Vietnam government implemented『Amendment to Setting up rep. office and Branch in Vietnam of Foreign Investment Law』No.72 / 2006 / ND-CP in July,2006, which replaced the rules No. 20 / 2000 / TTLT-BTM-TCDL in 2000. The main rules are:

1. The foreign company should exists more than one year to be qualified to set up the rep. office in Vietnam;

2. The usual business period of foreign rep. office is just one year, but  can apply for extension;

3. 『Parent Company Annual Financial Report』 and 『Parent Company M & A』notarized by Vietnam Embassy are required.

Foreign rep. office in Vietnam is for increasing trading / tourism opportunities according to Vietnam Laws. No requirement on registered capital and the corporate income tax is exempted (can't have local direct sales). Foreign investor can set up many rep. offices as needed. According to the Laws in Vietnam, the main functions of rep. office are as below:
1. To carry out business contact, market research, products show, technical exchange on behalf of head office in Vietnam;

2. To sign contract, check goods and carry out technical guidance on behalf of head office;

3. To follow up and sign contracts in Vietnam on behalf of foreign investors;

4. To boost the development of economic/ tourism investment projects in Vietnam;

5. To seek for more business opportunities and provide more professional services to clients;

Foreign travel agency, trading company, human resource agency, rental service company, commission agency, manufactory, consulting company, contractor, sea transportation, international service industry, financial insurance service, accountant service all of them can set up rep. office in Vietnam.

Recently, Vietnam adopts the old regulation of China that the offshore holding company must be set up for more than one year with audited report to be qualified to set up rep. office. If you purchase a more than one year's dormant offshore company such as: Seychelles, Belize, Brunei, Cayman, HK... after audited by legal CPAs, it also can set up rep. office in Vietnam. It will be a perfect fire-wall once any financial, law problems even civil / criminal lawsuits occured. It involves the offshore company's limited liability, and won't has any influence on the operation of parent company. Profit can be kept in offshore company to avoid the Tax in Taiwan.

● Set Up Requirements

Foreign parent company needs to operate legally for more than one year (recommend to purchase a more then one yesr's old holding company);

No registered capital requirement;

Business building, shop lots, business and civil building, private residence can also register rep. office;

● Necessary Documents

Application form must be signed by representative of foreign company;

The business license duplicate notarized by Vietnam Embassy;

Annual financial report that audited by CPA or its replacements (notarized by Vietnam Embassy and translated into Vietnamese);

Company M & A duplicate (notarized by Vietnam Embassy and translated into Vietnamese).

● Set Up Procedures (30-45 working days)

Setting up offshore holding company;

Documents of offshore Co. must be notarized by Vietnam Embassy; translated into Vietnamese;

Application of setting up rep. office in English or Vietnamese;

Setting up license must be issued by the Commercial Department or Tourism Department;

Opening bank A / C and performing relating procedures.

● Approval Time

After submitting all the documents to Commercial Department, the Central Government spends 15 working days to issue license. After the license is granted, the duplicate copy will sent to local authorities, Internal Revenue Service (IRS), Statistic Dept. and Police Dept. as well.

If the documents can't meet the requirements, the License-issuing Authority will issue written notice to foreign investor or its agent to provide supplementary documents within 3 days.

If the application is rejected, the authority will issue a written notice stating reasons for rejection to the foreign investors.

● Public Notice in Newspaper

Rep. office should post a notice three times in Vietnam newspaper/ internet news within 45 days after the license is granted. Contents should include:   1. Names and addresses of rep. office and parent company;   2. Name of the representative of rep. office;   3. License number, issuing date, expiration date, authority name;   4. Business activities of rep. office, such as after-sales service: business contact, marketing.

● Open Bank A/C

Rep. office can open foreign currency account or VND account in Vietnam. The following documents should submit to the bank:   1. Business license (original & duplicate);   2. Company seal, financial seal, personal seal;   3. The chief representative's ID (original & duplicate).

According to article 2 and 3 of 『Amendment to Setting up Rep. Office and Branch in Vietnam of Foreign Investment Law』implemented on 25 July, 2006, the individual who will act as chief representative of the rep. office must meet one of the following requirements:
1. Foreign citizen holds legal passport;   2. Vietnam citizen with foreign residential;   3. Local Vietnam citizen.

Rep. office can recruit staffs through newspaper, recruit agent, governmental recruitment service center or FOSCO (Service Company to Foreign Missions).

Rep. office can't carry out direct-profit-making operations in Vietnam, therefore no corporate income tax will be levied. Yet, the chief representative, and local employees have to pay personal income tax. Besides, rep. office has to pay social insurance tax for Vietnam employees. The new Personal Income Tax (PIT) Law will be

effective on 1 January 2009. A progressive rate levied on Vietnam personal income is from 5% to 35%. The minimum taxable salary for foreign representative of Rep. office is USD 1,000 (about VND 16,000,000), they need to pay USD 50 (about VND 800,000) for personal income tax before 20th every month.

Those who are not resident are liable to a single 25% tax on income earned in Vietnam if they spend 30 days to 182 days in Vietnam. Only foreigners who spend fewer than 30 days in Vietnam are exempt from income tax.

Vietnam implemented No. 29 / 2008 / ND-CP decision on 25 Mar, 2008, Vietnamese and foreigners who work in national economic development zone, export processing zone, port economic zone, high-tech zone and industrial zone, the personal income tax rate is 5-20%.

According to『Amendment to Setting up Rep. Office and Branch in Vietnam of Foreign Investment Law』, Commercial Department or Tour Department are in charge of issue, re-issue, amend, extend and cancel of  license.
● License Amendment

1. When foreign investors change legal representative, business activities, name and address of Rep. office, they have to submit application to Authorities within 10 days.   2. Necessary Documents: a. Signed application forms;  b. Original license.
● License Extension

1. The duration of foreign rep. office is 1 year, it can be extended. But it has to meet the following requirements:
a. Continue to do business as rep. office in Vietnam;  b. The parent company is active;  c. Obey Vietnam rules.
2. The application documents for license extension include:
a. Extension application signed by foreign representative;  b. Recent financial report of parent company translated into vietnamese and notarized by vietnam embassy;  c. Rep. office business report;  d. Original license.
3. The application of extension should be submitted 30 days prior the expiration date of the license.