Procedures for establishing a branch of a foreign invested company

What are the requirements for establishing a branch of a foreign-invested enterprise? What are the detailed documents and steps for establishing a branch of a foreign company? This article will provide you with complete instructions.

CONDITIONS FOR ESTABLISHING A BRANCH OF A FOREIGN-INVESTED COMPANY

Foreign-invested enterprises are allowed to establish branches when they meet the following conditions:

1. Foreign companies must operate continuously for at least 5 years from the date of issuance of the business license;
2. If the business registration certificate of a foreign-invested enterprise stipulates a term of operation, the term must be at least 1 year from the date of submission of the application to open a company branch;
3. The branch’s business lines must be based on the business lines of the foreign enterprise (head office);
4. The branch’s operations must comply with Vietnam’s commitments in international treaties to which Vietnam is a member;
5. Foreign companies must belong to countries or territories that are members of international treaties of which Vietnam is a member or be legally recognized in those countries or territories;
6. If a foreign company branch does not satisfy conditions 4 and 5, the procedure for establishing a foreign company branch must be approved by the Minister of the specialized management ministry.

DOCUMENTS FOR ESTABLISHING A BRANCH OF A FOREIGN-INVESTED ENTERPRISE

To open a branch of a foreign-invested enterprise, the application includes:

1. Notice of establishment of company branch;
2. Application for license to establish a company branch;
3. Decision to establish a branch by the owner/board of members/board of directors;
4. Minutes of the meeting on the establishment of a branch of the board of members/board of directors;
5. Document appointing the head of the company branch;
6. Documents proving land use rights for branch office (*);
7. Copy of the charter of the company branch’s operations;
8. Notarized copy of Business Registration Certificate/equivalent documents;
9. Copy of ID card/CCCD/passport of the head of the company branch;
10. Copy of audited financial statements/document confirming tax obligations for the most recent fiscal year.

Note: 

Foreign documents must be consular legalized, translated into Vietnamese and notarized. 

(*) For item 6, depending on the case, you can use one of the following documents: Copy of memorandum of understanding; Location lease agreement; Copy of document proving that the trader has the right to exploit and use the location to set up a branch office; Copy of document on the proposed location of the branch office, but must comply with the provisions of Vietnamese law on security conditions, order, labor safety and hygiene and other conditions as prescribed by law.

Although the regulations for establishing a branch of a foreign-invested company are quite similar to those for Vietnamese enterprises, the details of the documents that need to be prepared are somewhat different. Therefore, to save time and speed up the implementation process, you can refer to the service of establishing a branch of a foreign-invested company of fdiinvietnam.com. 

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PROCEDURE FOR OPENING A BRANCH OF A FOREIGN TRADER

The steps for registering to establish a branch of a foreign company are as follows:

Step 1 : Submit application to the Ministry of Industry and Trade.

Step 2 : Wait for results from the Ministry of Industry and Trade.

♦ For normal cases:

• Within 3 days, if the application is invalid, you will receive a notice requesting additional information (maximum 1 time);
• Within 7 days, if the application is valid, the Ministry of Industry and Trade will issue a license to establish a branch of a foreign-invested company. 

♦ In case the dossier must be sent to the Minister of the specialized management ministry:

• Within 3 days, if the application is valid, the Ministry of Industry and Trade will send a document requesting comments from the specialized management ministry;
• Within 5 days, the specialized management department will respond to the information in writing;
• Within 5 days from the date of receiving the opinion of the specialized management ministry, the Ministry of Industry and Trade will grant a license to establish a company branch to the foreign trader, otherwise, a written notice must be sent.

NOTES WHEN ESTABLISHING A BRANCH OF A FOREIGN TRADER

After being granted a company branch license and throughout the operation, you need to pay attention to legal issues related to the company branch license, such as:

1. Branches are not allowed to lend or sublease their branch offices;
2. The term of validity of the license to establish a branch of a foreign-invested company is 5 years, but does not exceed the remaining term of the business license or equivalent documents;
3. Carry out procedures to adjust the license of a foreign enterprise branch if there is any change in information on the license during operation;
4. Carry out procedures to re-issue a license to establish a branch if the branch’s location is changed to another province or city or to an area under the management of another Management Board;
5. Carry out procedures to re-issue a license to establish a foreign company branch if it is lost, damaged, etc. The re-issued branch license has the same validity as the previously issued license;
6. Within 15 days from the date the license to operate a foreign company branch is granted, re-granted, adjusted, extended, revoked, etc., the licensing authority will notify the details on the electronic information page; 
7. Before January 30 of each year, a branch of a foreign trader must send a report on its activities in the previous year to the licensing authority by post, otherwise its branch operating license will be revoked.

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