On January 25th, 2016, the Government promulgated Decree No. 07/2016/ND-CP detailing the Commercial law on representative offices (RO), branches of the foreign traders in Vietnam.

Accordingly, the establishment of the RO, the branch of the foreign traders in Vietnam must be done in compliance with Vietnam’s commitments in the treaties of which Vietnamese is a member. In addition the foreign traders must satisfy other certain conditions when forming the RO and the branch in Vietnam such as: (i) have been operating for at least 01 years if forming the RO, 05 years in case of establishing the branch; (ii) the operation contents of the RO, the branch must be in accordance with the commitment of the treaties in which Vietnam is a member;(iii) being established, registered for business according to the laws of the countries, territories taking part in the treaties in which Vietnam is a member or being recognized by the laws of such countries, territories… Moreover, one foreign trader shall only be permitted to establish 01 RO or 01 branch with the same name in each province, centrally-run city.

For the competency of the licensing establishment of the representative offices, branches: (i) the Ministry of Industry and Trade is responsible for the issuance of License for the establishment of branches; (ii) the Management Board of the industrial park, export-processing zone, economic zone, hi-tech zone (Industrial Park) is in charge of issuance of License for establishment of the RO located in the Industrial Park; (iii) for the RO located outside the Industrial Park the competent agency for issuing the license is Department of Industry and Trade, unless otherwise dictated by specialized laws.

With regard to the procedures, the foreign traders must submit 01 dossier to the competent agency; the period of issuing the license is 07 working days from the date of the receipt of the valid dossier, this period may be exceeded if the issuance of the license is not stipulated in the specialized laws.  In order to restrict the language obstacles, the foreign traders should consider using the consultancy, support of Vietnamese attorneys.

This Decree will takes effect on March 10th, 2016.