Decree 40-CP in 1994 promulgating the Regulation on Setting Up Representative Offices of Vietnamese Enterprises Abroad

DECREE

ON PROMULGATING THE REGULATION TO ESTABLISH REPRESENTATIVE OFFICE OF VIETNAMESE ENTERPRISE IN FOREIGN COUNTRY

THE GOVERNMENT

Pursuant to the Law on the Organization of the Government dated 30th September, 1992;
To facilitate the Vietnamese enterprises to expand the economic and trading activities with the customers abroad;
On the proposal of the Minister of Trade;

DECREES

Article 1

To promulgate, accompanying this Decree, the regulation to establish representative office of Vietnamese enterprise in foreign country.

Article 2

This Decree comes into force from the date of signing. All the previous regulations contrary to this Decree shall be abrogated.

Article 3

Minister of Trade and other Ministers, Heads of organs at ministerial level, Heads of Departments under the Government and Chairmen of the People's Committees of provinces, cities under the Central Government shall be responsible for the implementation of this Decree.

REGULATIONS

ON THE OPENING OF REPRESENTATIVE OFFICES OF VIETNAMESE BUSINESSES IN FOREIGN COUNTRIES
(Issued along with Decree No.40-CP on the 19th of  May, 1994 of the Government).

Chapter I

GENERAL PROVISIONS

Article 1 :

Vietnamese businesses of various economic sectors, irrespective of their business line and management level, can apply for permission to set up a representative office in a foreign country if they fulfill the conditions set by these Regulations.

Article 2 :

The representative office of a Vietnamese business in a foreign country (hereunder called Rep Office) is a part of the business which, on behalf of the business, conducts economic and commercial relations with foreign trading partners.

Article 3 :

Such a Rep Office does not belong to the system of Representations of the Socialist Republic of Vietnam in foreign countries, but is placed under the administrative State management of Vietnam's Representation in the country which receives the Rep Office (hereunder called host country).

Article 4 :

The Minister of Trade is authorized to consider, grant, extend, revoke or cancel permits to open Rep Offices in foreign countries, and organize the management and control of their activities in accordance with these Regulations.

Chapter II

CONDITIONS AND PROCEDURE FOR GRANTING PERMIT TO SET UP A REP OFFICE

Article 5 :

A business shall be granted a permit to set up a Rep. Office if it meets the following conditions:

1. The business is established and registers to operate in accordance with law;

2. The business needs to set up a Rep Office to conduct economic and commercial relations with trading partners in the host country;

3. The business has fund to ensure the operation of a Rep Office.

Article 6 :

Those businesses, which meet the conditions specified at Article 5 of these Regulations, but which deem it not advisable to set up a Rep Office of their own, may agree among themselves to propose the Ministry of Trade to set up a common Rep Office in a foreign country.

The office, staff and personnel of a Representation of the Socialist Republic of Vietnam in a foreign country are not allowed to carry out the task of a Rep Office in whatever form.

Article 7 :

The director of a business which has a Rep Office in a foreign country shall appoint, dismiss and recall the chief and personnel of the Rep Office in conformity with the State regulations on the appointment of staff to work for a specific period of time in a foreign country.

If necessary, a Rep Office can recruit or hire foreign personnel by mutual agreement in accordance with the laws of Vietnam and the host country.

Article 8 :

The dossier of an application for a permit to set up a Rep. Office in a foreign country to be sent to the Ministry of Trade shall include:

1. An application by the director of the business concerned specifying the aim, requirements and plan of activities of the Rep Office, the time of its opening, and its location.

2. Copies of the business license signed by the notary public and its registration certificate in accordance with the law in force.

3. Documents showing that the business is qualified according to stipulations at Point (2) and (3) under Article 5 of these Regulations.

With regard to State-owned businesses, aside from the above-mentioned documents, they must also submit a note from the public office in charge of the business (the Ministry or the People's Committee of the province or city concerned) stating its agreement to let the business set up a Rep Office in the specified foreign country.

Article 9 :

Within 20 days from the day it receives a regular dossier, the Ministry of Trade must answer in writing whether or not it permits the business concerned to set up a Rep Office in the specified foreign country.

Article 10 :

Within 6 months from the day when the Ministry of Trade grants the permit, the business concerned must complete the establishment of its Representative Office and report it to the Ministry of Trade. Past this time limit, if the business has not  yet opened its representative office and does not receive an extension by the Ministry of Trade (for another 6 months at most), then the Ministry of Trade must revoke this permit.

Chapter III

OBLIGATIONS AND RIGHTS OF A REPRESENTATIVE  OFFICE AND BUSINESS CONCERNED

Article 11 :

A Rep Office has the following obligations and rights:

1. It represents the business' interests and serves as a link in economic and commercial relations with the foreign trading partners concerned within the purview of the laws of Vietnam and the host country.

2. It conducts marketing work, initiates and carries out measures to promote and broaden the economic and commercial relations  between the business and its foreign trading partners.

3. It negotiates and signs commercial and service contracts with its foreign trading partners, if it is so empowered by the director of the business concerned and if such undertaking conforms to the laws of the host country.

4. It monitors and helps promote the implementation of commercial and service contracts already signed.

5. It performs other work related to the production and trading obligations of the business assigned by the director of the business.

6. It makes periodical reports (monthly, quarterly and yearly) or specific reports (upon request) on the activities of a Rep Office, and suggests measures to solve outstanding or newly arising problems to the director of the business and the Representation of the Socialist Republic of Vietnam in the host country.

Article 12 :

The chief and personnel of the Rep Office must abide by Vietnam's laws, and respect the laws and customs of the host country and international laws and customs.

Article 13 :

The chief and personnel of the Rep Office are placed under the administrative State management and the guidance of the Representation of the Socialist Republic of Vietnam in the host country in political and external relations. At the same time,  they are placed under the personnel management and professional guidance of the director of the business at home.

Article 14 :

The director of the business which has a Rep Office has the following obligations and rights:

1. Managing, guiding and talking responsibility for all activities of the Rep Office.

2. Appointing, dismissing and recalling the chief and personnel of the Rep Office.

3. Providing direct professional guidance to the Rep Office.

4. Making regular contacts with the chief of the Representation of the socialist Republic of Vietnam in the host country in managing, guiding and supervising the activities of the Rep Office, its chief and personnel in accordance with the stipulations at Article 13 of these Regulations.

Article 15 :

The business concerned must prepare the office space, working equipment and funding of the Rep Office on the principle of utmost thrift and effectiveness.

With regard to State-owned businesses, the provision on funding and the management of spending of the Rep Office must conform to the current norms and regimes set out by the Ministry of Finance.

Article 16 :

At specified times of the year and upon request, the directors of the businesses concerned must make reports to the Ministry of Trade on the activities and questions relating to the activities of their Rep Office in foreign countries.

Chapter IV

CLOSING OF REP OFFICES AND HANDLING OF VIOLATIONS

Article 17 :

A Rep Office shall be closed down in the following cases:

1. At the request of the director of the business concerned and with the approval of the Ministry of Trade.

2. The business concerned is insolvent and dissolved.

3. It is banned from operation by an authorized office for violating the laws of Vietnam or the host country.

In such cases, the Ministry of Trade must issue a decision notifying the business concerned of the matter 15 days before the Rep Office is closed down.

Article 18 :

In case the chief and personnel of the Rep Office infringe on the laws and the stipulations of these Regulations, they shall be recalled, disciplined, made to pay compensations for the material losses, or investigated for criminal responsibility depending on the extent of their violations.

The director of the business concerned shall decide how the chief and personnel of its Rep Office are to be disciplined. The Minister of Trade shall decide how the Rep Office which violates the Statute is to be disciplined, and at the same time, petition the authorized State office concerned to discipline the business whose Rep Office and personnel break the laws.

Chapter V

PROVISIONS FOR IMPLEMENTATION

Article 19 :

Those businesses which set up their Rep Offices before the issuance of these Regulations must prepare a new dossier according to the guidance of the Ministry of Trade to apply for a new permit. The time set for the application of a new permit is 60 days from the day these Regulations take effect.

Past this time limit, if those businesses which have Rep Offices in foreign countries do not apply for a new permit, the operation of their Rep Offices shall be considered illegal and they will be dealt with in accordance with the stipulations at Chapter VI of these Regulations.

Article 20 :

The Regulations take effect from the day they are issued.

All the provisions made earlier which are contrary to these Regulations are annulled. The Ministry of Trade is responsible for explaining, guiding and supervising the implementation of these Regulations.

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