Under Vietnam Law, the foreign company can consider setting up a representative office to serve following purposes:
– Operate as contact office of the Company in Vietnam;
– Promote cooperation projects of the Company in Vietnam;
– Research market to push up chances to purchase commodities, supply and consume commercial services of the Company in Vietnam;
– Supervise implementation of the Company’s contracts signed with Vietnamese partners or related to Vietnam market;
– Conduct other works allowed by applicable law
Please be noted that, under Vietnam Law, Representative Office is not allowed to carry out business activities for profit purpose.
It is further advised that validity term of the License for setting up a Representative Office is only 05 years (renewable) counted from the establishment.
The Company is not required to contribute capital for operating the Representative Office in Vietnam except for necessary expenses for paying salary and Personal Income Tax for employees working for the Representative Office as well as office lease cost, etc.
Furthermore, as the Representative Office does not operate for profit purpose, the Representative Office is not required to pay Corporate Income Tax but Value Added Tax for its consumed goods and services, Personal Income Tax for employees working at the Representative Office etc.
We therefore are of opinion that Setting up Representative Office should be for business activities of the Company in short term only.