Introduction
A representative office is a practical option for a foreign trader that wants to research the Vietnamese market, develop local business relationships and monitor contract performance before establishing a fully operational company. It has a relatively light structure and no general statutory capital requirement, but it cannot directly generate revenue in Vietnam.
Under the current regulations, the main legal framework is Decree No. 07/2016/ND-CP on representative offices and branches of foreign traders. Licensing authority has also been decentralised to the provincial level under Decree No. 146/2025/ND-CP and related rules. Applicants should therefore check the latest procedure published by the province or city where the office will be located.
1. When Is a Representative Office in Vietnam Appropriate?
A representative office is suitable when a company does not yet need to sell goods or provide paid services in Vietnam, but wants a lawful local presence for market intelligence and liaison activities.
| Criteria | Representative Office (RO) | Limited Liability Company (LLC) |
|---|---|---|
| Legal status | A dependent unit of the foreign trader; not a separate legal entity | A separate legal entity established in Vietnam |
| General minimum capital | No general statutory capital requirement | No general statutory minimum; sector-specific capital requirements may apply |
| Revenue generation | Not permitted | Permitted within the approved business and licensing scope |
| CIT and VAT | Normally no business-related CIT or output VAT because an RO cannot generate revenue | Depends on the actual business, income, goods and services |
| Licensing time | Generally seven working days after a complete and valid application is received; actual timing may be longer | Depends on the sector, investor and applicable investment/company registration procedures |
| Best suited for | Market research, liaison, business promotion and monitoring contract performance | Sales, services, manufacturing, import/export and revenue generation |
A representative office is not suitable if the business needs to sign sales contracts in its own name, issue VAT invoices, collect customer payments, provide paid services, manufacture products or conduct import/export activities in Vietnam. An LLC or another investment structure will normally be more appropriate.
2. Permitted and Prohibited Activities
An RO may perform liaison functions, conduct market research and promote the investment and business opportunities of the foreign trader it represents. Every activity must remain within the scope stated in its licence and must not directly generate profit.
| Area | Permitted | Not permitted |
|---|---|---|
| Research and liaison | Market research, partner liaison, information gathering and lawful brand-promotion support | Selling goods, brokerage or paid services |
| Contracts | Following up and monitoring contracts entered into by the foreign trader | Entering into revenue-generating commercial contracts in the RO’s own name |
| Finance | Receiving operating funds and paying lawful RO expenses | Collecting sales revenue, issuing VAT invoices or distributing profits |
| People and operations | Hiring employees, leasing premises and purchasing items needed for RO operations | Manufacturing, processing or assembly |
| Import and export | Providing information and monitoring the foreign trader’s transactions | Directly importing, exporting or distributing goods |
The head of the RO may sign transactions required for the office’s lawful operations and may represent the foreign trader under a valid written authorisation. Such authorisation does not allow the RO to become a revenue-generating business.
3. Eligibility Requirements in 2026
| Requirement | What to check |
|---|---|
| Legal status of the foreign trader | It must be lawfully established or registered under foreign law and recognised by that jurisdiction. |
| Operating history | It must have operated for at least one year from its establishment or registration date. |
| Remaining registration term | If its registration has a fixed term, at least one year must remain on the application date. |
| Proposed scope of activities | It must be consistent with Vietnam’s relevant international commitments; specialist consultation may be required in other cases. |
| Head of the RO | The person must not fall within a prohibited concurrent-role category and, if foreign, must hold the required employment and immigration documents. |
| Office location | The RO must have lawful use of premises that comply with land, construction, security and permitted-use requirements. |
4. Documents Required to Set Up a Representative Office
The exact dossier may vary depending on the foreign trader’s home jurisdiction and the provincial licensing authority. A standard application normally includes the following documents.
| Document | Practical point |
|---|---|
| Application for an RO licence | Use the current form, signed by an authorised representative of the foreign trader. |
| Business registration certificate or equivalent | It must remain valid. Consular legalisation is generally required unless an exemption applies, followed by Vietnamese translation and certification. |
| Evidence of operation in the latest financial year | This may be an audited financial statement, confirmation of tax/financial obligations or equivalent evidence accepted by the authority. |
| Appointment of the head of the RO | Confirm the signatory’s authority and clearly define the representative powers. |
| Passport or identification of the head | Provide a valid copy and prepare employment/immigration documents where applicable. |
| Documents for the office premises | A memorandum or lease plus evidence of the lessor’s rights and the premises’ lawful permitted use. |
Not every foreign-issued document is automatically subject to consular legalisation. The requirements for legalisation, certification and translation should be checked separately for each document, issuing country and applicable treaty.
5. Setup Process and Expected Timeline
| Step | Action | Estimated time | Key point |
|---|---|---|---|
| 1 | Check eligibility and premises | 3–7 days | Review the business scope, remaining registration term, permitted use of the premises and eligibility of the proposed head. |
| 2 | Legalise, translate and prepare documents | 1–3 weeks or longer | Timing depends on the issuing country and any consular-legalisation exemption. |
| 3 | File with the competent provincial authority | As published locally | The application is commonly handled by the DOIT or another authority designated by the provincial People’s Committee. |
| 4 | Licence review | Generally seven working days after receipt of a complete and valid dossier | It may take longer if amendments or specialist consultation are required. |
| 5 | Complete post-licensing procedures | Approximately 1–3 weeks | Address tax, seal, banking, employment, signage and commencement notices as applicable. |
These periods are planning estimates, not a guarantee of government processing time. Preparing foreign documents, clearing the office location and responding to dossier amendments are often the longest parts of the process.
6. What to Do After the Licence Is Issued
| Task | Main action |
|---|---|
| Tax registration | Obtain a tax identification number and arrange PIT withholding, declarations and any other applicable tax compliance. |
| Seal | Complete the seal procedures currently applicable to representative offices of foreign organisations. |
| Bank account | Open a dedicated account to receive operating funds from the foreign trader and pay lawful expenses; do not use it to collect business revenue. |
| Signage and commencement notice | Display signage consistent with the licence and notify commencement if required under the local procedure. |
| Employment and immigration | Complete employment contracts, social insurance, work permit or exemption, visa and temporary residence procedures where applicable. |
| Record keeping | Retain the licence, parent-company records, lease, employee files, expense evidence and powers of attorney. |
7. Tax, Employment and Ongoing Reporting
Because an RO cannot conduct business, it normally does not incur CIT or output VAT from sales activities. This does not mean that it is “exempt from all taxes”. Employee PIT, social insurance and transaction-specific withholding or filing obligations may still arise.
| Compliance task | Deadline or cycle | Key point |
|---|---|---|
| Annual activity report | By 30 January of the following year | Report the previous year’s activities to the licensing authority. Two consecutive years of non-filing may be grounds for licence revocation. |
| Personal income tax | Monthly or quarterly, plus annual finalisation where applicable | The RO generally withholds, declares and pays employee PIT. |
| Compulsory social insurance | Within the statutory period once a covered employee arises | Correctly identify covered Vietnamese and foreign employees. |
| Work permits and immigration | According to each document’s validity | Monitor expiry dates and renew in advance. |
| Changes to registered information | Amend the licence within the statutory period | Changes to the address, foreign trader’s name, head or activity scope may trigger an amendment. |
8. Licence Term, Renewal and Closure
An RO licence is valid for up to five years, but it cannot exceed the remaining term of the foreign trader’s business registration or equivalent document. Renewal is possible if the conditions continue to be satisfied, but it is not automatic and each renewal remains subject to the statutory term limit.
When closing an RO, the foreign trader must complete the formal termination procedure and settle tax, employment, contractual, banking and other obligations. Simply vacating the office does not legally terminate the RO.
9. Common Mistakes by Foreign Investors
• Choosing an RO even though the business needs to sell and invoice customers in Vietnam.
• Leasing premises with an unsuitable permitted use or from a party without lawful leasing rights.
• Treating the seven-working-day licensing period as the total project timeline.
• Appointing a head who holds a prohibited concurrent role or lacks employment/immigration documents.
• Confusing the usual absence of CIT/output VAT with an exemption from every tax obligation.
• Missing the 30 January annual report or failing to amend the licence after a registered change.
Conclusion: Is a Representative Office Right for Your Business?
A representative office is effective when the goal is market research, liaison, business promotion and oversight of the foreign trader’s activities. If the plan involves direct sales, paid services, a revenue-generating commercial team or invoicing in Vietnam, the investor should consider establishing a company instead of trying to operate within the limitations of an RO.
TT Collab helps foreign companies assess the right market-entry structure, verify eligibility and premises, prepare the licence application and establish practical tax, employment and annual-reporting procedures. Choosing the correct structure at the outset reduces future conversion costs and compliance risk.
Key legal basis: Commercial Law No. 36/2005/QH11; Decree No. 07/2016/ND-CP; Decree No. 146/2025/ND-CP; Decree No. 139/2025/ND-CP; Circular No. 38/2025/TT-BCT; Law on Value-Added Tax No. 48/2024/QH15; Law on Social Insurance No. 41/2024/QH15; and related implementing regulations.
Disclaimer: This article provides general information only and does not constitute legal or tax advice for a specific matter. The competent authority, filing method and practical requirements may differ by location, the foreign trader’s home jurisdiction, business sector and applicable treaty. Businesses should verify the current rules and obtain professional advice before filing an application or commencing operations.
