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Thinking about expanding your business into Vietnam in 2025, but unsure where to start? With its strong economic growth, strategic location, and investor-friendly policies, Vietnam has become one of the most attractive markets in Southeast Asia. However, entering a new market requires the right structure and legal strategy. Through this article, Green NRJ will guide you step-by-step on how to set up a representative office in Vietnam — the most effective, low-risk solution for foreign companies to explore the market, build partnerships, and prepare for future investment.
Legal Basis for Set up a Representative Office in Vietnam
The establishment of a representative office in Vietnam is governed primarily by the Law on Commerce 2005 and Decree No. 07/2016/NĐ-CP, which regulate the operation of representative offices and branches of foreign traders. To ensure consistency and simplify administrative procedures, the Ministry of Industry and Trade (MOIT) issued Consolidated Document No. 12/VBHN-BCT dated June 21, 2024, which compiles and updates all prescribed application forms required under Decree 07/2016.
In practice, the licensing authority depends on the office location. If your representative office is situated outside industrial parks, export-processing zones, or economic/high-tech zones, you must apply to the provincial Department of Industry and Trade (DOIT). If it is located inside such zones, the application should instead be submitted to the Management Board of the relevant zone
What Is a Representative Office in Vietnam?
A Representative Office in Vietnam is a non-commercial presence established by a foreign company to conduct liaison and research activities on behalf of its parent entity. It does not engage in trading or generate revenue, but it plays an essential role in helping foreign investors understand the Vietnamese market and build strategic connections before launching full business operations.
In practice, a representative office serves as the bridge between the parent company and Vietnam’s local market. It enables foreign firms to collect market insights, promote their brand, maintain communication with partners or authorities, and supervise the performance of contracts signed by the parent company abroad. Although it cannot sell goods, issue VAT invoices, or sign profit-making contracts, the representative office remains a legitimate and effective way to establish a legal presence and long-term foundation in Vietnam’s growing economy.
Conditions & Legal Requirements for a Representative Office in Vietnam
Before establishing a representative office in Vietnam, foreign companies must ensure they comply with all legal and administrative requirements prescribed by Vietnamese law.
First, the parent company must have been legally operating in its home country for at least one year, although some local authorities may require two years of operation depending on provincial regulations. This rule ensures that only established and reputable foreign entities are eligible to open a representative office in Vietnam.
The parent company must also hold a valid Business Registration Certificate (or an equivalent incorporation document) issued by a competent authority in its home country. This certificate must be notarized, legalized, and translated into Vietnamese before being submitted to the licensing authority, serving as legal proof of the parent company’s status and legitimacy.
Each representative office must appoint a Chief Representative, who can be either a Vietnamese citizen or a foreign national. In cases where a foreigner assumes this role, they are typically required to reside in Vietnam to effectively manage daily operations and maintain compliance with local laws.
While there is no minimum capital requirement, the parent company must fund all operational expenses — such as rent, staff salaries, and utilities — through official bank transfers to the office’s account in Vietnam. These financial records must be properly maintained for audit and compliance purposes.
Lastly, the representative office is strictly limited to non-commercial activities, in accordance with Decree No. 07/2016/ND-CP and its consolidated guidance documents. Permitted functions include market research, liaison, and brand promotion — activities designed to support the parent company’s strategic development without engaging in direct profit-making or sales in Vietnam.
Step-by-Step Process to Establish an RO in Vietnam
Setting up a Representative Office (RO) in Vietnam is a straightforward process if you follow the correct legal steps. Below is the typical roadmap that foreign companies should expect during the representative office registration in Vietnam.
| Step | Action | Details |
|---|---|---|
| 1 | Secure an Office Address in Vietnam | Lease a commercial office space. Shared or serviced offices are acceptable if the provider is properly licensed. The address must comply with local business-use regulations. |
| 2 | Appoint the Chief Representative | Appoint an individual (Vietnamese or foreign national) who will manage daily operations and ensure compliance. If a foreigner, the Chief Representative should reside in Vietnam during their term. |
| 3 | Prepare Required Documents | Gather all necessary papers, including: • Application form (as prescribed under Consolidated Document 12/VBHN-BCT, issued by MOIT in 2024) • Legalized and notarized copy of the parent company’s Business Registration Certificate • Audited financial statements or proof of operation for the latest fiscal year • Chief Representative’s passport/ID • Office lease contract and property ownership papers • Letter of appointment for Chief Representative(All foreign documents must be translated into Vietnamese and notarized locally.) |
| 4 | Submit the Application | File the dossier with the Department of Industry and Trade (DOIT) of the province/city where the RO will be located. • If inside an industrial park, export-processing, or high-tech zone, submit to the Management Board of that zone. • Statutory processing time: 7 working days from receipt of a valid dossier (in practice 2–4 weeks). |
| 5 | Obtain the Representative Office License | Once approved, the DOIT (or Management Board) issues the RO establishment license, confirming the legal presence of the foreign company in Vietnam. |
| 6 | Create the Official Seal | The RO must make an official seal for use in transactions. Since 2021, registration of the seal sample with the police is no longer required. |
| 7 | Register for Tax Identification Number (TIN) | Register with the local tax authority to obtain a TIN. Although ROs do not pay Corporate Income Tax, tax registration is required for Personal Income Tax (PIT), social insurance, and expense management. |
| 8 | Open a Vietnamese Bank Account | Open an account under the RO’s name to receive fund transfers from the parent company for operational expenses such as rent, salaries, and utilities. |
| 9 | Labor and Social Insurance Compliance | If employing staff, comply with Vietnamese labor law by signing labor contracts, registering for compulsory social, health, and unemployment insurance, and filing monthly declarations. |
| 10 | Annual Reporting Obligations | Submit an Annual Activity Report to the licensing authority by January 30 each year, summarizing the RO’s operations from the previous year. Maintain PIT and insurance compliance for all employees. |
Representative Office vs. Foreign-Invested Enterprise (FIE): Which Is Right for Your Business in Vietnam?
When expanding into Vietnam, foreign companies typically choose between two entry models: establishing a Representative Office (RO) or a Foreign-Invested Enterprise (FIE). Each option serves a distinct purpose and carries unique implications for control, taxation, and operation.
The table below provides a clear comparison to help you decide which structure aligns best with your Vietnam market entry strategy.
| Criteria | Representative Office (RO) | Foreign-Invested Enterprise (FIE) |
| Legal Nature | An extension of a foreign company, not a separate legal entity. | A fully incorporated company in Vietnam with independent legal status. |
| Charter Capital | Not required. A representative office in Vietnam does not need to declare or contribute capital. | Required. An FIE must declare and contribute charter capital; the minimum depends on its registered business line and scale. |
| Permitted Activities | Non-commercial only. ROs can conduct market research, promotional activities, and act as a liaison between the parent company and local partners. They cannot issue invoices or earn revenue. | Fully commercial. FIEs can conduct sales, import-export, manufacturing, services, and profit-generating operations. |
| Setup Process | Simpler and faster. | More complex. Requires both Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC). |
| Tax Obligations | No Corporate Income Tax (CIT). However, ROs must handle Personal Income Tax (PIT) for employees and comply with labor and insurance requirements. | Full tax obligations. FIEs pay CIT, Value-Added Tax (VAT), and other applicable taxes. |
| Profit Repatriation | Not applicable, as ROs cannot generate income. | Profits can be remitted abroad after fulfilling all tax obligations. |
| Best Use Case | Ideal for foreign companies exploring the Vietnamese market, building relationships, or managing distributors. | Suitable for long-term, profit-oriented investment such as manufacturing, trading, or service provision. |
Conclusion
Setting up a Representative Office in Vietnam offers foreign companies a smart, low-risk, cost-effective way to enter one of Southeast Asia’s fastest-growing markets in 2025. When structured correctly — meeting legal requirements, staying within permitted activities, and maintaining strong compliance — an RO serves as an excellent stepping stone for future expansion. If you’re ready to explore Vietnam, build your brand locally, and prepare for long-term investment, contact Green NRJ today for full-service support: from office leasing and document preparation to licensing, tax registration and ongoing compliance. Start your Vietnam market entry the smart way.
