VNEstablishing dependent units helps enterprises expand their operations, access new markets, and enhance business efficiency. However, enterprises must clearly understand legal regulations and strictly comply with procedures to ensure lawful and effective operations.
1. Establishing Branches
A branch is a dependent unit of an enterprise, tasked with performing all or a part of the enterprise’s functions, including the function of authorized representation. The business lines of a branch must be consistent with the business lines of the enterprise.
Legal personality: A branch does not possess separate legal personality and operates under the authorization of the managing enterprise.
Tax obligations: A branch may opt for either independent or dependent accounting methods. Under independent accounting, the branch declares and pays taxes on its own as a separate enterprise. Under dependent accounting, the branch fulfills its tax obligations through the enterprise. Regardless of the accounting method, the branch must still pay the business license fee at the location of its registered office.
2. Representative Offices
A representative office is a dependent unit of an enterprise, tasked with acting as an authorized representative to protect and serve the interests of the enterprise. A representative office does not perform business functions.
Legal personality: A representative office does not possess legal personality and is strictly prohibited from conducting profit-generating business activities.
Tax obligations: Since it does not conduct business operations, a representative office is not required to declare or pay Value Added Tax (VAT) or Corporate Income Tax (CIT). Furthermore, as the declaration and payment of the business license fee have been abolished since 2026, representative offices are no longer required to fulfill this obligation.
3. Establishing a Business Locations
A business location is a specific place where an enterprise conducts its business operations. An enterprise may establish a business location at an address other than its head office or branch.
Legal personality: A business location does not possess legal personality or its own seal.
Tax obligations: A business location is not required to separately declare or pay VAT or CIT. Additionally, as the declaration and payment of the business license fee have been abolished since 2026, business locations are exempt from this obligation.
4. Tax Declaration when Establishing Branches, Representative Offices, and Business Locations
For a branch, the enterprise can choose either independent accounting or dependent accounting affiliated with the Company. However, for business locations and representative offices, only the dependent accounting method is applicable.
5. Registration Costs for Establishing Branches, Representative Offices, and Business Locations
Simple Law provides consulting services for obtaining business registration certificates for branches, representative offices, and business locations at a fixed cost of 800,000 VND.
Processing time: 03 working days after the dossier is fully completed!
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