TRADING IN VIETNAM
Besiding the trading with Vietnamese merchants, foreign merchant can establish it’s office operating commercial activities, such as Representative Office or Branch in Vietnam.
A Representative Office (RO) is a dependent unit of a foreign merchant, which is established under the laws of Vietnam for the purposes of exploring and promoting opportunities for commercial activities, and which is not entitled to do business directly to generate profits.
The scope of operations of a Representative Office is generally:
- To proceed with the formation of economic, commercial co-operation projects in Vietnam;
- To explore and promote opportunities for the purchase and sale of goods and the provision of commercial in Vietnam;
- To monitor and cause the implementation of contracts executed by the foreign merchant which it represents.
A foreign merchant may obtain a license for setting up a RO in Vietnam when it is duly registered in accordance with the laws of the foreign country where it has its headquarter and its business operation must not fall into categories forbidden by Vietnamese laws.
Branch is dependent unit of legal entity, having the tasks of performing all or part of the functions of the legal entity, including function of representation under authoriztion. Branch of foreign legal entity can operate it’s activities as permited and stated in the license. In general, the branch can import and export goods as listed by law.
Establishing of a commercial firm
The Vietnamese law distinguishes between companies producing or providing services and trading companies. The former legislation prohibited enterprises consisting in foreign direct investment and pure trading companies. Against it the new laws enables the foreign investors to establish trading companies. In this context the law can be interpreted in such a way that established companies with foreign direct investment can also apply for an enlargement of their license so that they will be allowed to conduct pure trading operations.