Branch Office for foreign companies in Vietnam.

The key considerations that favour a Branch over an LLC are:

• No charter capital requirement. A Branch can commence operations without committing capital into a Vietnamese entity, unlike an LLC which requires capital contribution within 90 days of the ERC.
• Simpler governance structure. There are no shareholders' meetings, board resolutions, or capital transfer registration requirements at the Branch level. Administrative changes are handled through licence amendments rather than corporate filings.
• Parent company retains full control. Because the Branch is not a separate legal entity, the parent company does not need to deal with minority shareholder issues or complex ownership structuring.
• Profit remittance without withholding tax. Profit transfers from Branch to parent company are not subject to the dividend withholding tax that applies to distributions from a Vietnamese incorporated entity.

The main constraint is the 5-year parent operation requirement and the limitation to a single Branch per province. For companies wanting full operational independence or broader capital flexibility, an LLC is typically more appropriate.

No. The parent company does not need to be physically present in Vietnam during the application process. Forra acts as the authorised agent of the parent company throughout — preparing all documents, corresponding with authorities, and handling collection of the licence.

What the parent needs to provide is: a set of properly legalised corporate documents, a signed application form (Form MD-2), and the appointment letter for the Head of Branch. All of these can be prepared and dispatched from the parent's home country. Forra provides a personalised checklist to make this as efficient as possible.

Yes. A Branch may employ both Vietnamese nationals and foreign nationals. Foreign employees must hold a valid work permit (or confirmed exemption) issued by the Authority before commencing employment. The Branch applies for the work permit on behalf of the employee.

The Head of Branch, if a foreign national, must also obtain a work permit or confirmed exemption before taking up the role. Forra's Global Mobility team manages work permit applications for Branch employees.

Failure to apply for amendment of the Branch establishment licence within the required 60-working-day window attracts a fine of between VND 20,000,000 and VND 40,000,000 (approximately USD 800–1,600).

More seriously, operating with out-of-date licence details — for example, continuing to operate after a change of Head of Branch without filing the amendment — can expose the Branch to suspension of operations. Forra tracks all changes to Branch details and prepares amendment applications proactively.

There is no statutory conversion mechanism — a Branch cannot be directly converted into an LLC under Vietnamese law. If the parent wishes to transition to an independently incorporated entity, it must go through the full company registration process separately. The two structures can operate simultaneously during a transition period.

The transition involves registering the new LLC or JSC, transferring contracts and assets, transitioning employees (requiring new employment contracts), and ultimately closing the Branch through the formal termination procedure. Forra advises on the sequencing and manages both the new company registration and Branch closure process.