Establishing a branch is a strategic move that allows businesses to have a direct presence in new markets without changing their core legal structure. Under current regulations, this process typically takes 3 to 5 business days, with the all-inclusive service fee varying depending on the region and required processing speed.
A branch office performs all or part of the functions of a business, including the function of representation by authorization. Using professional services will help you optimize your tax records, ensure the legality of the headquarters, and receive results directly without the need for multiple trips.
What is branch establishment and why should businesses expand right now?
According to the 2020 Enterprise Law, a branch is a subsidiary unit of an enterprise, tasked with performing part or all of the enterprise's functions, including the function of representation by authorization. The branch's business lines and activities must be consistent with those of the parent enterprise.
To help you get a clearer picture before making expansion decisions, we compare the following popular commercial presence models:
| Comparison criteria | Branch | Representative Office | Business location |
|---|---|---|---|
| Business functions | Authorized to conduct business and issue invoices. | No trading allowed, only transactions. | Authorized to conduct business |
| Legal personality | It has no legal personality. | It has no legal personality. | It has no legal personality. |
| Tax identification number | It has a 13-digit tax identification number. | It has a 13-digit tax identification number. | 5-digit code (depending on branch/company) |
| Tax declaration | Independent or dependent | No business tax is incurred. | Completely dependent |
Note that the choice of model depends entirely on your goals: If you want to directly sign contracts and sell locally, a branch office is the best option.
Benefits of using professional branch establishment services
As businesses grow, handling administrative procedures in-house can lead to unnecessary errors. Below are the practical benefits that professional legal services bring to our clients:
- Save as much time as possible researching legal regulations and preparing complex documents.
- Eliminate the risk of applications being returned due to incorrect information or failure to meet the registered address requirements.
- Receive strategic tax advice to optimize cash flow between the head office and branches.
- Expedite the completion of supporting procedures such as obtaining a company seal, digital signature, and registering for electronic invoices.
Conditions and documentation required for establishing a branch office according to the latest regulations.
For the establishment process to proceed smoothly, the business needs to meet the conditions regarding the name (must include the business name followed by the phrase "Branch"), the headquarters (cannot be a collective housing building or apartment), and the head of the branch.
In terms of documentation, businesses need to prepare the following important items:
- Notification of branch establishment using the form prescribed in Decree 01/2021/ND-CP.
- Resolutions, decisions, and copies of meeting minutes of the Board of Members or Board of Directors regarding the establishment of the branch.
- A certified copy of the branch manager's legal documents (ID card, passport).
- Authorization letter for a legal service provider.
The process for providing branch establishment services at a reputable company.
We apply standardized workflows to ensure the best interests of our customers, specifically through the following stages:
- Step 1: Receive information and verify the legal validity of the proposed name and address.
- Step 2: Prepare the complete set of documents and send them to the client for signing in person.
- Step 3: Submit your application online through the National Business Registration Portal and pay the required fees.
- Step 4: Monitor feedback from the business registration authority and address any arising issues.
- Step 5: Receive and hand over the Branch Registration Certificate and seal (if any) to the customer.
Distinguishing between independently accounting branches and dependent accounting branches.
This is the most important content that will directly affect the company's accounting operations in the future.
An independently accounting branch has its own accounting department, is responsible for its business results, and pays corporate income tax locally. Conversely, a dependent accounting branch usually transfers all data to the head office for tax settlement.
The selection should be based on the specific criteria in the table below:
| Characteristic | Dependent accounting | Independent accounting |
|---|---|---|
| Accounting system | Optional, managed by the parent company. | A complete accounting system is mandatory. |
| Bill | Use a company invoice or a personal invoice. | Use separate invoices. |
| Corporate Income Tax | The parent company files and submits the declarations centrally. | Self-declaration and submission at the branch location. |
| Stamp | Often used for simple transactions. | Used for signing contracts and financial documents. |
Expert advice: If you want centralized management and the branch is just a small point of sale, choose dependency. If the branch is a large profit center with separate management, independent accounting will be more transparent.
Costs and time required to complete branch establishment services.
We understand that financial transparency is key to building trust. Below is a sample fee schedule for our branch establishment services:
| Service category | Government fees (VND) | Service fee (VNĐ) | Execution time |
|---|---|---|---|
| Basic Package | 100.000 | 1,000,000 – 1,500,000 | 3-5 business days |
| Express (Express) Package | 100.000 | Contact directly | 1-2 business days |
| Complete package (Includes stamp + digital signature) | According to the price list of the Ministry of Public Security. | Combo deals | According to the file progress |
Please note: Government fees include registration fees and fees for publishing business registration information. Service fees may vary depending on the province/city where the branch is located.
Important notes after obtaining a branch operating license.
After receiving the license, businesses should not be complacent but should immediately take the following steps to avoid administrative penalties:
- Display signage at branch offices in accordance with regulations. According to Decree 122/2021/ND-CP, failure to display signage can result in fines ranging from 30 to 50 million VND.
- Declare and pay the business license fee. According to Decree 22/2020/ND-CP (Source: Law Library), a branch is exempt from the business license fee in the first year if the enterprise is newly established in that year.
- Notify the authorities of the seal design if the business uses a separate seal for its branch.
- Open a bank account and notify the tax authority directly of the account number.
Frequently Asked Questions about Branch Establishment Services
Can a newly established company open a branch immediately? What is the maximum number of branches a company can establish? Does the branch have the right to sign economic contracts? Is it possible to convert a branch from a dependent accounting system to an independent one?
Why do clients trust our legal services?
With years of experience in business consulting, we are committed to providing a superior service experience. Our team of lawyers not only handles paperwork but also advises you on a sustainable growth roadmap.
We are committed to protecting all business information, providing real-time progress reports, and offering ongoing after-sales support following delivery of results. Your success is the measure of our credibility throughout our journey alongside the Vietnamese business community.
Conclude
Establishing a branch office is not simply about completing administrative paperwork; it's also a crucial legal stepping stone for businesses to expand and capture market share. A solid start with proper documentation, a suitable accounting model, and strict adherence to tax regulations will allow you to focus entirely on your core business activities with peace of mind.
Don't let procedural barriers slow down your business's growth. With the support of professional branch establishment services, you will receive the most optimal solution, saving costs and ensuring absolute legal safety. Let us accompany you on your journey to expand your scale and build a prosperous business system.
Contact information for MAN – Master Accountant Network
- Address: 19A, 43rd Street, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Other services
- Auditing: Auditing Services, Construction Auditing Services, Financial statement audit services
- Accounting and Taxation: Tax accounting services, Tax report, Transfer Pricing Advisory. Tax Accounting Services, Tax reporting services, Transfer Pricing Service, Affiliate Trading Service
- Legal: Work permit services, Business registration certification services, Investment Certificate
- Other: Transfer Pricing Service, Affiliate Trading Service, Business Operations Consulting Services
Content production is overseen by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, and financial consulting.
