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Updated rules for establishing a representative office in Vietnam.

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Updated rules for establishing a representative office in vietnam

The Vietnamese Government issued Decree 7/2016/ND-CP (“Decree 7”) on 25 January 2016, outlining updated rules for establishing a Representative Office in Vietnam for foreign companies. This new Decree comes into effect on 10 March 2016.

Significant change

The new Decree has removed the ability of new Representative Offices in Vietnam of foreign companies to “monitor and promote the performance of contracts signed with Vietnamese partners or those relating to the Vietnamese market on behalf of its foreign parent”. This is a significant restrictive change, with the remaining permitted service lines for Representative offices under the Decree now being:

  • undertaking market research;
  • acting as a liaison office; and
  • promoting investment opportunities for the foreign parent.

This change is significant in the Vietnamese context, as many Representative Offices are established to manage contracts with Vietnamese manufacturing or service partners. Foreign companies will now have to reconsider how they intend to structure their operations to manage these contracts when considering establishing a Representative Office in Vietnam.

Updated on January 2, 2024

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