Written by: Phuong Nguyen
Representative office in Vietnam (“RO”) of a foreign entity has been regulated on Law on Commerce of 2005. That is an independent unit established for market research and promotion activities pursuant to the law of Vietnam. In addition, the RO is under management of a chief of representative office (“CRO”), who is responsible for all activities of the RO within an authorization scope of the foreign entity (including submission of reports to State authorities of Vietnam).
Before deciding / appointing a person to be the new CRO of the RO, the foreign entity should ask 04 questions as follows:
1. Who can be a new CRO?
Article 33.6 of Decree No. 07/2016/ND-CP guiding Law on Commerce of 2005 (“Decree 07”) regulated that a CRO cannot concurrently hold the following titles:
- Chief of a branch of the same foreign entity or other foreign entity;
- Legal representative of that foreign entity or other foreign entity; or
- Legal representative of an economic organization established and operating under the law of Vietnam.
In the meantime, there is no other condition for a CRO in the law of Vietnam so that the foreign entity should check whether the potential CRO is belonged to any cases above or not.
2. When will foreign entity register to change the CRO?
As the establishment license of the RO (the “RO License”) recorded the CRO’s personal information , thus the foreign entity must amend the current RO License when appointing the new CRO. By law, the entity should conduct such procedure within 60 working days from the date appointing the new CRO at the competent Department of Industry and Trade (“DOIT”).
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3. What are the required documents for registration of the new CRO?
The foreign entity must prepare a dossier including following documents:
- An application for amending the RO License (standard form);
- A letter of the foreign entity to appoint the new CRO;
- A copy of ID card or passport of the new CRO;
- A document proving that the former CRO completed all personal income tax (“PIT”) obligation for income from the CRO work; and
- An original copy of the RO License.
Of note, the DOIT practically requests the foreign entity to provide a legalized letter on appointing the new CRO and a Vietnamese version of his passport on the submitted dossier.
4. How to prove that the former CRO completed his PIT obligation?
Firstly, the foreign entity must obtain a letter from competent Tax Department confirming the completion of the former CRO’s PIT obligation in Vietnam.
If the former CRO is a foreigner, he can do his tax finalization before leaving Vietnam, or within 45 days from the date of he left Vietnam by his authorized representative. He should submit the tax finalization dossier to the DOIT .
After receiving the result, the RO can submit a dossier to request the competent Tax Department to issue a confirmation on completion tax obligation of the former CRO, including:
- Tax code of the former CRO; and
- Tax amounts (paid, unpaid, outstanding) and fines (if any).
Tax Department shall issue a result within 05 working days from the request submission date. Then, the RO can submit it along with the application dossier for amending the RO License.
