Setting Up a Foreign Branch Office in Vietnam

Opening a branch office in Vietnam allows foreign companies to tap into one of Southeast Asia’s fastest-growing markets while maintaining direct operational control.

Unlike representative offices, which are limited to non-commercial activities, branch offices can generate revenue, sign contracts, and fully engage in local business.

Why foreign investors choose branch offices

Branch offices offer the advantage of 100 percent foreign ownership and operate as an extension of the parent company. This avoids the complexity of setting up a local subsidiary while providing direct access to the Vietnamese market.

For industries like manufacturing, services, and trading, this structure provides flexibility and market presence without creating a separate legal entity.

Branch offices compared to other business structures

Branch offices differ significantly from representative offices, which are restricted to non-revenue activities, and subsidiaries, which are independent legal entities subject to local incorporation. Joint ventures offer access to local expertise but involve shared ownership and control.

For many foreign investors, branch offices combine operational capability with a streamlined legal setup.

How to register a foreign branch office in Vietnam

Assessing the feasibility of branch activities

Foreign investors should begin by evaluating whether their intended business activities comply with Vietnam’s foreign investment rules and market access commitments.

This assessment helps identify if the planned operations are permitted under local regulations and whether any sector-specific restrictions or conditions apply.

Preparing and legalizing corporate documents

The parent company must collect and legalize essential documents, including the foreign business registration certificate, audited financial statements, appointment letters for the branch manager, and the branch’s operational charter. All materials must be translated into Vietnamese and certified according to local legal requirements to ensure acceptance by authorities.

Filing the application with authorities

Once the documentation is prepared, the complete application is filed with the Department of Industry and Trade in the province or city where the branch will be located.

The authorities will review the application for completeness and compliance, typically issuing approvals within seven working days if all conditions are met. However, investors should be prepared for possible follow-up requests or clarifications.

Securing the branch establishment license

Upon approval, the company receives the official branch establishment license, granting the legal right to conduct business activities in Vietnam under the parent company’s name. This license formalizes the branch’s presence and is a critical step for launching operations.

Completing tax and post-registration steps

Following license issuance, the branch must finalize several post-registration formalities, including tax code registration, company seal creation, and the opening of corporate bank accounts. The company must also ensure compliance with foreign exchange regulations and, where applicable, fulfill capital verification obligations.

Maintaining ongoing compliance and reporting

After setup, the branch enters the operational phase, where it must maintain full compliance with Vietnamese accounting, tax, and labor laws. This includes filing tax returns, preparing financial reports, contributing to social insurance programs, and submitting annual compliance filings to relevant authorities.

Navigating licensing and permits

Depending on the sector, branch offices may need additional licenses, such as trading permits or approvals from sectoral regulators. Environmental clearances and labor permits for foreign staff may also be required. Engaging local legal advisors helps navigate these requirements efficiently and avoids unnecessary delays.

Setting up financial and tax operations

Branch offices must establish corporate bank accounts, register for corporate income tax and value-added tax, and meet all employee-related tax obligations. With Vietnam’s corporate income tax set at 20 percent, proper transfer pricing compliance is essential for cross-border transactions.

Investors should evaluate available tax incentives, particularly for projects in encouraged sectors or special economic zones.

Managing operational and compliance obligations

Foreign branch offices need valid office leases, proper labor contracts, and compliance with local employment rules, including social insurance contributions. Financial reporting must follow Vietnamese accounting standards, with regular submissions to tax and regulatory authorities to maintain good standing.

Maintaining compliance and preparing for exit

Annual license renewals, financial audits, and compliance filings are part of a branch’s ongoing obligations. Should the parent company choose to exit the market, formal closure procedures —covering tax clearances, authority notifications, and employee settlements — must be carefully followed to avoid penalties or reputational damage.

Source: ASEAN Briefing