Setting up a representative office is considered one of the simplest forms of investment in Vietnam.
The representative office will help the foreign trader to lease office, hire people, open bank account, and promote the business activities in Vietnam market. The chief representative if being foreigner will then could apply for work permit and temporary residence card to stay in Vietnam. There is no income tax as the representative office therefore the liability to maintain a representative office is less hassle. When the purpose of setting up representative office in Vietnam has been achieved, the closing down of the business shall be not as challenging as closing down a company.
According to Vietnam laws, representative office is a dependent unit, representing the foreign entity’s interests in Vietnam. Representative office is established by foreign entities to help them liaise, implement research activities, provide information and support them in seeking new partners as well as having understanding of the new market.
When preparing the application for license of representative office in Vietnam, the foreign entities have to note the following.
Prepare the application forms
The application forms as issued by Ministry of Industry and Trade. The application must be signed by legal representative of the foreign entity;
Notarize, legalize and authenticate documents
The foreign entity has to prepare and provide business registration certificate, audited financial report, charter, and office lease memorandum of understanding, passport of the legal representatives of the Representative Office in Vietnam. The documents issued in foreign countries have to be notarized, legalized and authenticated (apostille procedures) in accordance with Vietnam laws to be used in Vietnam. If the business registration certificate or alternative documents have expiry date for business entity’s operation, the remaining time must be at least one year;
Who should be the chief representative?
The Chief Representative of the Representative Office in Vietnam must be different from the Director of the foreign entity.
How long does it take?
It would take around 20 business days since application until receiving the business operation registration of representative office.
In Vietnam, certain type of contract has to follow forms requested by laws as such client is recommended to seek help from professional contract lawyers in Vietnam to help draft or review.
Contract is an agreement enforced by law. In Vietnam, contract is a civil transaction which parties enter into voluntarily, each of whom intends to create, change, or terminate one or more rights or obligations between them according to Vietnam Civil Code. Contract plays an important roles in business transaction. Written contract provide individuals and businesses a legal document reflecting agreement, expectation and mechanism to resolve potential disagreement or disputes.
The lawyers in Vietnam drafting or reviewing contracts under Vietnam laws will need to initially review the legal resources in relevant to the transactions, research related documents and the parties involved to provide legal opinions, make suggestions and propose an optimal solution to the client for negotiation and contract finalization.
Basic terms and conditions of the contracts being rights and obligations of parties to the contracts, and other terms in regard to duration, quality, payment, dispute handling procedures, applicable law and/or jurisdiction, confidentiality, force majeure, intellectual property clauses…among others have to be carefully taken into considerations.
Further, a contract should ensure the following points to be covered:
Use right legal terms or terminology;
Foresee the future scenarios;
Describe the specific matters;
Clearly mention obligations;
Obtain a balance between parties involved.
There are specific contracts in Vietnam for various transactions being:
Each business transaction is different as such a contract is not a compilation of standard terms and conditions. Professional contract lawyers in Vietnam would consider the purpose of the contract, transaction type, significance of the deal, industry, Vietnam legal requirements and expectation of the client to prepare a legally enforceable contract for the client, to avoid misunderstanding and protect the client against legal disputes.
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