A representative office in Vietnam lets a foreign company have a licensed presence, staff and an address without setting up a full company. It can research the market, meet buyers and support distributors, but it cannot sell, invoice or earn revenue. Under Decree 07/2016/ND-CP, the foreign company must have operated for at least one year, the licence lasts five years, and it is issued by the provincial Department of Industry and Trade. This guide explains when an office is the right first step, how to set one up, what it may and may not do, and how to move to a company later.
Wisematch works with foreign brands entering Vietnam through trade fairs, distributor searches and company formation. Many of our clients start with exactly this question: office or company? This page is part of our company formation Vietnam series.
Representative Office In Vietnam At A Glance
| Item | Rule |
|---|---|
| Legal basis | Commercial Law 2005 and Decree 07/2016/ND-CP |
| Who can open one | A foreign trader legally registered abroad that has operated for at least one year |
| Licence issued by | Provincial Department of Industry and Trade where the office will be |
| Licence term | Five years, and not beyond the remaining term of the parent’s own registration |
| Can earn revenue | No |
| Can hire staff | Yes, Vietnamese and foreign |
| Head of office work permit | Exempt under the Labour Code 2019, with confirmation |
| Corporate income tax | Not payable, since there is no revenue; personal income tax on salaries applies |
Sources: Commercial Law 2005, Decree 07/2016/ND-CP, Labour Code 2019 Article 154.
What A Representative Office Can And Cannot Do
What It Can Do
- Act as a liaison office for the parent company
- Research the market: prices, competitors, channels, regulations
- Promote the parent’s products and investment opportunities, including at trade fairs
- Find, meet and support distributors, agents and customers who buy from the parent
- Monitor the performance of contracts signed by the parent in Vietnam
- Hire staff, rent an office, open a bank account for operating expenses
What It Cannot Do
- Sell goods or services, or issue invoices in Vietnam
- Sign sales contracts in its own name
- Import goods for sale
- Earn any revenue or commission
- Sublease its office
The line is clear in principle and easy to cross in practice. A regional sales team that negotiates prices and closes orders, with invoices issued from abroad, can look like a business operating without a licence and can create a permanent establishment for tax. If your Vietnamese team will be selling, not supporting, a company is the safer structure.
When A Representative Office Is The Right Choice
An office fits three situations we see often.
Testing The Market Before Committing Capital
A food or consumer brand that exhibited at Vietfood Ho Chi Minh City and found interest from distributors may want people on the ground for a year before investing in a company. An office allows that at lower cost and with no capital requirement.
Supporting A Distributor Who Imports
When a Vietnamese distributor imports and sells, the foreign brand’s job is marketing support, training and quality control. An office does exactly this, and keeps the brand close to the market without competing with its distributor.
Sourcing And Quality Control
Buyers sourcing from Vietnam, for example coffee, cashew, seafood or furniture, often open an office to find suppliers, inspect production and manage shipments. The purchase contracts are signed by the parent abroad.
When A Company Is Better
Choose a company instead if the Vietnamese entity must invoice customers, import and hold stock, sign contracts locally, bid for projects, or receive payments. A company also makes sense when the founder wants to live in Vietnam on an investor visa: an office gives no investor visa, while a company with capital of VND 3 billion or more gives a DT3 visa and a three-year residence card. Our guide to the IRC and ERC explains the company route.
How To Set Up A Representative Office In Vietnam
1. Check The Parent’s Eligibility
The parent must be a trader registered under the law of its country and must have operated for at least one year since registration. Its registration must also have enough time left, because the office licence cannot outlast it.
2. Prepare And Legalise Documents
The core file is the application on the prescribed form, a copy of the parent’s business registration certificate, a document appointing the head of office, the parent’s audited financial statements or another document proving its activity in the latest financial year, the head of office’s passport or identification, and documents on the office location such as a memorandum of lease. Documents issued abroad must be legalised by a Vietnamese embassy or consulate and translated into Vietnamese. Vietnam does not accept apostilles alone.
3. Secure An Office
The office must be in premises that may legally be used as an office. Residential condominium apartments are not allowed. Serviced offices are commonly accepted when the lease is in order.
4. File With The Department Of Industry And Trade
The provincial Department of Industry and Trade where the office will sit issues the licence. Decree 07/2016 sets a short processing time for a complete file, with longer times where the department must consult a ministry because the parent’s field is specialised. In practice the legalisation abroad takes longer than the licence itself.
5. Start Operating
After the licence, the office makes its seal, registers for a tax code to withhold personal income tax on salaries, opens a bank account, hires staff and publishes the required information. The head of office applies for confirmation of work permit exemption and then a temporary residence card.
The Head Of Office And Staff
The head of a representative office is exempt from a work permit under Article 154 of the Labour Code 2019, though the exemption should be confirmed with the authority. This is one of the practical advantages of an office: a foreign manager can be on the ground quickly, without proving expert or manager status with degrees and experience letters. Other foreign staff of the office do need work permits unless another exemption applies. See our work permit Vietnam guide.
The office pays salaries from funds transferred by the parent and withholds personal income tax for its employees. It also makes social insurance contributions for Vietnamese staff, and for foreign staff where the rules require it.
Ongoing Duties
Annual Activity Report
The office reports its activities to the licensing department once a year, early in the year, and when asked. Late or missing reports are a frequent cause of fines and can count against the office at renewal.
Changes To The Licence
A new head of office, a new address or a change in the parent’s name all require an amendment to the licence. Moving to another province means closing and opening again, not amending.
Renewal
The licence can be extended before it expires, provided the parent still exists and the office has complied with its reporting duties.
Moving From Representative Office To Company
An office cannot be converted into a company. When the business is ready to trade, the parent sets up a new company, usually a 100% foreign-owned LLC, through the IRC and ERC process, and then closes the office or keeps it for a different role. Staff can move to the new company, and the office lease can be transferred if the landlord agrees.
The good news is that a year of office operation makes the company file stronger. The parent knows its local partners, has a realistic budget and can describe its project in terms licensing officers recognise. Many of the files we see that move fastest are of this kind.
| Stage | Typical structure | What it does |
|---|---|---|
| Market test | Trade fair plus distributor, no entity | Validate demand and price |
| Presence | Representative office | Support distributor, research, build relationships |
| Operations | 100% foreign-owned LLC | Import, invoice, hire, sell |
| Expansion | Branch or business location in a second city | Cover north and south |
A First-Year Plan For A Food Brand’s Office
Here is how we usually plan the first year for a foreign food or beverage brand that opens an office in Ho Chi Minh City to support a distributor. It is a composite of real projects.
| Months | Focus | Output |
|---|---|---|
| 1 to 2 | Licence, office, head of office on the ground | Office licensed, bank account, first local hire |
| 2 to 4 | Distributor support: product registration, Vietnamese labels, price structure | Products cleared for sale by the distributor |
| 4 to 6 | Retail and food service visits with the distributor’s sales team | Listings in first chains or HORECA accounts |
| 6 to 8 | Trade fair: exhibit or co-exhibit with the distributor | New regional distributors, buyer leads |
| 8 to 12 | Review sell-out data, decide on a second region or a company | Go or no-go on full company formation |
The trade fair in months 6 to 8 often decides the next step. Vietfood & Beverage – ProPack runs in Ho Chi Minh City in August and in Hanoi in November, so a brand based in the south can use the Hanoi edition to find northern distributors without opening a second office.
What To Budget For
The main cost items for an office are rent, salaries and social insurance for local staff, the head of office’s residence and travel, legalisation and licensing, accounting and payroll services, and marketing support for the distributor, such as samples, tastings and trade show participation. There is no capital to contribute and no corporate income tax, but every cost is funded by the parent, so the office should be measured against the distributor’s sales it supports.
What To Measure
We suggest three numbers: the distributor’s monthly sell-out by channel, the number of active points of sale, and the number of qualified leads from events. If those numbers grow for two or three quarters, the case for a company that imports directly usually makes itself.
Representative Office, Branch Or Company
Some investors ask about a branch of the foreign trader. A branch can trade, but the parent must have operated for at least five years, the licence is issued at ministry level, and the scope follows Vietnam’s international commitments. In practice it is rarely the best route for a company entering Vietnam for the first time. A subsidiary LLC gives more flexibility and is better understood by banks and partners.
Common Mistakes With Representative Offices
Selling Through The Office
Staff who quote, close and collect for the parent put the office outside its licence and may create a taxable presence.
Using An Apartment As The Office
Not accepted for licensing, and a problem at inspection.
Forgetting The Annual Report
Easy to miss in a small office, and it counts at renewal.
Choosing An Office When The Founder Needs A Visa
An office gives the head an exemption from a work permit, but no investor visa. A founder who wants a long residence card through investment needs a company.
How Wisematch Helps
We help foreign companies decide between an office and a company, prepare the licence file, coordinate legalisation abroad, set up the office and its staff, and later form the company when the business is ready. Because we also sell trade fair space and organise buyer meetings, the office can start working on the market from week one. Our founder, Maximillien Quan Pham, leads market entry projects with a licensed legal adviser. For the full picture, read how to start a business in Vietnam as a foreigner and our guide to the trading company in Vietnam.
Frequently Asked Questions About Representative Offices In Vietnam
Can A Representative Office In Vietnam Earn Revenue?
No. It can promote, research and support, but it cannot sell, invoice or earn commission.
How Long Is A Representative Office Licence Valid?
Five years, and never longer than the remaining term of the parent’s registration. It can be extended.
Who Issues The Licence?
The provincial Department of Industry and Trade where the office is located.
Does The Parent Company Need A Minimum Track Record?
Yes, at least one year of operation since registration in its home country.
Does The Head Of Office Need A Work Permit?
No. The head of a representative office is exempt under the Labour Code 2019, subject to confirmation. Other foreign staff need permits unless another exemption applies.
Can A Representative Office Become A Company?
Not by conversion. The parent sets up a new company and then closes or repurposes the office.
Is A Representative Office Cheaper Than A Company?
Usually, because there is no capital to contribute, no corporate income tax and lighter accounting. But it cannot earn revenue, so it is a cost centre funded by the parent.
What Is The Difference Between A Representative Office And A Branch?
A branch can trade within its licensed scope; an office cannot. Branches require a parent with at least five years of operation and are licensed at ministry level.
