The Representative Office in Vietnam
A five-year licence, one head of office, and not a single invoice
Vietnam’s representative office is the cheapest lawful way for a foreign company to be in the country. It is licensed rather than registered, it lasts five years at a time, and it is deliberately kept on the far side of a line: it exists to look, to liaise and to promote, never to trade. Companies that respect that line find it an unusually efficient instrument. Companies that do not find that the tax authority has a name for what they built, and it is permanent establishment.
What is it?
The framework is the Commercial Law No. 36/2005/QH11, fleshed out by Decree No. 07/2016/ND-CP and the forms in Circular No. 11/2016/TT-BCT. The licence is issued by the Department of Industry and Trade of the province — or by the management board where the office sits inside an industrial park, an export processing zone or a high-tech zone.
Since the administrative consolidation of 1 July 2025 there are thirty-four provinces and cities, which changed a good many addresses and competent authorities: an old file cannot simply be re-lodged.
A representative office is not a company. It has no capital and no legal personality of its own; it is the foreign trader, present at a Vietnamese address, holding a tax code and a seal.
What may it do — and what may it not?
| It may | It may not |
|---|---|
| Act as a liaison office for the foreign trader | Carry out any profit-making activity |
| Conduct market research | Sell, distribute, import or export in its own name |
| Promote the trader’s business and its products | Issue a VAT invoice |
| Supervise the performance of contracts signed by the trader | Sign a commercial contract, except under a specific written power for each transaction |
| Recruit and employ staff locally, in its own name | Collect payment from Vietnamese customers |
| Open a bank account in dong and in foreign currency | Use that account for anything but its own running costs |
Two points deserve emphasis because they are where files go wrong.
The head of office may sign a commercial contract only under a power of attorney given for that specific transaction. Vietnamese law knows no general authority for this purpose, and a contract signed without the specific power is exposed.
There is no compulsory dispatch agency and no intermediary to pay: the representative office contracts with its employees in its own name. Add roughly 21.5 % of gross salary for employer social, health and unemployment contributions, and nothing else.
Who may open one?
The foreign trader must be lawfully registered abroad, must have been operating for at least one year from that registration, and its own registration must have at least one year left to run at the date of the application.
The activity of the representative office must be consistent with Vietnam’s commitments under the treaties it has signed. Where it is not, the licence requires the prior opinion of the line ministry, and the seven-day clock does not apply.
One head of office is appointed. The person may not simultaneously be the head of a branch of the same trader in Vietnam, the legal representative of a Vietnamese entity of the trader, or the legal representative of any other foreign trader’s presence in Vietnam. These incompatibilities come from article 33 of Decree 07/2016 and are checked at renewal as well as at grant.
The file
| Document | Point of attention |
|---|---|
| Application on form BM-1 | Circular 11/2016, signed by the competent representative of the foreign trader. |
| Certificate of registration of the trader, or equivalent | Must still have at least one year to run. |
| Audited financial statements for the last financial year | Or any other document of equivalent value evidencing that the trader exists and meets its tax obligations. |
| Appointment of the head of office, with passport or identity document | Checked against the incompatibilities of article 33. |
| Lease or memorandum of understanding on the premises | Taken in the name of the foreign trader. The premises must be capable of lawful office use, with a document to prove it — a residential address will not do. |
The foreign documents are authenticated abroad and then translated into Vietnamese by a sworn translator, the translation being itself notarised in Vietnam. How they are authenticated changed on 11 September 2026 — see below. Budget two to five weeks for this leg, depending on which regime applies.
Legalisation — the rule changed on 11 September 2026
Until 10 September 2026 the chain was the old one: notarisation abroad, legalisation by the Vietnamese embassy or consulate having jurisdiction, then the sworn translation.
From 11 September 2026 Vietnam is a party to the Hague Apostille Convention. A public document issued in a contracting state that did not object to Vietnam’s accession is admitted on an apostille alone, and consular legalisation is abolished for it. Decree No. 293/2026/ND-CP takes effect on the same day; the implementation plan was approved by Decision No. 330/QD-TTg of 25 February 2026. Inside Vietnam, apostilles on Vietnamese documents are issued by the Ministry of Foreign Affairs — the Consular Department in Hanoi and the Department of Foreign Affairs in Ho Chi Minh City.
Applications lodged before 11 September 2026 continue under the old rules; documents already legalised remain valid and need no apostille; and apostilles issued before that date are accepted. Consular legalisation survives for states outside the Convention, and for any contracting state that objected to Vietnam’s accession.
What has not changed is the translation: a document in a foreign language is still filed with a Vietnamese translation, notarised in Vietnam.
How long does it take?
Counting from a complete instruction: two to five weeks for the documents abroad — the shorter figure now that an apostille replaces consular legalisation — then two to three weeks at the authority, and a further two to three weeks before the office is genuinely operational.
What does it cost the State?
The licence itself carries a state fee of VND 3,000,000 — about USD 115 at some 26,000 dong to the dollar. Amendment, reissue and extension are VND 1,500,000, about USD 58. The fees are set by Circular No. 143/2016/TT-BTC.
Taxes, such as they are
A representative office generates no revenue and pays no corporate income tax. That is the honest answer, and it is why the structure is attractive.
What it does have is payroll. The office withholds and remits personal income tax on its employees’ salaries, and pays employer social, health and unemployment insurance. It files those returns monthly or quarterly, and an annual personal income tax finalisation. It has no VAT obligation of its own because it makes no taxable supply.
The risk is that the office is treated as a permanent establishment of the foreign trader, which happens where it habitually concludes contracts, holds stock, or does anything a liaison office should not. The consequence is corporate income tax at 20 % on profits attributed to Vietnam, assessed backwards.
The whole discipline of running a Vietnamese representative office consists in not crossing that line, and in being able to show that it was not crossed.
Living with it
| Obligation | When |
|---|---|
| Annual report of activity to the licensing authority | Before 30 January each year, covering the year just ended. A short document, and missing it is one of the commonest grounds for a licence not being renewed. |
| Payroll returns | Monthly or quarterly, with an annual personal income tax finalisation. |
| Changes of name, address, head of office, activity, or the trader’s own details | Notified within the periods set by Decree 07/2016 — generally a matter of days rather than weeks. |
| Extension of the licence | Applied for at least thirty days before it expires. Later than that, the office must be closed and re-established. |
| Closure | Settle the payroll taxes, close the labour relationships, return the seal, obtain the tax clearance, then surrender the licence. |
When is it the right answer — and when is it not?
For a foreign manufacturer that sources in Vietnam, a representative office is close to ideal: it puts your own people next to your suppliers, it employs them directly and cheaply, it pays no corporate tax, and it costs a fraction of a subsidiary. The same is true of a company that sells into Vietnam from abroad and needs presence rather than a legal seller.
It is the wrong answer the moment revenue has to be recognised in Vietnam, an invoice issued, stock held, or a licensed activity carried on. In those cases the 100 % foreign-owned limited liability company is the instrument, and it should be set up from the start rather than grafted on later — converting a representative office is not a conversion at all but a closure and a new incorporation, with the tax history of the office still open behind it.
We test that question first, before a single document is legalised.