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Representative offices of foreign traders in Vietnam: permitted and prohibited activities

3 min readFLAT LAW FIRM
Representative offices of foreign traders in Vietnam: permit

Short answer

Colleagues discussing work at the office
Illustration: Colleagues discussing work at the office

A representative office of a foreign trader in Vietnam functions only as a liaison office: researching the market, promoting trade, and advancing investment opportunities for the parent trader. It may not directly conduct profit-making business: no sales contracts, no VAT invoices, no revenue collection. Violations can lead to license revocation and administrative penalties.

Legal bases

Modern office building — corporate headquarters
Illustration: Modern office building — corporate headquarters
  • Law on Commerce 2005 No. 36/2005/QH11 (in force; consolidated document 113/VBHN-VPQH dated 28/8/2025): Chapter VII on representative offices and branches of foreign traders.
  • Decree 07/2016/ND-CP (effective 10/3/2016, in force): Article 7 (licensing conditions), Chapter III Articles 27–29 (organization and operations), Articles 36–37 (termination); license valid 5 years.

1. What may a representative office do?

  • Market research: gather information, study the market, assess business and investment opportunities for the parent trader;
  • Trade promotion: promote the trader’s image, connect with partners, attend fairs/exhibitions as a liaison;
  • Liaison representation: act as contact point between the parent trader and Vietnamese partners and authorities (excluding signing business contracts);
  • Staffing: recruit employees (under labor law; foreign employees need work permits or qualify for exemption);
  • Finance: open bank accounts serving the office’s operations; lease office premises (location must meet security and order requirements).

2. What is prohibited?

Business team meeting in a modern office
Illustration: Business team meeting in a modern office
  • NO direct profit-making business: no goods sales or service contracts; no VAT invoices; no revenue collection — the key line separating a representative office from a branch;
  • NO activities beyond the licensed scope;
  • NO lending or subleasing of office premises (Article 28.2);
  • NO more than one same-named representative office within a single province/centrally-run city;
  • The office head is responsible for the office’s operations to the parent trader and under Vietnamese law.

3. Establishment conditions and license term

  • The foreign trader is lawfully established and registered; has operated for at least 1 year (vs. 5 years for a branch);
  • Its business registration remains valid for at least 1 year from the filing date;
  • Planned activities are consistent with Vietnam’s treaty commitments;
  • The representative office license is valid 5 years and renewable.

4. Obligations to remember

  • Personal income tax for employees, business license fees, and other fiscal obligations;
  • Periodic activity reports to the licensing authority;
  • On termination: follow Articles 36–37 (notice, creditor/employee lists, return of the original license).

5. Quick distinction among the three presence forms

Representative office: liaison and promotion — no business. Branch: may provide services and sign contracts — but is not a legal entity, with the parent bearing unlimited liability. Subsidiary: a fully independent legal entity with limited liability.

Prepared by the FLAW AI Legal Council. This article is pending QA review by the Council and owner approval before publication.

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