How to establish a branch of a foreign enterprise in Vietnam? What are required documents and procedures, as well as reliable and fast services for setting up a branch of a foreign enterprise? What are necessary documents and procedures for a branch establishment license for foreign merchants? Let's explore the details with NPLaw in the article below.
I. Understanding a branch establishment license for foreign merchants
Legal regulations regarding a branch establishment license for foreign merchants are as follows:
1. Why do foreign merchants establish branches in Vietnam?
In the current era of international integration, enterprises tend to expand their business activities beyond borders of a single country or region, aiming to establish branches in multiple countries and extend their reach globally.
Accordingly, when these enterprises seek to open additional branches to conduct business activities in different countries, they must comply with legal regulations of the host country.
2. Rights to establish a branch of a foreign merchant in Vietnam
Regarding rights to establish a branch of a foreign merchant in Vietnam, Article 3 of Decree No. 07/2016/NĐ-CP stipulates the following rights:
- Foreign merchants are allowed to establish their Representative Offices and Branches in Vietnam in accordance with Vietnam's commitments in international treaties to which Vietnam is a member.
- A foreign merchant may not establish more than one Representative Office or Branch with the same name within a single province or centrally governed city.
3. Obligations of foreign merchants regarding branch operations
Regarding obligations of foreign merchants concerning operations of their branches, Article 4 of Decree No. 07/2016/NĐ-CP stipulates the following: Foreign merchants must take full legal responsibility under Vietnamese law for all activities of their Representative Offices and Branches in Vietnam.
II. Procedures for applying for the branch establishment license for foreign merchants
- Foreign merchants can submit their applications directly, by post, or online (if eligible) to the Ministry of Industry and Trade.
- Within three (03) working days from the date of receiving the application, the Ministry of Industry and Trade will review documents and request additional information if the application is incomplete or invalid. Such a request for additional documents can only be made once during the entire processing period.
- Except for cases specified in Clause 4, Article 13 of Decree No. 07/2016/NĐ-CP, within seven (07) working days from the date of receiving a complete and valid application, the Ministry of Industry and Trade will either issue or deny the Branch Establishment License for foreign merchants. If the license is denied, a written explanation stating reasons must be provided.
- In cases specified in Clause 5, Article 8 of Decree No. 07/2016/NĐ-CP, or if the establishment of a branch is not regulated by specialized legal documents, additional review by the relevant authorities may be required.
III. Legal regulations on the branch establishment license for foreign merchants
The legal provisions regarding the branch establishment license for foreign merchants are as follows:
1. Conditions for issuing the branch establishment license
- The foreign merchant must be legally established and registered in accordance with the laws of a country or territory that is a party to an international treaty to which Vietnam is a member or must be recognized by the laws of such a country or territory.
- The foreign merchant must have been operating for at least five (05) years from the date of establishment or registration.
- If the foreign merchant's business registration certificate or an equivalent document has a specified operating duration, there must be at least one (01) year remaining from the date of application submission.
- The branch’s activities must be consistent with Vietnam’s market access commitments in international treaties to which Vietnam is a member and must align with the foreign merchant’s business lines.
- If the branch's business activities do not align with Vietnam’s commitments or if a foreign merchant is from a country or territory that is not a party to an international treaty to which Vietnam is a member, the establishment of a branch must be approved by the Minister of the specialized regulatory authority.
2. An application dossier for the branch establishment license
An application dossier includes:
- An application form for issuing the Branch Establishment License, following the template issued by the Ministry of Industry and Trade, signed by a legally authorized representative of a foreign merchant.
- A copy of the Business Registration Certificate or an equivalent document of the foreign merchant.
3. Validity period of the Branch Establishment License
The Branch Establishment License and Representative Office License for foreign merchants are valid for five (05) years but cannot exceed the remaining validity period of the Business Registration Certificate or an equivalent document, if such a document specifies an expiration date.
4. Authority to issue the Branch Establishment License
As the general rule, the Ministry of Industry and Trade is entitled to issue the Branch Establishment License for foreign merchants in Vietnam, unless otherwise specified by specialized legal regulations.
IV. Questions on the Branch Establishment License for foreign merchants
1. In what cases is the Branch Establishment License not granted?
The Branch Establishment License for a foreign merchant will not be issued in the following cases:
- A foreign merchant applies for establishing a new branch within two (02) years from the date a previous license was revoked.
- A foreign merchant is restricted from establishing a branch due to reasons related to national defense, national security, social order and safety, social ethics, or public health.
- The application dossier does not comply with the legal requirements of Vietnam. This non-compliance may arise from issues such as notarization and consular legalization of foreign documents, or other procedural errors.
- The foreign merchant fails to submit additional documents or provide explanations as requested by the competent authority for amendments or corrections.
2. Is it necessary to report to the Ministry of Public Security if the Branch Establishment License is lost?
If the Branch Establishment License is lost, only required procedures are to apply for reissuing a new license. There is no requirement to notify the Ministry of Public Security about the loss.
The above provides information regarding the procedures related to the Branch Establishment License for foreign merchants. For assistance and understanding more about the legal requirements and procedures concerning the establishment of the foreign merchant branch, you may contact NPLaw for specific legal consultation and support.
