Tiếng ViệtAs Vietnam becomes an increasingly attractive investment destination, many foreign enterprises are establishing a foreign company branch in Vietnam to expand operations, strengthen their brand presence, and reach local customers. However, this process requires a thorough understanding of Vietnamese legal regulations, investment laws, and licensing procedures.
This article by LexConsult & Partners provides a comprehensive overview of the conditions, documentation, procedures, and legal obligations for obtaining a Branch Establishment License in Vietnam, along with practical insights to help businesses complete the process efficiently, lawfully, and effectively.
1. Definition, Role, and Legal Basis of Foreign Company Branches in Vietnam
1.1. Definition of a Foreign Company Branch in Vietnam
According to Clause 7, Article 3 of the Law on Commerce 2005, a branch of a foreign company in Vietnam is a dependent unit of a foreign trader, authorized to conduct all or part of the business activities in Vietnam.
Unlike a representative office, a branch is permitted to sign contracts, generate revenue, and bear direct legal responsibility for its operations in Vietnam.
1.2. The Role of Foreign Company Branches in Business Activities in Vietnam
A branch acts as an extended arm of the foreign enterprise, enabling it to:
– Directly conduct business operations, sign contracts, and manage personnel in Vietnam;
– Enhance customer access, optimize distribution costs, and maintain quality control of products and services;
– Build and strengthen brand presence in the Vietnamese market without establishing a separate legal entity.
1.3. Legal Basis for Establishing Foreign Company Branches in Vietnam
Vietnam’s legal system provides a clear and comprehensive framework for the establishment and operation of foreign company branches, ensuring transparency and legal certainty for foreign traders doing business in the country. Key legal documents include:
– Law on Commerce 2005 – stipulates the rights and obligations of foreign traders, as well as the conditions for establishing and operating branches in Vietnam.
– Decree No. 07/2016/NĐ-CP – provides detailed procedures for the issuance of Branch Establishment Licenses for foreign companies.
– Relevant regulations under the Law on Taxation, Labor Code, Law on Social Insurance, and Law on Accounting – govern the financial, employment, and reporting obligations of branches after licensing.
In summary, Vietnam has established a unified and transparent legal foundation for the establishment of foreign company branches, enabling foreign investors to confidently expand their business operations in full compliance with Vietnamese law.
2. Procedures for Establishing a Foreign Company Branch in Vietnam under the 2025 Regulations
According to Decree No. 07/2016/NĐ-CP and Circular No. 64/2025/TT-BTC, establishing a branch of a foreign company in Vietnam is a mandatory legal procedure that allows foreign traders to conduct lawful business operations in Vietnam. Investors must clearly understand the conditions, documentation, and licensing process to avoid errors during implementation.
2.1. Conditions for Establishing a Foreign Company Branch in Vietnam
Pursuant to Article 8 of Decree No. 07/2016/NĐ-CP, a foreign enterprise may establish a branch in Vietnam only when all the following conditions are met:
| No. | Condition | Detailed Description |
|---|---|---|
| 1 | Duration of parent company’s operation | The parent company must have been operating for at least 5 years from the date of its lawful establishment or business registration in the home country. |
| 2 | Validity of the parent company’s business license | The parent company’s business license must be valid for at least 1 year from the date of application submission. |
| 3 | Business sectors of the branch | The branch’s business lines must comply with Vietnam’s market access commitments under the WTO or relevant bilateral/multilateral FTAs to which Vietnam is a member. |
| 4 | Business sectors not included in Vietnam’s commitments | If the intended business line is not covered in Vietnam’s commitments, branch establishment shall be considered only upon approval from the relevant line ministry. |
2.2. Required Documents for Branch Establishment Application
According to Article 12 of Decree No. 07/2016/NĐ-CP, an application dossier for a Branch Establishment License in Vietnam includes the following documents:
| No. | Document | Detailed Description |
|---|---|---|
| 1 | Application form for branch establishment | Using the official form issued by the Ministry of Industry and Trade (MOIT), signed and sealed by the parent company. |
| 2 | Parent company’s business license | A consularly legalized copy, proving the parent company’s lawful establishment in its home country. |
| 3 | Latest audited financial statement or tax declaration | Verified by an independent auditing firm or submitted as an original tax declaration for the most recent fiscal year. |
| 4 | Branch operation charter | Issued by the parent company, specifying the scope of operations, authority, and organizational structure of the branch in Vietnam. |
| 5 | Identification of the branch head | Passport (for foreigners) or Citizen ID (for Vietnamese nationals) of the appointed branch head. |
| 6 | Office lease contract or land use right certificate | Proof of a legitimate business address in compliance with Vietnamese regulations. |
| 7 | Legalization and translation of foreign documents | All documents issued by the parent company must be consularly legalized and notarized Vietnamese translations. |
2.3. Licensing Procedures for Establishing a Foreign Company Branch
Under Article 13 of Decree No. 07/2016/NĐ-CP, the licensing process involves the following four main steps:
| Step | Description | Legal Basis |
|---|---|---|
| Step 1: Application submission | Submit the dossier directly, by post, or online (if eligible) to the Ministry of Industry and Trade or the Department of Industry and Trade in the province/city where the branch will be located. | Article 12, Decree 07/2016/NĐ-CP |
| Step 2: Dossier verification | Within 03 working days, the licensing authority reviews the application for validity; if incomplete, it will request supplementation (only once). | Article 13, Decree 07/2016/NĐ-CP |
| Step 3: License issuance or refusal | Within 07 working days from the date of receiving a valid application. Any refusal must be in writing with clear reasons. | Article 13, Decree 07/2016/NĐ-CP |
| Step 4: Consultation with relevant ministries (if applicable) | The licensing authority seeks the opinion of the relevant line ministry within 03 days; the ministry responds within 05 days; the license is then issued within 05 subsequent days. | Clause 4, Article 13, Decree 07/2016/NĐ-CP |
Average processing time: 7–10 working days (may be longer if consultation with line ministries is required).
2.4. Processing Time and Licensing Fees for Branch Establishment in Vietnam
Pursuant to Circular No. 64/2025/TT-BTC, the official fees for branch licensing and public announcement are as follows:
| Description | Applicable Fee (Valid from 01/07/2025 – 31/12/2026) |
|---|---|
| Licensing fee | 25,000 VND / application |
| Public announcement fee | 100,000 VND / application |
| Online submission via the National Business Registration Portal | Fully exempt from all fees |
3. Rights and Obligations of Foreign Company Branches in Vietnam
After being licensed, a foreign company branch must operate within the scope prescribed by the Law on Commerce 2005 (Consolidated Document No. 113/VBHN-VPQH, 2025) and Decree No. 07/2016/NĐ-CP. Understanding its rights, obligations, and legal responsibilities is essential for ensuring compliance and minimizing operational risks.
3.1. Rights of Foreign Company Branches in Vietnam
According to Article 17 of the Law on Commerce 2005 (Consolidated Document No. 113/VBHN-VPQH, 2025) and Article 19 of Decree No. 07/2016/NĐ-CP, branches are entitled to the following rights:
– Lease offices, purchase or rent necessary facilities and equipment for operations;
– Recruit Vietnamese and foreign employees in compliance with Vietnam’s labor regulations;
– Enter into contracts and conduct commercial activities within the licensed business scope;
– Open VND and foreign currency bank accounts, and use their own seals as regulated by Vietnamese law;
– Remit profits abroad in accordance with Vietnam’s tax and foreign exchange control laws.
3.2. Obligations of Foreign Company Branches in Vietnam
Under Article 20 of Decree No. 07/2016/NĐ-CP, foreign branches must fulfill the following legal obligations:
– Maintain accounting records, prepare financial statements, and fulfill tax obligations as required by Vietnamese law;
– Submit periodic activity reports to the licensing authority (the Ministry of Industry and Trade or the provincial Department of Industry and Trade);
– Comply with regulations on labor, social insurance, information security, environmental protection, and national security;
– Bear full responsibility before Vietnamese law for all operations and obligations of the branch.
3.3. Responsibilities of the Parent Company Toward Its Branch in Vietnam
Pursuant to Clause 2, Article 3 and Article 7 of the Law on Commerce 2005 (Consolidated Document No. 113/VBHN-VPQH, 2025), the parent company bears full legal responsibility for all obligations arising from the operations of its branch in Vietnam, including:
– The branch’s tax, financial, and civil obligations;
– Liability for damages if the branch violates Vietnamese laws;
– Duty to provide information and cooperate with Vietnamese authorities during inspections or audits.
4. Common Risks When Establishing a Foreign Company Branch and Effective Solutions
The process of establishing a foreign company branch in Vietnam can be challenging if investors are unfamiliar with the legal requirements. Below are common risks and effective solutions:
– Unlegalized documents: Many companies submit business licenses or charters not yet consularly legalized, resulting in rejection.
→ Ensure all documents are translated, notarized, and consularly legalized in accordance with Article 12 of Decree 07/2016/NĐ-CP.
– Business lines outside Vietnam’s WTO/FTA commitments: If the intended activities fall outside committed sectors, licensing authorities must consult line ministries, delaying approval.
→ Verify business sectors in advance and seek legal advice from investment lawyers before submission.
– Invalid branch location: Establishing a branch in a residential building or non-commercial zone will lead to refusal.
→ Select a lawful office building or industrial zone that meets regulatory requirements.
– Tax and accounting violations: Failure to declare and pay taxes properly may result in administrative fines and back payments.
→ Engage a reputable accounting and auditing firm to ensure compliance with Vietnamese law.
– Unclear authorization between parent company and branch: Vague delegation of authority may cause the branch to act beyond its mandate.
→ Prepare a clear charter and authorization document defining the branch’s powers and limits.
– Failure to submit annual reports: Non-compliance with reporting obligations may lead to penalties or license revocation.
→ Submit annual activity reports on time in accordance with Article 32 of Decree 07/2016/NĐ-CP.
In conclusion, to ensure a smooth and compliant establishment process, foreign companies should carefully prepare their dossiers, select valid business premises, and cooperate with a professional legal advisor such as LexConsult & Partners, who can provide comprehensive support from licensing to post-establishment compliance.
5. Legal Advice from LexConsult & Partners on Establishing a Foreign Company Branch in Vietnam
Establishing a branch of a foreign company in Vietnam not only provides access to a fast-growing market but also enables enterprises to exercise better operational control. However, to avoid risks related to documentation, taxation, and legal compliance, investors should strictly follow the procedures and requirements set forth under Decree No. 07/2016/NĐ-CP and Circular No. 64/2025/TT-BTC.
LexConsult & Partners recommends that foreign investors:
– Prepare and legalize the parent company’s business registration certificate early through consular legalization and translation to prevent delays in dossier submission.
– Verify office lease contracts or premises licenses in advance to ensure the registered business location meets Vietnamese legal requirements.
– Use professional translation and legalization services experienced in FDI documentation to comply with Vietnamese legal standards.
– Check the proposed business sectors beforehand to ensure compliance with Vietnam’s WTO and FTA commitments, thereby avoiding rejection of the application.
With a team of experienced corporate and investment lawyers, LexConsult & Partners is a trusted advisor for international investors establishing foreign company branches in Vietnam—ensuring a fast, compliant, and effective process from licensing to post-establishment operations.
6. FAQ – Frequently Asked Questions on Establishing a Foreign Company Branch in Vietnam
Can a foreign company establish a branch in Vietnam?
→ Yes. According to Decree No. 07/2016/NĐ-CP, foreign enterprises that have been operating for at least five years are eligible to establish branches to legally conduct business in Vietnam.
Can a foreign company branch engage in business activities in Vietnam?
→ Yes. Branches are allowed to sign contracts, provide services, and conduct business activities within the scope stated in their Branch Establishment License.
What documents are required to establish a foreign company branch in Vietnam?
→ The dossier includes: an application form, parent company’s business license, latest financial statement, branch charter, passport of the branch head, office lease contract, and other relevant documents — all of which must be consularly legalized and notarized in Vietnamese.
How long does it take to obtain a branch license?
→ On average, 7–10 working days from the date of submission of a valid dossier. If consultation with a line ministry is required, processing time may be extended.
What tax obligations does a foreign company branch have in Vietnam?
→ Branches must register a tax code, declare and pay corporate income tax (CIT), value-added tax (VAT), and personal income tax (PIT), and submit periodic financial reports in accordance with Vietnamese law.
Can the application for branch establishment be submitted online?
→ Yes. From July 1, 2025, enterprises may submit applications online and are exempt from all fees under Circular No. 64/2025/TT-BTC.
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