Representative office is not permitted to perform the activity of the contracts of foreign merchant.

Representative office is not permitted to perform the activity of  the contracts of  foreign merchant.

 Vietnamese government has issued a new Decree No.07/2016/ND-CP dated 25 January 2016 (“the Decree 07”) on Representative Offices and Branches of Foreign Merchants in Vietnam. This degree will take effect on 10 March 2016 and replace will replace Decree No.72/2006/ND-CP of Vietnamese Government on Representative Offices and Branches of Foreign Merchants in Vietnam.

 The most remarkable point is that the degree has removed the activities of  representative office regarding “monitoring and speeding up the performance of the contracts signed between the foreign merchant and the Vietnamese partners or which or related to Vietnam market” which was permitted to do in the previous Degree 72. This change will impact a lot on the activities of representative offices in coming time.

 There are some changes other than the representative office is not permitted to perform the activity of  the contracts of  foreign merchant.

 The second remarkable point is the limitation to the nationality of foreign merchants: A foreign merchant is permitted to establish an representative office or branch in Vietnam in accordance with Vietnam’s commitments in international treaties of which Vietnam is a member. If the foreign merchant does not belong to a country or territory participating in an international treaty of which Vietnam is a member, establishment of the representative office or branch requires an approval from the related ministry level. This may take a long time for foreign merchants that are from countries or territories which are not a member of the treaties of which Vietnam is a member to set up its representative office or branch in Vietnam.

 The third notable change is that Decree 07 has removed many formalities such as notice of operation, press announcement etc. within 45 days from the date of the representative office license and account of representative office as required by previous Decree 72.

 In addition, under Decree 07, the deadline for submitting an application for the issuance/amendment/re-issuance of an  RO license has been extended, while the timeline for the authorities to issue their decision after receiving the application has been shortened.

Lawyervn.net – Vietnamese Lawyers

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