The Government on July 25, 2006 issued Decree No. 72/2006/ND-CP detailing implementation of the Trade Law’s regulations on representative offices and branches of foreign businesses in Vietnam.

The Decree includes 5 Chapters and 32 Articles detailing the Trade Law’s regulations on establishment, operation, interests and obligations of representative offices and branches of foreign businesses in Vietnam.

Under the Decree, foreign businesses can establish representative offices and branches to conduct purchase of commodities and other related activities in accordance with Vietnam’s commitments in international agreements that the country is a member.

Foreign businesses are allowed to establish their representative offices and branches in Vietnam if they meet the conditions as follows: being legally recognized by the countries or territories of establishment, having operated for at least 01 year (for those applying for establishment of representative office) and 05 years (for those applying for establishment of branch). Representative Office Licence and Branch Licence are valid for 05 years but no longer than validity of Business Registration Certificate or other alternative documents of foreign businesses.

Representative offices can have the functions of contacting, promoting construction and realization of cooperation projects of foreign businesses in Vietnam, researching the market to facilitate purchase of goods and services for the businesses that they represent. Branches can carry out activities in accordance with their Licence.

The Ministry of Trade is responsible for granting Licence for establishment of branches and Departments of Trade of provinces and cities under direct central management are in charge of granting licence to establishment of representative offices in their localities.

The Decree also details responsibilities of State management, supervision, inspection and sanction on violations of representative offices and branches. The Decree has replaced previous regulations on representative offices and branches of foreign businesses as specified in Decree No. 45/2000/ND-CP dated September 6, 2000 of the Government on representative offices and branches of foreign businesses and foreign tourist firms in Vietnam.

Representative offices and branches which were licenced before the Decree comes into effect will continue operation in accordance with their Licence and must proceed for re-grant of Licence in compliance with the Decree within 06 months since it becomes effective.

The Decree comes into effect in 15 days since it is publicized in the Gazette.

(Source: The Ministry of Trade)