In business activities, expanding the market is always a prerequisite goal of the business. Although the sale, service delivery can now be done through e-commerce platforms, the internet. Geolocation barriers are almost something that businesses can easily overcome. However, following strict legal regulations in business management activities, as well as helping to optimize market access, the establishment of branches, representative offices or business locations is also one of the optimal choices of businesses.

According to the current corporate law, branches, representative offices and business locations have fundamental differences. So, what will be the establishment process, records and procedures for establishing a branch, a representative office and a business location?

Legal basis

According to Clause 1, Article 44 of the Law on Enterprises 2020: “A branch of an enterprise is its dependent unit which has some or all functions of the enterprise, including authorized representative. The business lines of a branch shall match those of the enterprise.”

In addition, the concept of a representative office is also clearly explained according to Clause 2, Article 44 of the Law on Enterprises 2020: “A representative office of an enterprise is its dependent unit which acts as the enterprise’s authorized representative, represents and protect the enterprise’s interests. A representative office shall not do business.”

Similarly, Clause 3, Article 44 of the Law on Enterprises 2020: “A business location of an enterprise is the place at which specific business operations are carried out.”

Should you choose to establish a branch, representative office and business location?

Based on the legal provisions on branches, representative offices and business locations, the common points of branches, representative offices and business locations can be drawn as follows:

• There is no legal status;
• Operating on behalf of the Enterprise;
• All have their own registration certificates;
• Opened in a geographical location other than the corporate headquarters.

In addition to the similarities, branches, representative offices and business locations also have differences. Therefore, in order to make a decision on whether to establish a branch, representative office or business location, enterprises need to understand their differences, as well as depending on the purpose of establishment of the enterprise. Here we would like to analyze some criteria that distinguish the differences of branches, representative offices or business locations.

In terms of scale, independence as well as business functions, carrying out royalized production activities, a branch can operate almost all activities of an enterprise. Representative offices and business locations have more limitations. That is why when businesses approach, the target field, depending on the development goals, what the business wants when expanding the business to a new geographical area that the enterprise will have a suitable choice.

Registration of establishment of branches, representative offices and business locations:

According to Article 44 of the Law on Enterprises 2020 and Article 31 of Decree 01/2021/ND-CP, dossiers of establishment of branches, representative offices and business locations include the following documents:

• Notice of establishment of branches, representative offices and business locations signed by the legal representative of the enterprise;
• Copies of resolutions, decisions and copies of meeting minutes of the Members’ Council for limited liability companies with two or more members, partnerships, of the Board of Directors for joint-stock companies; resolutions and decisions of the company owner with respect to a one-member limited liability company on the establishment of branches, representative offices and business locations.
• Copies of legal documents of individuals for heads of branches, representative offices, business locations (Valid citizen identity card or identity card or Vietnamese passport)

After preparing the dossier, the enterprise will submit the dossier of registration of operation of the branch, representative office, business location at the Business Registration Office (Department of Planning and Investment) where the branch, representative office, business location is located. Within 03 working days from the date of receipt of a valid dossier, the Business Registration Office shall issue a Certificate of operation registration of branches, representative offices and business locations for enterprises. In case the dossier is not valid, the Business Registration Office shall notify in writing the contents that need to be amended and supplemented to the enterprise. The Business Registration Office shall update information about the branch of the enterprise in the National Database on Business Registration within 03 working days from the date of receipt of the notice.

Above are the legal provisions on branches, representative offices and business locations of enterprises. The article is for informational purposes not for consulting purposes and is not an advisory opinion, Vo Consultants is not responsible in any case. For each local case, please contact Vo Consultants for detailed advice.

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