MAIN CONTENT OF THE ARTICLE

·
What is a Company Branch?
Establishing a branch means creating one or more affiliated units of the company. In
which, the branch performs one or more functions of the parent company, including the
function of authorized representative. The branch's business lines must be consistent
with the enterprise's business lines and lines.
 The branch uses the name of the parent company, along with the additions
corresponding to that branch.
 The company can establish branches in Vietnam and abroad. In Vietnam, a
company can establish one or more different branches in a locality determined by
administrative boundaries.
 The establishment of a branch complies with State regulations on conditions,
documents and procedures.

· Outstanding advantages of registering to establish a company branch

By implementing procedures to open a company branch, businesses expand their

business activities and increase their competitiveness. Products and services are thus
made available to a wider market. Therefore, registering to establish a branch gives
businesses outstanding potential advantages. Notable include:
 Branches have the ability to conduct business activities autonomously.
 Branches have the right to have their own stamp and sign business contracts.
 Has the status of an independent unit in tax reporting and corporate tax payment.
 The company has the opportunity to reach customers and partners more
conveniently and easily when expanding branches in different geographical
areas. Thanks to that, transactions and contract signing take place more
effectively.
 Establishing a branch is an essential need and development opportunity for
businesses.

· Conditions that need to be met to establish a company branch

O Conditions related to the branch's status
The company needs to be incorporated before establishing a branch.
Specifically, to carry out procedures to establish a branch, a Business
Registration Certificate is required. Therefore, it is not possible to carry out
branch establishment procedures and procedures at the same timeopen a
company.
O Conditions related to branch name
 Branch names use letters in the Vietnamese alphabet, the letters F,
J, Z, W, numbers and symbols.
 The company branch name must include the company name along
with the phrase "Branch". For example: Branch of Meyer Vietnam
Co., Ltd.
O Conditions on the location of the branch's headquarters
 The address used to locate the branch's headquarters must be
clearly and accurately determined within the territory of Vietnam.
This address has 4 levels, along with phone number, fax number
and email (if any).
 The company can establish branches in Vietnam and abroad. In
Vietnam, a company can establish one or more different branches
in a locality determined by administrative boundaries

O Conditions related to the branch's business lines

 The registered business line of the branch must be consistent with
the business line registered by the enterprise.
 Thus, the branch can only register the professions that the
company has registered.

O Conditions related to branch heads

 The head of the branch can be another person or a company
member who has full civil capacity.
 The head of the branch does not have a suspended tax code on
the national business registration and tax registration system.

O Conditions on type of branch operations

§ There are two different forms of branch accounting: independent
or dependent. Both of these forms do not have legal status, are
issued VAT invoices independently of the company, and generate
business activities. However, these two forms have differences in
tax reporting:
§ Establishment of an independent accounting company branch
§ Branches proactively determine taxable incomeand
expenses.
§ The branch's income tax declaration and payment is
not related to the business performance of the
company and other branches of the same company.
§ Carry out financial reports, complete bookkeeping,...
 According to the Accounting Law, the branch's accounting
department conducts independent accounting as an accounting
unit.

§ Establishment of a branch of a dependent accounting company

§ All revenue documents, data and expenses are
transferred to the company for general accounting at the
end of the year financial statements.
§ Data of branches combined with the company for
accounting. From there, fulfill corporate income tax
obligations.
 § Data in the branch's books are part of the company's
books.
§ The branch's accounting department is the company's
accounting unit.
· Documents for establishing company branches correspond to the types of
companies
For each different type of company, the branch establishment documents will be
different. For example, the documents required to establish a branch of a limited
company are different from those of a joint stock company and other types.
Below are the required documents to carry out procedures to open a company
branch.
O Documents when carrying out procedures to open a branch of a one-
member limited liability company
To carry out the procedures for opening a branch of a limited liability
company or the procedure for establishing a branch of a limited company,
businesses need to prepare the following documents:
§ Sample notice of registration for establishment of a limited
company branch (Refer to the attached Appendix of Circular No.
20/2015/TT-BKH)
§ Document of the company owner's decision regarding the
establishment of a branch;
§ Decision sheet on appointment of branch head;
§ Authorization document for individual representative to carry out
procedures;
§ Legal copy of personal legal documents (One of the documents:
ID card, ID card or passport) of the branch head.
§ Legal copy of personal legal documents of the authorized person.

O Documents need to be drafted for procedures to open a branch of a 2-

member limited liability company
Procedures for opening a branch of a 2-member limited liability company
require documents including:
§ Sample notice of registration to establish a branch of a 2-member
LLC;
§ Document of decision of the Board of Members regarding the
establishment of a branch;
§ Decision sheet on appointment of branch head;
§ Minutes of establishing a branch of the Board of Members;
§ Legal copy of personal legal documents (One of the documents:
ID card, ID card or passport) of the person establishing the branch.
§ Authorization document for individual representative to carry out
procedures.
§ Legal copy of personal legal documents of the authorized person.
O Documents to establish a branch of a joint stock company
Document components that need to be prepared for the application to
establish a joint stock company branch include:
 § Sample notice of registration of branch operation of a joint stock
company.
§ Document of decision of the Board of Directors related to
establishing a branch;
§ Minutes of establishing a branch of the Board of Directors.
§ Decision sheet on appointment of branch head;
§ Authorization document for individual representative to carry out
procedures.
§ Legal copy of personal legal documents of the branch head
§ Legal copy of personal legal documents of the authorized person.
O
· Where to submit application to establish a company branch?
O Once a complete and valid dossier has been drafted, the business
owner or service provider partner will submit the dossier and pay the fee
at the Department of Planning and Investment - where the company plans
to locate its headquarters.
O Within 5 working days from the date of application, this agency will
process the application and respond on whether the application is valid or
not. In case the authorities refuse to issue the Branch Establishment
Registration Certificate, there will be a written notice stating the reason or
request for amendments and supplements, if any.

· Procedures to be followed when establishing a company branch

O Step 1: Submit application to register to establish a branch
The branch head or authorized person will submit the application at the
Department of Planning and Investment - where the enterprise's
branch headquarters is located. The second way is to submit an
application to open a company branch online using the electronic
information portal.
O Step 2: Wait for the branch establishment certificate to be issued
After receiving the application, the Business Registration Office will
review it. If the dossier is not in accordance with regulations, this
agency will send an official dispatch requesting correction and
supplementation. If the application is complete, the branch will be
issued a certificate.
O Step 3: Tasks that need to be done after establishing a branch
§ The newly established branch needs to publish information on the
national information portal.
§ Register and announce the branch's carpentry seal.
§ Carry out tax declaration and pay taxes according to regulations.
§ Branch signs need to be made and hung at the branch
headquarters.
§ The branch creates a bank account and registers a digital
signature for itself. In addition, it is necessary to issue a VAT
invoice to the branch.
· Fees for establishing a company branch
Fees for establishing a company branch will include fees to be paid to state agencies
and company service fees. In particular, the state fees for branch establishment are as
follows:
 Fee for applying for a branch establishment registration certificate
 Fee for publishing information on branch establishment
 Seal engraving fee for company branches
 Fees for purchasing electronic signatures for branches
 Fees for registering electronic invoices and issuing notification of invoices
 Fees for making company branch signs

· Announcing information about the establishment of a company branch after

establishment

After completing the branch establishment procedures, you will receive a branch
registration certificate. Next, the business needs to send the tax authority
information to register branch operations. At the same time, submit the initial tax
declaration in case the branch is located in another province/centrally-run city. In
addition, the branch is responsible for submitting quarterly and annual tax reports
to the tax authority.
· What taxes do company branches need to pay?
The company branch is obliged to pay taxes depending on the form chosen. The
payment of taxes by branches is classified into 02 forms of independent or
dependent accounting as follows:
O Pay license tax to the branch
§ Case 1: For independent accounting branches:
- The branch declares and pays license tax at the branch
management agency.
§ Case 2: Dependent accounting branch:
- If the company branch is in the same province as the
head office, the branch goes to the head office tax office to
submit the license tax declaration.
- If the company branch is in a different province from the
head office, the branch submits the declaration and license
tax at the branch's tax office.

O Pay Value Added Tax to the branch

For VAT declaration, both dependent and independent accounting
branches declare VAT themselves.
O Pay corporate income tax to the branch
 If the branch is independently accounted for, the branch's corporate
income tax declaration filing will be done directly at the tax agency
where the branch is headquartered without going through the
parent company.
 If the branch does dependent accounting, the branch does not
need to declare and submit corporate income tax returns. The head
office will submit tax declarations for the branch's income.
· When to establish a company branch?
o After the application is properly received, the Provincial Business
Registration Office will review the application. Then, enter information into
the National Enterprise Information System to request a branch code.
Next, this agency will issue the enterprise's branch registration certificate.
If the branch registration dossier is not valid, this agency will notify you in
writing clearly stating the content that needs to be amended and
supplemented.
o Within 07 working days from the date of receiving the results of the Branch
Operation Registration Certificate, the enterprise must send a written
notification to the Provincial Business Registration Office where the
enterprise is headquartered. To supplement the business registration
dossier and re-issue the Business Registration Certificate.