Legal Insights · 17.06.2018

Representative Office in Vietnam: Setup and Limits

A Vietnam representative office is the cheapest way to be present here, and the least understood. Two decided cases show where the liability actually lands. A decided case every Vietnam representative office should read Judgment No. 04/2021/LD-PT of 26 March 2021 — Superior Peopl…

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By Lawyer Luu Thi Hue – UniLaw LLC

A Vietnam representative office is the cheapest way to be present here, and the least understood. Two decided cases show where the liability actually lands.

A decided case every Vietnam representative office should read

Judgment No. 04/2021/LD-PT of 26 March 2021 — Superior People’s Court in Ho Chi Minh City, unlawful unilateral termination of an employment contract.

A man employed through a Singapore company’s resident representative office in Ho Chi Minh City sued over his dismissal. Look at how the court arranged the parties. The defendant was the Singapore parent company, at its Singapore address. Its representative office in District 3, together with the agency that formally supplied the staff, appeared only as persons with related rights and obligations.

The Court of Appeal ordered the parent to pay unpaid salary for January and February 2012 of VND 58,380,000, plus VND 50,521,153 for breach of the notice period, plus compensation for the unlawful termination.

That is the whole point of the structure. A Vietnam representative office is not a separate legal person. It cannot trade. It cannot invoice. And it cannot absorb liability, because every obligation it creates belongs to the foreign parent. Choose it for a lawful presence, market research and liaison. Do not choose it hoping to ring-fence risk.

A second case: the parent cannot disown what its chief representative approved

Judgment No. 05/2020/LD-PT of 17 September 2020 — Superior People’s Court in Ho Chi Minh City, obligations after termination of employment.

An employee and a foreign company had signed a termination agreement on 27 December 2016, payable in two instalments. The company paid the first and withheld the second, which had fallen due by 31 January 2017.

The court ordered payment of VND 981,257,880, and added interest of VND 268,766,533 for 33 months of late payment under Article 357 and Article 468(2) of the Civil Code 2015.

Why the counterclaim failed

The company counterclaimed VND 1,483,112,174 for what it called unrelated expenses and excess allowances, and asked for a net balance back from the employee. That claim collapsed on the evidence.

Money left the representative office’s own bank account, and the accounting department drew it with the confirmation of the chief representative and the chief accountant. Moreover, the standing letter of authority of 1 January 2016 had never authorised the employee to spend at all. So the spending was the office’s own, approved by its own chief representative, and the parent could prove no misappropriation.

Read the two cases together. The parent answers for what the office does, and it also answers for what its chief representative approves. Article 4 of Decree 07/2016/ND-CP says exactly that: the foreign trader is liable before Vietnamese law for the entire activity of its office.

What a Vietnam representative office may and may not do

Article 30 of Decree 07/2016/ND-CP draws the line in one sentence. The office acts as a liaison point, researches the market, and promotes the trade and investment opportunities of the trader it represents. Nothing else.

In practice a Vietnam representative office may still rent premises, hire staff, hold its own seal and open its own bank account. Those powers make it look like a company. It is not one.

Any sale of goods or supply of services must run directly between the foreign parent and the Vietnamese counterparty. Consequently the contract needs a signature from someone authorised by the parent, not by the office.

The per-transaction authority rule

Article 33(7) is the provision that catches people. Where the parent authorises the chief representative to sign a contract, or to amend one already signed, it must give that authority in writing for each individual transaction. A standing power of attorney covering all Vietnamese business does not satisfy the rule.

Keep the money clean as well. Payments under a contract between the parent and a Vietnamese partner should not pass through the office’s account, because that pattern looks like trading.

Who may open a Vietnam representative office, and for how long

Article 7 sets four conditions for a Vietnam representative office, plus one escape hatch.

First, the trader must be lawfully established in a jurisdiction that is party to a treaty with Vietnam, or recognised by that jurisdiction’s law. Second, it must have been operating for at least one year. Third, where its home registration carries an expiry date, at least one year must remain at the date of filing. Fourth, the office’s proposed activity must match Vietnam’s treaty commitments.

Where the activity falls outside those commitments, or the trader comes from a non-treaty jurisdiction, Article 7(5) still allows the office. It then needs the approval of the relevant line ministry.

Article 9 fixes the licence term at five years, capped by whatever remains of the home registration. Renewal follows the same rule.

One limit surprises groups with several brands. Under Article 3(2), a single foreign trader may not hold more than one representative office with the same name in one province or centrally-run city.

Where to file for a Vietnam representative office, and how long it takes

Article 5 splits the authority by address. The provincial Department of Industry and Trade licenses offices outside industrial zones, export processing zones, economic zones and hi-tech parks. Inside those zones, the zone management board licenses instead.

The timetable

Article 11 runs a tight clock. Within three working days the authority checks the file and may ask for supplements. That request may be made only once in the whole process, which makes the first filing decisive. Then, within seven working days of a complete file, the authority grants or refuses, and a refusal must state its reasons in writing.

Where a line ministry must be consulted, add roughly two more weeks: three working days to send the request, five for the ministry to answer, five more to decide.

After the licence issues, Article 25 gives the authority 15 days to publish the office’s details on its own website. The old regime of newspaper announcements has gone.

What goes in the file

Article 10 lists one set of documents: the application on the Ministry of Industry and Trade form, a copy of the parent’s business registration, the instrument appointing the chief representative, audited accounts or a tax-compliance confirmation for the most recent financial year, the chief representative’s passport or identity card, and evidence of the premises.

Two formalities trip up most first filings. Several of those documents must be translated into Vietnamese and certified. And the parent’s business registration must additionally be consularly legalised by a Vietnamese diplomatic or consular mission abroad.

The chief representative of a Vietnam representative office

Article 33 governs this role, and it carries more traps than any other provision.

The chief representative answers to the parent for the office’s activity within the authority given, under paragraph 1. Step outside that authority and paragraph 2 makes the act personal.

Leaving Vietnam requires a written delegation, with the parent’s consent, under paragraph 3. Furthermore, paragraph 5 bites hard: absence of more than 30 days without a delegation obliges the parent to appoint someone else.

Paragraph 6 bars the chief representative of a representative office from simultaneously serving as head of a branch, as legal representative of the foreign trader, or as legal representative of a Vietnamese company. Groups that plan to convert the office into a subsidiary later should read that restriction early.

Staying compliant, and closing down

Every Vietnam representative office owes an annual activity report. Article 32 requires it on the ministry’s form, sent by post to the licensing authority before 30 January each year.

Article 35 lists six ways a Vietnam representative office ends: at the trader’s request, when the trader itself ceases, on expiry without renewal, on refusal of renewal, on revocation, or when the Article 7 conditions stop being met.

Revocation carries a sting. Under Article 14(2), a trader whose licence has been revoked cannot apply for another representative office or branch in Vietnam for two years.

Legal basis

Decree No. 07/2016/ND-CP of 25 January 2016, detailing the Commercial Law on representative offices and branches of foreign traders — Article 3 the right to establish, Article 4 the trader’s liability, Article 5 the licensing authority, Article 7 the conditions, Article 9 the five-year term, Articles 10 and 11 the file and the timetable, Article 14 refusal and the two-year bar, Article 25 publication, Article 30 permitted activity, Article 32 annual reporting, Article 33 the chief representative, Article 35 termination.
Commercial Law 2005, Law No. 36/2005/QH11, as consolidated in No. 113/VBHN-VPQH — Articles 16 to 18 on foreign traders in Vietnam.
Civil Code, Law No. 91/2015/QH13 — Article 357 and Article 468(2) on interest for late payment.
Investment Law, Law No. 143/2025/QH15, in force 1 March 2026 — Article 37 on the operating office of a foreign investor under a BCC contract, which is a different instrument from a representative office.

Decided cases are published on case.unilaw.vn. If the plan is to sell, invoice or hold assets here, the vehicle is a company rather than an office — see our Vietnam corporate lawyers, the market-access test with our Vietnam investment lawyers, and our guide to starting a business in Vietnam.

For the full picture of property work in this jurisdiction, see our guide for a real estate lawyer in Vietnam, and the rules that apply to foreigners buying property in Vietnam.