Representative Office in Vietnam: A Complete Guide for Foreign Companies

A representative office in Vietnam is one of the most common entry options for foreign companies exploring the local market. It allows businesses to establish a legal presence, conduct market research, and build relationships without engaging in direct commercial activities.

For many international companies, especially SMEs, setting up a representative office is a low-risk way to understand the market before making a larger investment. It is also a practical first step in a broader Vietnam market entry strategy. However, this structure comes with limitations, particularly around revenue generation and operational scope.

This guide explains the key requirements, setup process, costs, and strategic considerations for establishing a representative office in Vietnam.

What is a Representative Office in Vietnam?

The office is a dependent unit of a foreign company that operates under the parent company’s name. It is not a separate legal entity and is not allowed to generate revenue or issue invoices.

Its main functions include market research, liaison activities, and promoting the parent company’s business interests in Vietnam. Many companies use representative offices as a first step before setting up a fully operational company.

Requirements to Set Up a Representative Office in Vietnam

To establish it, foreign companies must meet the following conditions:

• Parent company must be legally established
• Must have operated for at least one year
• Business scope must align with permitted sectors

Approval is typically granted by the relevant licensing authority depending on the industry.

What Activities Are Allowed and Restricted?

A representative office in Vietnam is designed for non-commercial activities. While it provides a legal presence in the market, its operational scope is clearly limited by law.

Allowed Activities

It can:

• Conduct market research and gather business intelligence
• Promote the parent company’s brand and services
• Liaise with local partners, clients, and authorities
• Monitor and support the implementation of contracts signed by the parent company

Restricted Activities

It is not permitted to:

• Generate revenue in Vietnam
• Issue invoices or collect payments
• Sign or execute commercial contracts in its own name
• Engage in trading, manufacturing, or service delivery

Because of these restrictions, this arrangement is best suited for market exploration and relationship building, rather than full commercial operations.

Step-by-Step Process to Establish a Representative Office

The process of setting up a representative office in Vietnam is relatively straightforward compared to company incorporation. It typically involves the following steps:

• Prepare required documents (business license, financial statements, company profile)
• Submit application to the licensing authority
• Obtain the representative office license
• Register tax code and office address
• Open a bank account and hire staff if needed

The licensing process follows Vietnam’s legal framework under Decree 07/2016/ND-CP, which regulates the establishment and operation of representative offices in Vietnam.

Timeline for Setting Up a Representative Office in Vietnam

The timeline for setting this up is typically:

• Document preparation: 1-2 weeks
• License approval: 2-4 weeks
• Post-license setup: 1-2 weeks

In most cases, the entire process can be completed within 4–6 weeks.

Costs of Setting Up a Representative Office in Vietnam

The cost is relatively low compared to setting up a company.

Typical cost components include:

• Government licensing fees
• Legal and consulting fees
• Office rental and administrative setup

In general, foreign companies can expect initial costs ranging from approximately $10,000 to $30,000 depending on the scope and service providers.

Is a Representative Office in Vietnam the Right Entry Strategy?

When to Choose a Representative Office

It is suitable when:

• The company wants to explore the Vietnam market before committing to investment
• Market research and relationship building are the main objectives
• The business does not require immediate revenue generation

It is often used as a first step before establishing a fully operational entity. Applications are reviewed and approved by the relevant authority, typically under the supervision of the Ministry of Industry and Trade (MOIT).

When NOT to Choose Representative Office

It may not be suitable when:

• The company intends to generate revenue in Vietnam
• Direct sales, trading, or production are required
• Full operational control is needed

Advantages and Limitations of a Representative Office in Vietnam

Advantages

• Low-cost market entry
• Simple setup process
• No corporate income tax obligations (as it does not generate revenue)
• Suitable for market research

Limitations

• Cannot generate revenue
• Limited operational scope
• Dependent on parent company
• Not suitable for commercial activities

For companies that intend to generate revenue or conduct full commercial operations, setting up a company in Vietnam is typically the more appropriate structure. A representative office is best suited for market exploration, not execution.

Choosing the right entry model depends on your business objectives, timeline, and level of commitment to the market.

For a detailed comparison of available structures, see our guide on Representative Office vs Company in Vietnam.

If your strategy involves full operations, refer to our guide on company setup in Vietnam to understand the requirements, timeline, and process.

Setting up a representative office requires careful planning to ensure compliance and alignment with your expansion strategy.

For companies evaluating the most effective entry structure, a representative office can be a practical first step, but not always the final solution.

👉 Contact GTI Partner to assess the most suitable market entry approach for your business in Vietnam.

FAQs About Representative Offices in Vietnam

Below are some of the most common questions foreign companies ask when considering a representative office in the country:

1. What is a representative office in Vietnam?

A representative is a legal presence for foreign companies in Vietnam that allows market research, liaison activities, and business development without engaging in direct commercial transactions.

2. Can a representative office in Vietnam generate revenue?

No. it is not allowed to generate revenue or issue invoices. It can only conduct non-commercial activities such as market research and relationship building.

3. How long does it take to set up a representative office in Vietnam?

The setup process typically takes 6 to 8 weeks, depending on document preparation and licensing timelines.

4. What are the requirements to open a representative office in Vietnam?

Key requirements include:

• A legally established foreign parent company
• At least 1 year of operation
• Appointment of a Chief Representative
• A registered office address in Vietnam

5. What are the costs of setting up a representative office in Vietnam?

Costs vary depending on location and service providers but generally include:

• Government licensing fees
• Office lease
• Professional service fees

6. What activities are allowed for a representative office in Vietnam?

It can:

• Conduct market research
• Promote the parent company
• Liaise with partners and clients
• Monitor contracts (without executing them locally)

7. Can a representative office hire employees in Vietnam?

Yes. It can hire both local and foreign employees, but all employment must comply with Vietnamese labor regulations.

8. Is a representative office the best way to enter the Vietnam market?

It depends on your objectives. It is ideal for market exploration, but companies planning to generate revenue may need a foreign-invested company structure instead.

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