The procedures for a foreign-invested company to set up a new branch in a different province are not clear at law. This is mainly due to:

• a foreign-invested company is subject to both business registration regulations under the Enterprise Law and investment regulations under the Investment Law; and
• there is no provision under the Investment Law regarding the coordination between two different investment licensing authorities in two different provinces.

Let’s take an example, Company A is a foreign-invested company with head office in Hanoi and is involved in construction business. Company A plans to set up a ready-mix plant in Vinh Phuc province to support for its construction business. Company A will finance its operation in Vinh Phuc by raising additional equity capital. In order to do so, Company A will need to set up a branch in Vinh Phuc. The following issues may arise from the licensing process:

• Company A will need to obtain a new Investment Certificate (New IC) from Vinh Phuc licensing authority for the branch and the ready-mix project;
• Company A will also need to amend the existing IC in Hanoi (Amended IC) to register (1) the increased charter capital which will be used to finance the ready-mix project in Vinh Phuc, (2) business registration details of the new branch in Vinh Phuc and (3) production of ready-mix as a new business line of Company A;
• Hanoi licensing authority will be reluctant to issue the Amended IC before Vinh Phuc licensing authority approves the ready-mix project in Vinh Phuc;
• Vinh Phuc licensing authority may also be reluctant to approve the New IC if it does not know whether Hanoi licensing authority will subsequently approve the Amended IC;
• Even if Vinh Phuc licensing authority agrees to issue the New IC before issuance of the Amended IC, technically, it is not possible. This is because under the Enterprise Law, the scope of business of a branch of a company must be within the scope of business of the head office. Therefore, Hanoi licensing authority should at least register production of ready-mix as a new business line of Company A before New IC could be issued; and
• In practice, it is usually to get two Government authorities to cooperate with each other if there is no mechanism at law for them to do so.

To deal with all of the above certainties, Company A may:

• Step 1: prepare and submit two applications for the New IC and the Amended IC to both Vinh Phuc licensing authority and Hanoi licensing authority at or near the same time;
• Step 2: work with Hanoi licensing authority to get approval on adding production of ready-mix as a new business line first;
• Step 3: work with Vinh Phuc licensing authority to obtain the New IC; and
• Step 4: after the New IC is issued, work with Hanoi licensing authority to get the Amended IC for the increased of charter capital and the new branch. 

While the above approach would be most prudent, it may take a long time as Company A will need to deal with Hanoi licensing authority twice at Step 2 and Step 4. In practice, with a minor theoretical risk, Company A may skip Step 2 and only deal with Hanoi licensing authority once at Step 4 for all three amendments.