Technically, except for branches in the banking, insurance, securities and oil and gas sectors, the Investment Law 2014 will apply to the establishment of a branch in Vietnam by a foreign entity. This is because:

under the Commercial Law 2005, a foreign business entity’s branch, a part of a foreign business entity in Vietnam, is established in Vietnam and conducts commercial activities in accordance with Vietnamese laws;
a Vietnamese branch of a foreign business is a form of economic entity as defined in Investment Law 2014; and
the investment procedures under Investment Law 2014 will apply to the establishment of economic entities in all sectors, excluding securities, credit institution, insurance business, and petroleum laws.

If the Investment Law 2014 applied to the establishment of a branch of a foreign entity, then the foreign entity should apply to obtain an Investment Registration Certificate under the Investment Law 2014 before applying to establish the relevant branch under the provisions on branch establishment (e.g. the Commercial Law 2005, Decree 7/2016 and specialized laws governing foreign business entities’ branches in Vietnam).

However, the provisions on branch establishment under Decree 7/2016 do not expressly require the foreign entity who wishes to open a branch in Vietnam to include an Investment Registration Certificate in the application for establishing the branch. It is not clear whether the omission under Decree 7/2016 on branch establishment means that (1) an Investment Registration Certificate is actually not required for establishing a branch in Vietnam or (2) the draftsmen of Decree 7/2016 simply forgot to include the Investment Registration Certificate.

This post is contributed by Nguyen Hang Nga, a legal intern at Venture North Law.

Vietnam Business Law