Establish a representative office in Vietnam

A Representative Office (RO) is a dependent unit of a foreign company, authorized under Vietnam's Commercial Law 2005 and Decree 07/2016/ND-CP to conduct non-revenue activities: market research, business development, liaison with local partners, and contract performance oversight. An RO cannot engage in direct profit-making activities: it cannot issue invoices, sign sales contracts, or trade goods. It's primarily used as a low-cost, low-risk market entry vehicle before full incorporation.

A standard RO setup takes about 4-6 weeks once the dossier is complete. Document preparation and legalization or Apostille come first and add time on top. The license decision follows (7 working days from receiving a complete, valid dossier under Decree 07/2016/ND-CP), then the post-licensing registrations: seal, tax code, and bank account. The most common bottleneck is legalizing (or apostilling) parent company documents in the home country, which we advise starting early.

Yes. Under the Commercial Law 2005 and Decree 07/2016/ND-CP, the parent company must have been legally established for at least 1 year before it can register a Representative Office in Vietnam. You'll need to provide audited financial statements from the most recent fiscal year as proof of ongoing operations. Newly incorporated parent companies do not qualify.

The Chief Representative is the authorized person who manages the RO's daily operations and represents the parent company in Vietnam. Under the Commercial Law, each RO must appoint at least one Chief Representative. This person can be a foreign national (with a valid work permit) or a Vietnamese citizen. They must reside in Vietnam and are responsible for the RO's legal compliance, including annual reporting. One person can serve as Chief Representative for up to one RO.

Yes. An RO can directly hire Vietnamese employees under standard labour contracts. Foreign employees can also work at the RO but require a valid work permit issued by the provincial Department of Home Affairs (the provincial labor management authority, formerly DOLISA). The RO is responsible for social insurance, health insurance, and unemployment insurance contributions, the same obligations as a fully incorporated entity.

An RO is not subject to corporate income tax (CIT) since it generates no revenue. However, it does have other tax obligations: personal income tax (PIT) withholding and reporting for its employees, social insurance and health insurance contributions as an employer, and Foreign Contractor Tax (FCT) may apply if the parent company receives payments related to Vietnam-sourced services. The RO must also register a tax code and file periodic tax declarations, even if most return zero values. We handle all RO tax compliance as part of our ongoing service.

Setup costs typically include: ICLV's professional service fee (starting from $1,800), government filing fees ($150-$300), document legalization or Apostille and translation ($300-$600 depending on home country), and company seal ($50-$80). Ongoing annual costs include: office lease ($150-$500/month for serviced offices), Chief Representative work permit renewal, annual operational report filing, and bookkeeping/tax compliance. Total first-year cost is typically $5,000-$10,000 all-in, significantly less than full LLC incorporation.

An RO license is valid for up to 5 years and can be renewed. We track all renewal deadlines and handle the full process.

Yes, and many foreign companies in Vietnam follow this growth path. The usual order keeps the RO open until the new company can trade. First, the company obtains its IRC and ERC from the Department of Finance (formerly DPI) and opens its capital account. Then the RO's labor contracts are ended and staff sign new contracts with the company, expatriates apply for new work permits under the company, and the RO settles its taxes. Finally, the parent notifies the licensing authority of the RO's termination and returns the license under Decree 07/2016/ND-CP. ICLV coordinates each step so payroll and tax filings do not lapse.