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Establishing a Representative Office in Vietnam: A Step-by-Step Guide for Foreign Companies
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April 15, 2025Establishing a Representative Office in Vietnam: A Step-by-Step Guide for Foreign Companies
Vietnam is becoming an increasingly attractive destination for foreign businesses due to its fast-growing economy, young population, and strategic location in Southeast Asia. For companies not yet ready to set up a full subsidiary but wanting to explore the market, a Representative Office (RO) in Vietnam is often the best starting point.
This guide covers everything you need to know about how to establish a Representative Office in Vietnam, including legal requirements, benefits, setup procedures, and more.
Table of Contents
- Introduction: Why Set Up a Representative Office in Vietnam?
- What Is a Representative Office (RO) in Vietnam?
- Purpose of Establishing a Representative Office in Vietnam
- Common Scenarios for Foreign Companies
- Benefits of an RO vs. a Foreign-Invested Enterprise (FIE)
- Legal Requirements to Establish a Representative Office
- Is Capital Contribution Required for an RO?
- Step-by-Step Process to Set Up a Representative Office in Vietnam
- Final Notes on Setting Up a Representative Office
Introduction: Why Set Up a Representative Office in Vietnam?
Many foreign companies use ROs as a strategic entry point to the Vietnamese market. It allows them to establish a local presence, build relationships, and better understand market dynamics without committing to a full business operation.
What Is a Representative Office (RO) in Vietnam?
A Representative Office is a form of legal presence that allows a foreign company to engage in limited business activities in Vietnam. The primary functions of an RO include:
- Conducting market research in Vietnam
- Promoting the activities and products of the parent company
- Acting as a liaison office between the parent company and local Vietnamese partners
- Supervising contract performance signed between the parent company and Vietnamese partners
Note: ROs are not allowed to conduct business activities that generate revenue. They cannot sell goods or services, issue invoices, or sign commercial contracts.
Purpose of Establishing a Representative Office in Vietnam
- Vietnam Market Assessment – Understand consumer behavior and evaluate opportunities
- Brand Presence – Establish a visible, physical presence to promote brand awareness
- Partnership Building – Maintain close relationships with local distributors, agents, or government bodies
- Contract Supervision – Ensure product and service quality by monitoring contract execution
Common Scenarios for Foreign Companies
- A European fashion brand exploring Vietnam’s retail industry
- A software development company wanting to build a customer support base
- A logistics enterprise enhancing communication with Vietnamese ports
Benefits: RO vs. Foreign-Invested Enterprise (FIE)
| Criteria | Representative Office (RO) | Foreign-Invested Enterprise (FIE) |
|---|---|---|
| Charter Capital | Not required | Required |
| Revenue-Generating Activities | Not allowed | Fully allowed |
| Setup Complexity | Simple, 3–4 weeks | More complex, takes longer |
| Corporate Income Tax (CIT) | Not applicable | Obligatory |
| Main Purpose | Market research, branding, liaison | Full business operation |
Legal Requirements to Establish a Representative Office
To legally open a Representative Office in Vietnam, the foreign company must:
| Requirement | Details |
| Business Operation Duration | Minimum one year in home country |
| Business Registration Certificate | Must be notarized and legalized |
| Chief Representative | Must be appointed (Vietnamese or foreign national) |
| Registered Office Address | Must lease a commercial office space (residential not permitted) |
Is Capital Contribution Required?
No, capital contribution is not required when establishing a Representative Office in Vietnam. Since ROs do not engage in profit-generating activities, there is no legal obligation to declare charter capital. Instead, operational expenses are funded through transfers from the parent company to the RO’s bank account in Vietnam.
Despite the lack of a capital requirement, it is essential to maintain transparent records of all fund transfers and expenditures for compliance and tax audit purposes.
Step-by-Step Process to Establish an RO in Vietnam
| Step | Action |
| 1 |
Lease a business address in Vietnam Secure a lease agreement for a commercial office space. Residential addresses are not permitted. The lease should be valid for at least one year. |
| 2 |
Appoint a Chief Representative Appoint a qualified individual (foreign or Vietnamese) to be responsible for the RO’s operations and legal compliance. |
| 3 |
Prepare required documents The required documents include:
|
| 4 | Submit application to the Department of Industry and Trade (DOIT)Submit your application dossier to the local DOIT office in the province where the RO will operate. Approval is typically granted within 7–10 business days. |
| 5 |
Register the office stamp (seal) with the police After license issuance, register the RO’s stamp with the police. The stamp must be used for all official documents. |
| 6 |
Obtain a Tax Identification Number (TIN) Register the RO with the local tax department to obtain a TIN. Although ROs do not pay corporate income tax, they must report expenses and fulfill obligations for personal income tax (PIT) and insurance for employees. |
| 7 |
Open a local bank account Open a bank account under the RO’s name to receive operational funds from the parent company. The tax authority must be informed of this account. |
| 8 |
Register labor and social insurance (if employing staff) If hiring staff, the RO must comply with Vietnamese labor law, including:
|
Final Notes on Setting Up a Representative Office in Vietnam
Setting up a Representative Office in Vietnam is an excellent strategic move for foreign companies aiming to build presence, assess market potential, and prepare for long-term investments. The process is quicker and simpler than establishing a wholly foreign-owned enterprise (WFOE) and comes with lower regulatory obligations.
✅ Need Help?
Our expert team at Green NRJ offers full-service support—from office leasing and document preparation to licensing and tax registration.
Contact Green NRJ today to begin your Vietnam market entry the smart way.
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