NEW POINTS IN THE ISSUANCE OF LICENSE FOR ESTABLISHMENT OF REPRESENTATIVE OFFICES OR BRANCHES OF FOREIGN TRADERS IN VIET NAM

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"AN NGUYÊN - AN TÂM GỬI TRỌN NIỀM TIN"

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"AN NGUYÊN - AN TÂM GỬI TRỌN NIỀM TIN"

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Decree 07/2016/ND-CP is effective as from March 10, 2016, replacing for Decree 72/2006/ND-CP. Accordingly, Decree 07 provides closely and fully regulation about conditions for the issuance, termination of operation of the representative offices, branches of foreign traders, and makes  advantages for traders to establish and operate representative offices or branches in industrial zones, processing zones, economic zones, high-industrial zones.

Conditions for issuance of license of the representative offices, branches

Under Article 4 of Decree 72/2006/ND-CP: A foreign trader shall be granted a license of the representative office or branches with following conditions: (i) being a trader recognized by the law of the country or the territory where it has been lawfully established or made its business registration; (ii) having been operating for at least one (1) year in order to be eligible to open representative offices in Vietnam, or at least five (5) years to open branches after its lawful establishment or business registration in its country.

In addition to the conditions as provided in Decree 72, Decree 07 adds that registration place of foreign trader or recognition must be the countries or territories involved in the international treaties in which Vietnam is a member.

Competent authorities for the issuance of license

Under Decree 72/2006/ND-CP: (i) the Ministry of Trade and Industry shall issue, re-issue, amend, supplement, extend or withdraw of the license for establishment of branches, (ii) Department of Industry and Trade shall grant, re-grant, amend, supplement, extend or withdraw of the license of representative offices .

Currently, Decree 07/2016/ND-CP provides that the issuance, re-issuance, supplement, extension or withdraw of the licenses of representative offices shall be implemented by the Department of Industry and Trade in provinces and cities under the central management where the head office of such representative office is located. In case the location of the representative office is in industrial zones, processing zones, economic zones, high-industrial zones, the Management Board of industrial zones, processing zones, economic zones, high-industrial zones (hereinafter referred to as the Management Board) shall issue, re-issue, amend, supplement, renew and revoke of the license for establishment of representative offices. The Ministry of Industry and Trade shall issue, re-issue, amend, renew and revoke of the license of branches if the establishment of branches is not stipulated under any specialized law.

Termination of operation of the representative offices, branches

Decree 72/2006/ND-CP stipulates the following case for the termination of the operation of the representative offices, branches: (i) it is so requested by foreign traders and approved by competent authorities; (ii) foreign traders terminate their operation under laws of countries where such traders have been established or made business registrations; (iii) foreign traders do not apply for extension of the licenses of representative offices or branches upon the expiration of operation; (iv) the licensing authorities refuse to extend the licenses of the representative offices or branches upon the expiration of operation; (v) the licenses of representative offices or branches are withdrawn.

Decree 07/2016/ND-CP provides additional case for termination of the operation of the representative offices or branches. Accordingly, the foreign traders, representative offices or branches  fail to meet conditions as provided by laws during the operation term, they will be terminated.

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