How To Establish A Company Branch In 2023

In the contemporary era of economic advancement, expanding business operations and establishing company branches in different provinces emerge as effective strategies to bolster the company’s resilience and bring the company’s brand closer to its customer base. The process of establishing company branches in other provinces presents numerous opportunities and challenges, but when executed correctly, it can yield substantial benefits for the business. In this article, NT INTERNATIONAL LAW FIRM aims to elucidate the intricacies of this process, highlight key considerations, and outline the advantages that businesses can accrue through such expansion.

How To Establish A Company Branch In 2023

Definition of a Company Branch

As per Clause 1, Article 44 of the Enterprise Law 2020, a “Company branch” is defined as a dependent unit of an enterprise tasked with performing all or part of the enterprise’s functions, including authorized representation. The branch’s line of business must align with that of the enterprise. Several characteristics can be deduced from this definition:

1. Branch without Legal Status: A branch, lacking legal autonomy, functions as a dependent unit of the parent company, conducting activities solely entrusted by the parent company, and is legally accountable through the parent company.

2. Operation under Parent Company’s License: The branch’s activities must conform to the regulations of the parent company and are restricted to the scope outlined in the license.

3. Non-Independence in Business Operations: Devoid of legal autonomy, branches cannot operate independently but function through delegation from the parent company.

4. Use of Parent Company’s Assets: The parent company is obligated to provide assets and resources for the branch’s business activities, with the branch having the right to utilize these assets within the entrusted scope.

5. Adherence to Tax Regulations: Branch activities must comply with tax regulations established by both tax authorities and the parent company, necessitating fulfillment of tax obligations.

Procedures for Establishing a Company Branch in Another Province

NT INTERNATIONAL LAW FIRM offers general guidance on the necessary documents and procedures in accordance with Clause 1, Article 31 of Decree 01/2021/ND-CP on business registration:

1. Document Preparation:

   • Notice of Branch establishment signed by the legal representative of the Enterprise.
   • Copies of Resolutions, Decisions, and meeting minutes of the Board of Members or Directors.
   • Copies of legal documents of the branch head.
   • Other relevant documents (power of attorney for the executor, etc.).

2. Application Submission:

   • Two methods available: direct submission to the Business Registration Office at the branch location or online application through the authorities’ online portal.

3. Approval Process:

   • Within three days of receiving complete and valid documents, the business registration agency will issue a branch operation registration certificate. Refusals must be accompanied by a clear written notice stating the reasons.

Considerations When Establishing a Company in Another Province

1. Naming the Company:

   • Branch names must adhere to the regulations outlined in Article 40 of the Enterprise Law 2020.

2. Company Headquarters Location:

   • Clear registration of address information for the branch, avoiding registration in apartment complexes or group houses.

3. Seal Considerations:

   • After obtaining the Operation Registration Certificate, engraving the branch’s seal with only the province’s address information (excluding district details) facilitates future changes in the branch’s headquarters without necessitating a new seal.

In conclusion, the establishment of company branches in other provinces involves a meticulous process guided by legal provisions, and adherence to these guidelines ensures a smoother and legally compliant expansion strategy.

NT International Law Firm has addressed the question of how to establish a company branch. If you have any further questions or concerns regarding corporate law, please contact our law firm immediately for expert legal advice.

If you require any legal assistance, please feel free to reach out to us via phone at 090 252 4567 or through email: info@ntpartnerlawfirm.com. At NT INTERNATIONAL LAW FIRM, our team is committed to offering you prompt and personalized advice.

You also might be interested in:

• The 2020 Law on Enterprises in English
• The 2005 Law on Commercial in English
• Decree 145/2020/ND-CP: Provides detailed regulations and instructions for implementing the 2020 Law on Enterprises, including specific provisions for LLCs.