This guide is for Spanish companies that have already decided to establish a presence in Vietnam and are weighing up a representative office, a branch or their own 100% foreign-owned company. By the end you will know what each structure allows, what it requires, how long it takes and when each one makes sense.
The three structures in a sentence
Vietnam draws a clear line between being present and operating. That distinction shapes the choice:
- Representative office (văn phòng đại diện). An extension of your Spanish company to research the market, act as a liaison and promote the parent company. It cannot generate revenue in Vietnam.
- Branch (chi nhánh). An extension of the parent company that can carry out commercial activity, but only in certain sectors and with stricter track-record requirements.
- 100% foreign-owned company. A Vietnamese company with its own legal personality, whose capital is yours. This is the structure for selling, invoicing, hiring and operating normally.
The first two are governed by the Commercial Law and its implementing regulation, Decree 07/2016/NĐ-CP. The company is governed by the Law on Investment and the Law on Enterprises; we explain the process in detail in our guide on how to set up a company in Vietnam as a foreigner.
Comparison table
| Representative office | Branch | 100% foreign-owned company | |
|---|---|---|---|
| Own legal personality | No | No | Yes |
| Can invoice and generate revenue | No | Yes, within its licence | Yes, in its registered activities |
| Liability | Borne by the parent company | Borne by the parent company | Limited to capital (in an LLC) |
| Minimum age of the parent company | 1 year | 5 years | Not required by this route |
| Main licence | Representative office licence | Branch licence | IRC and ERC |
| Issuing authority (2026) | Provincial Department of Industry and Trade or industrial park management board | Provincial People's Committee | Provincial investment and business registration authority |
| Statutory processing time | 7 working days | 7 working days | 10 working days (IRC) and 3 (ERC) |
| Licence term | 5 years, renewable | 5 years, renewable | According to the investment project |
| Annual corporate income tax return | No | Yes | Yes |
Statutory deadlines run from the moment the application is deemed complete and valid. Vietnam Briefing gives an indicative estimate of 6 to 8 weeks for a representative office, around 12 weeks for a branch and 8 to 16 weeks for a company, including preparation. Treat these as a reference only: they vary widely by province, sector and the quality of your documents.
Representative office: presence without operating
What it can and cannot do
Under Decree 07/2016, a representative office may act as a liaison, research the market and promote business opportunities for the parent company. In practice this means finding suppliers and distributors, carrying out quality control, organising visits, preparing for trade fairs and maintaining relationships with local contacts.
What it cannot do is carry out activities that directly generate profit in Vietnam. It does not sell, it does not provide services to Vietnamese customers and it does not invoice. Commercial contracts are signed by the Spanish parent company, not by the office.
This limit is the structure's weak point. If the office starts closing sales on its own account, it is acting outside its licence, with the risk of penalties and tax problems. If you expect to sell soon, this is not the structure for you.
Requirements
In summary, Article 7 of Decree 07/2016 requires:
- The parent company must be legally incorporated and registered in its home country.
- It must have been operating for at least one year since incorporation or registration.
- If its registration has an expiry date, it must have at least one year of validity remaining when the application is filed.
- The office's activities must be consistent with Vietnam's international commitments; otherwise, approval from the relevant line ministry is required.
Procedure, cost and obligations
The licence is issued by the Department of Industry and Trade (Sở Công Thương) of the province where you plan to set up or, if the office is located in an industrial park, economic zone or high-tech zone, by its management board. The authority reviews the application within 3 working days, may request corrections only once and must issue a decision within 7 working days of the application being complete. If it needs to consult the line ministry, the decree allows 3 working days to send the request, 5 for the reply and a further 5 to decide.
The fee for a new licence is VND 3,000,000 under Circular 143/2016/TT-BTC; amendments, renewals and reissues cost VND 1,500,000. These are the figures still published by provincial public service portals in 2026.
Once the office is open:
- The licence lasts 5 years, but cannot exceed the validity of the parent company's registration. Renewal must be requested at least 30 days before expiry.
- Any change (address, head of office, parent company name) must be notified to amend the licence within 60 working days.
- By 30 January each year, an activity report must be sent to the authority that issued the licence.
- The office does not file an annual corporate income tax return, but it must declare and withhold personal income tax for its employees.
- The head of the office cannot simultaneously head a branch or be the legal representative of the parent company or of a Vietnamese company.
Branch: operating without setting up a company
Why it is the least common structure
The advantage of a branch is that you do not need to incorporate a new company or contribute charter capital. But it has two major drawbacks.
The first is the track record: Article 8 of Decree 07/2016 requires the parent company to have been operating for at least five years. The second is scope: the branch's activities must comply with Vietnam's market access commitments and match what the parent company already does. In many sectors Vietnam has not committed to opening up via branches, and in others (banking or insurance, for example) branches are governed by sector-specific laws with their own requirements.
In addition, a branch has no legal personality: the Spanish parent company is liable for its debts and obligations. For tax purposes it operates as an establishment taxed in Vietnam, with its own accounts and annual return.
Who has authorised branches since 2025
Until 2025, branch licences were issued by the Ministry of Industry and Trade. Decree 146/2025/NĐ-CP, in force since 1 July 2025, transferred that power to the provincial People's Committees, and the ministry itself confirmed this in its communication of April 2026. Processing times remain the same: review within 3 working days and a decision within 7 working days of the application being complete. This transfer is framed as a pilot measure until 1 July 2027, so it is worth confirming which authority handles the application at the time you file.
100% foreign-owned company: the option for real operations
If your goal is to sell in Vietnam, provide services to Vietnamese companies, build your own team or manufacture, the usual route is to set up a company. The most common form when a single parent company invests is the single-member limited liability company (TNHH).
Its advantages over the other two structures:
- It has its own legal personality and liability is limited to the capital contributed.
- It can carry out any registered activity that is not prohibited, subject to the market access conditions applicable to each sector.
- It can invoice, sign contracts in its own name, import, hire staff and repatriate profits through the established channels.
In return, the process is longer and the compliance burden is heavier: investment registration certificate (IRC), enterprise registration certificate (ERC), direct investment capital account, capital contribution within 90 days, accounting, annual audit and tax returns. Since the 2025 Law on Investment, in force from 1 March 2026, you can incorporate the company before obtaining the IRC, which shortens the time until you have an entity that can sign contracts.
How to decide: four questions
- Will you generate revenue in Vietnam in the next 12 months? If so, rule out the representative office. Using it as a disguised company is the most expensive mistake.
- Does your parent company meet the track-record requirement? Less than one year: neither of the two commercial-presence structures is available, leaving only the company. Between one and five years: representative office or company.
- Does your sector allow branches? Check before considering one. If it is not open to branches, the real choice is between an office and a company.
- Do you want the Spanish parent company to bear the risk directly? With an office or a branch, it does. With a company, the risk in principle stays within the subsidiary.
Typical scenarios
| Situation | Structure that usually fits |
|---|---|
| A Spanish machinery SME wants to find a distributor and support its local agents | Representative office |
| A fashion company needs to control the quality of its Vietnamese suppliers | Representative office |
| A software company wants to build its own development team in Ho Chi Minh City | 100% foreign-owned company |
| An engineering firm wants to deliver projects and invoice Vietnamese customers | Company, or branch if the sector and track record allow |
| A company that sells regularly to Vietnam and wants to import and distribute itself | 100% foreign-owned company |
A common path is to start with a representative office to validate the market and, once sales become predictable, set up a company. Bear in mind that one structure is not "converted" into another: the company is incorporated separately and the office is closed or kept as needed. If your interest in Vietnam involves exporting, also review what changes under the EU-Vietnam free trade agreement. And if the reason is to build a technical team, our guide on the cost of software development in Vietnam will help you size it.
Common mistakes
- Selling through the representative office. Signing sales contracts in Vietnam or collecting payments through the office means acting outside the licence and exposes you to penalties.
- Assuming a branch is the fast track. The five-year track record and sector restrictions rule it out for many SMEs.
- Forgetting the annual report. The 30 January deadline also applies to offices with little activity.
- Choosing the wrong local head. The incompatibility rules in Decree 07/2016 prevent the same person from running the office and acting as legal representative of other entities.
- Not keeping up with regulatory changes. In 2026 a draft decree amending Decree 07/2016 is going through the approval process, and authority over branches changed in 2025. Check the regulations in force before filing.
Choosing the structure is the first decision of entering the Vietnamese market, and it shapes tax, hiring and timelines.
Frequently asked questions
Can a representative office hire employees?
Yes. The office can employ local and foreign staff for its liaison and market research functions. It must declare and withhold personal income tax for its employees and comply with Vietnamese labour and social insurance rules.
How much does it cost to open a representative office?
The official licence fee is VND 3,000,000 under Circular 143/2016/TT-BTC. On top of that come the translation and apostille of documents in Spain, office rent and, usually, a local adviser's fees. These costs vary considerably from case to case.
Do I need minimum capital for a representative office or a branch?
Neither an office nor a branch requires a charter capital contribution, because they are not independent companies. You will, however, have to fund their expenses from the parent company. For a company, the capital you declare must be consistent with the project and contributed within 90 days of the ERC.
Can I have a representative office and a company at the same time?
Yes, they are independent structures and can coexist. Bear in mind the incompatibility rules for the head of the office, and that commercial activities must be carried out by the company, not the office.
How Agilean can help
At Agilean we help Spanish and European companies choose the structure that fits their plans in Vietnam and get it up and running from Ho Chi Minh City. Our team reviews your planned activity with you, coordinates document preparation with local advisers and law firms, and follows the procedures through until the office or company is operational. You can see how we work on our Vietnam market entry page.