a written response clearly stating the reasons.
Regulations on the head of a foreign company branch in Vietnam
Rights and obligations
– The branch head is responsible to the foreign trader for all activities of the branch within the scope of authorization.
– If the branch head carries out activities beyond the authorized scope, they must personally bear responsibility for their actions under the law.
Obligations when leaving Vietnam
– Before leaving the country, the branch head must issue a written authorization assigning another person to perform their rights and obligations in accordance with the law.
– This authorization must be approved by the foreign trader.
– Even after delegating authority, the branch head remains responsible for the rights and obligations assigned.
– If the authorization expires and the branch head has not returned to Vietnam or issued a new authorization, the authorized person may continue or terminate the exercise of rights and obligations under the authorization until:
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- The branch head resumes their role; or
- The foreign trader appoints a replacement.
Cases requiring appointment of a new branch head
The foreign trader must appoint a new branch head if:
– The current branch head does not return to Vietnam after 30 days without delegating authority
– The branch head dies, goes missing, is detained, or is sentenced to imprisonment
– The branch head is restricted or loses civil act capacity under the law
Positions not allowed to be held concurrently
The head of a foreign company branch in Vietnam may not simultaneously serve as:
– The head of a representative office of another foreign trader
– The head of a representative office of the same foreign trader
– The legal representative of an economic organization established in Vietnam.
Frequently asked questions
Does the license for establishing a foreign company branch in Vietnam have a validity period?
Yes. The license is issued for a maximum of 5 years, but it cannot exceed the remaining validity of the foreign company’s business registration certificate if that document specifies a fixed duration of operation.
Is a foreign company branch in Vietnam required to report its activities?
Yes. The branch must submit periodic reports on its operations and provide documents or explanations as requested by the Ministry of Industry and Trade. Reports must be submitted no later than January 30 each year.
Can the license for establishing a foreign company branch in Vietnam be renewed?
Yes. Foreign enterprises may apply to renew the branch license. However, the renewal application must be submitted at least 30 days before the license expires, in accordance with regulations.
What procedures must be completed after obtaining the branch establishment license?
To operate legally in Vietnam, the branch must carry out post-licensing procedures, including:
- Engraving and registering the branch seal
- Registering for a tax code
- Opening a bank account
- Displaying a signboard at the branch office
- Registering employees and social insurance (if staff are employed)
- Applying for work permits and temporary residence cards (if foreign staff are employed)
- Fulfilling initial tax obligations
Foreign company branch establishment services in Vietnam
Establishing a foreign company branch in Vietnam is a strategic step to expand market presence, strengthen international visibility, and leverage the country’s rapidly growing economy. However, the legal procedures and regulatory requirements can be complex, requiring careful preparation and in-depth knowledge. A properly established branch provides a solid foundation for long-term business growth.
With over 40 years of experience, FISC proudly offers professional, efficient, and comprehensive services for establishing foreign company branches in Vietnam. Contact us today for detailed consultation and full-service support, helping your business confidently enter the Vietnamese market without concerns about legal procedures.
