Representative Office in Vietnam: Do You Actually Need One?

The Real Definition

A Representative Office (RO) in Vietnam is not a "company." It's a legal observation post — a structure that lets foreign businesses establish presence, conduct research, and build relationships without actually doing business.

Most foreign companies assume an RO is the "easy first step" into Vietnam. That's only half true. An RO is the right first step if you're not ready to commit to revenue-generating operations. If you want to sell, invoice clients, or sign commercial contracts, an RO is the wrong structure entirely.

The RO exists for a specific purpose: to let you test the market, monitor existing partnerships, and promote your brand — while your parent company retains all commercial activity offshore. It's a reconnaissance mission, not an invasion.

Understanding this distinction upfront saves foreign companies from choosing the wrong entity type, then spending months (and significant money) converting to a different structure later.

Modern and professional hallway interior of a foreign representative office in Vietnam

"A reconnaissance mission, not an invasion."

The Decision Framework

Understanding the distinction upfront saves foreign companies from choosing the wrong entity type, then spending months converting later.

Structure	Can Generate Revenue?	Can Sign Contracts?	Complexity	Best For
Representative Office	No	No (liaison only)	Low	Market research, brand promotion, contract monitoring
Branch Office	Limited	Yes (within scope)	Medium	Trading companies, specific sectors
LLC (FIE)	Yes	Yes	High	Full commercial operations
Joint Venture	Yes	Yes	Highest	Strategic partnerships, regulated industries

An RO Makes Sense If...

You want market presence without commercial operations — your parent company will handle all contracts and revenue; the RO just coordinates locally

You're monitoring existing contracts — you've signed deals with Vietnamese partners and need local staff to oversee execution

You're conducting market research before investment — you need 1-2 years to understand the market before committing to a subsidiary

You're in a regulated industry requiring local liaison — finance, insurance, pharmaceuticals, education, and law often require a formal contact point

Your parent company has operated for at least 1 year — this is a legal requirement, not a suggestion

An RO Does NOT Make Sense If...

You want to generate revenue in Vietnam — ROs cannot sell products, provide services for payment, or sign commercial contracts

You need to hire more than a small team — ROs are limited in headcount and cannot employ staff for production or service delivery

You're ready to invest and operate fully — you need a Limited Liability Company (LLC) or Joint Stock Company, not an RO

Your parent company is less than 1 year old — you're legally ineligible

You're in an industry banned from RO establishment in Vietnam — certain sectors cannot operate even as representative offices

Chose RO when they needed LLC

Wanted to 'start small' but actually needed to invoice clients. Result: 6-12 months wasted, then conversion costs.

Chose LLC when RO was sufficient

Overbuilt for a market test. Result: Higher setup costs, compliance burden, and exit complexity if market doesn't work out.

Chose Branch when RO fit better

Assumed 'branch' sounded more legitimate. Result: Unnecessary regulatory requirements for activities that didn't need them.

Requirements & Limitations

Parent Company Requirements

Legally established in home country for at least 1 year

Currently operating and in good legal standing

Not involved in industries prohibited in Vietnam

Able to provide audited financial statements

RO Head Requirements

Full civil legal capacity

Not under criminal prosecution or serving a sentence

Not banned from business management activities

If foreign: valid passport (1+ year validity) and work permit

What a Representative Office Cannot Do

Sell products or services — all commercial transactions must go through the parent company

Sign commercial contracts — ROs can only sign contracts for their own office operations (rent, utilities, staff)

Generate revenue in Vietnam — no invoicing, no payment collection

Conduct manufacturing or production — ROs are liaison offices, not operational facilities

Employ unlimited staff — headcount is restricted; you cannot build a large team

Operate indefinitely without renewal — licenses have fixed terms and require renewal

The Application Process

The most time-consuming phase is document preparation. Incorrect legalization or translation errors are the #1 cause of rejection.

Timeline Comparison

Self-Application 10-14 weeks

With CMT 6-8 weeks

CMT knows exactly what DoIT reviewers look for. 98% first-submission approval vs. ~60% for self-applications.

1

Step 1: Eligibility Verification

Confirm parent company meets 1-year requirement and office location suitability.

2

Step 2: Document Preparation (Critical)

Consular legalization, certified translations. This is where most DIY fails.

3

Step 3: Submission

Online filing via Public Service Portal followed by physical submission.

4

Step 4: Processing & Review

15-20 working days. Responding to DoIT clarifications promptly.

5

Step 5: License Issuance

Collect license and verify all details immediately.

6

Step 6: Post-License Setup

Seal, Tax Code, Bank Account within 45 days. Failure leads to fines.

CMT Consulting Scope

We don't accept every engagement. We prioritize clients who are ready for a legitimate market test.

Comprehensive Service

Market Entry Advisory

Industry analysis & structure recommendations.

One-Stop Service

License, Work Permits, Office rental, Visa.

Consular Legalization

We coordinate the complex international paperwork.

6-Month Support

Post-setup compliance & regulatory guidance.

Clients We Decline:

• Parent companies less than 1 year old

• Companies seeking to conduct commercial activities through an RO

• Clients who won't provide complete documentation

• Companies with active legal issues in Vietnam

• Clients expecting instant approval (under 20 days)

Full-Service RO Registration

From 28M VND (~1,100 USD)

Government fees

Notarization and translation

Document preparation and submission

License tracking and collection

Post-license setup guidance

Schedule Consultation

10% discount when using two or more services.