Documents and procedures for establishing an independent accounting branch – Latest

What is an independent accounting branch? Procedures for applying for a certificate of registration of operation of a branch with Vietnamese capital and an independent accounting branch with foreign capital.

What is an independent accounting branch?

Although an independent accounting branch is a subsidiary of the enterprise, the branch’s financial regime will be completely independent of the parent company. Specifically, an independent branch will:

• Self-determine taxable income and expenses;
• Perform all economic transactions yourself and record them in separate accounting books;
• Self-declare and pay VAT, personal income tax and business license fees;
• Self-declaration and settlement of corporate income tax;
• Prepare and submit year-end financial reports at the branch;
• Have own seal, 13-digit tax code, use separate invoices and bank accounts;
• The accounting department or accounting section at an independent accounting branch is an accounting unit according to the Law on Accounting.

In short, an independently accounting branch will operate as a normal business after it is established. However, at the end of the fiscal year, the company must prepare a consolidated financial report and submit it to the tax authority of the head office.

Procedures and documents for establishing a branch of an independent accounting company

1. Procedure for establishing an independent accounting branch with Vietnamese capital

➤ Step 1: Prepare documents to establish an independent accounting branch

(*):

In the “Tax registration information” section, enterprises need to select the form of “independent accounting” and “consolidated financial statements” if they are required to prepare consolidated financial statements.

➤ Step 2: Submit the application to the Business Registration Office of the Department of Planning and Investment where the head office is located by submitting it directly to the Department of Planning and Investment or submitting it online via the National Business Registration Information Portal.

➤ Step 3: Wait for the certificate of registration of independent accounting branch operation

Within 3 working days from the date of receiving complete and valid documents, the Department of Planning and Investment will issue a branch business license. In case of refusal, there will be a written response stating the reasons.

➤ Step 4: Submit business license tax declaration at the branch tax office

After obtaining a branch operating license, the head of an independent accounting company branch must declare and submit tax declaration documents to the tax authority directly managing the branch.

>> Reference: How to declare business license tax for independent accounting branches.

2. Procedures for establishing an independent accounting branch with foreign capital

➤ Step 1: Prepare application documents for registration of foreign-invested branch operations

Note:

All foreign documents and papers must be consular legalized, translated into Vietnamese and certified.

➤ Step 2: Submit application to the Ministry of Industry and Trade 

➤ Step 3: Wait for results

For normal cases:

• If the application is invalid: within 3 working days, the Ministry of Industry and Trade will send a notice requesting additional information (maximum 1 time);
• If the application is valid: within 7 working days, the Ministry of Industry and Trade will issue a license to operate a foreign-invested branch.

In case of needing to send documents to the Minister of the specialized management department:

• If the application is valid: within 10-15 working days, the Ministry of Industry and Trade will send a written request for comments to the Ministry of Specialized Management. After the Ministry of Specialized Management responds, the Ministry of Industry and Trade will issue a license to establish a branch of a foreign-invested company;
• If the application is invalid: within 5 working days, the Ministry of Industry and Trade will notify in writing.

>> Reference: Procedures for establishing a branch with foreign investment capital.

Note:

Independent accounting branches of foreign-invested companies must carry out procedures for declaring business license tax at the branch tax authority immediately after obtaining a license.

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Procedures to be followed after opening an independent accounting branch

1. Buy digital signature for independent branch

Independent accounting branches also need to carry out procedures and documents online such as banking transactions, signing online contracts, paying social insurance, etc., so having a digital signature is extremely necessary.

Note:

After purchasing a digital signature, the branch needs to register with the tax authority and be confirmed by the bank. 

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Branches can refer to buying tokens from Viettel – the unit providing the highest quality and most stable digital signatures with 3 super-saving service packages:

2. Open a branch bank account

A branch of an independent accounting company needs to open its own bank account to conduct business transactions, pay taxes, pay salaries, electricity, water, branch premises, etc.

The procedure for opening a branch account is similar to opening a bank account for a business. The branch manager needs to prepare the following documents:

• Branch establishment license (copy)
• Passport/ID card of legal representative (copy);
• Branch account registration form according to bank form.

Depending on each bank, the independent accounting branch needs to supplement:

• Decision on appointing school accountant;
• Passport/CCCD of chief accountant (copy).

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3. Register electronic invoices for company branches

To issue sales invoices, independent accounting branches need to register to use electronic invoices. 

Regarding the procedures for declaring and registering to use electronic invoices online according to Decree 123 and Circular 78, independent accounting branches can refer to detailed instructions in the article:

>> How to register to use electronic invoices (form 01/DKTĐ-HĐĐT).

4. Tax declaration and payment

➤ Declare and pay business license fees:

• Independent accounting branches declare and pay business license fees at the branch tax authority;
• The deadline is no later than January 30 of the year following the year the independent accounting branch is established;
• Branch license fee payable:
  • 1,000,000 VND in case of an independent accounting branch established in the first 6 months of the year;
  • 500,000 VND in case of an independent accounting branch established in the last 6 months of the year (only applicable for the first year).

Note: Independent accounting branches established during the period when the enterprise is exempted from business license fees will not need to pay this fee.

>> See more: How to declare and pay business license fees (online and in person).

➤ VAT declaration:

Independent accounting branches in the same province or different provinces must declare VAT at the branch’s tax authority (like a normal enterprise).

>> See details: How to declare VAT for independent branches.

➤ Corporate income tax declaration:

Independent accounting branches submit corporate income tax declarations directly to the branch tax authority. Because independent accounting branches are not affected by the business performance of other branches or the entire company.

5. Hang branch signboard 

The Enterprise Law 2020 stipulates that the enterprise name must be attached/hung at the head office, branches and representative offices. Therefore, immediately after obtaining the operating license, the branch needs to hang the branch signboard to avoid being fined from 10,000,000 – 15,000,000 VND or worse, having the tax code locked.

If a business uses the service of establishing an independent accounting branch at fdiinvietnam.com, it will receive a preferential price of making a good quality mica signboard for only 200,000 VND/signboard.

Questions related to establishing an independent accounting branch