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Legalities required by enterprises choosing a location to set-up company headquarters

Legalities required by enterprises choosing a location to set-up company headquarters
Legalities required by enterprises choosing a location to set-up company headquarters

Establishing and operating businesses in Vietnam under a variety of circumstances is difficult and embarrassing for investors. Some important issues include selection and registration of business sectors of the company, legal representative, etc. In addition, the determination of the right location for the company’s headquarters is one of the important factors for investment. The intended location is approved by the competent authority only  if it meets conditions prescribed by law and is in accordance with the plan of local authority. This article below shall provide information to investors making this decision.

According to regulations, the head office of the Vietnamese enterprise must be located in the territory of Vietnam, be the correspondence address of the enterprise, be determined by the administrative unit’s boundaries, have phone numbers, fax numbers and emails (if any) and meet the following conditions:

1. Enterprises must have the right to legally use the location of the headquarters

The ownership or legal right of the enterprise to use the head office is expressed in specific documents such as lease/office/real estate agreement or through certificates of land use rights and properties attached to land. In many cases, the competent authority may request the investor to provide the above documents along with the dossier applications for company establishment.

2. Head office must have a clear, stable and long-term address

To enable the authorities manage and for ease of business communication, the law stipulates that the head office address must be clear, stable, long-term and must specify: number of houses, niches, alley, street, or village, neighborhood, hamlet, commune, ward, town, district, city, province and centrally-affiliated cities.

3. The head office of the enterprise must not be located in a condominium/collective house:

According to the Housing Law 2014, condominiums/collective houses are only allowed for residential purposes. Therefore, the company cannot register its headquarters address at such locations.

In addition, according to the instructions of the competent authority, enterprises can register an officetel (multipurpose apartment used for living and as an office) as its headquarters but documents pertaining to use of the location certified by the building investor are required in the application for company establishment.

4. Choose an address suitable for the business sectors of the enterprise

One of the important factors for choosing the headquarters location is its suitability to the business sectors of the company which shall be registered with the local authority and compliance with specialized law.

To facilitate ease of management and economic development, some authorities divide the locality into areas where each specific activities are allowed in each area. For example, manufacturing companies in Ho Chi Minh City are often required to register their production locations in industrial parks and export processing zones for better management and environmental protection. The company can register its headquarters address at a regular location but must ensure that production operations are not conducted at the headquarters of the enterprise.

In addition, ensuring compliance with the conditions prescribed by specialized laws is also a factor that must be considered before choosing a location for the company’s headquarters. For example, sale of alcohol and beer for on-site consumption and sale of tobacco must not be located within a radius of 100 meters from medical facilities, kindergartens, preschools, and general education institutions.

Hence, companies shall consider the above issues before choosing a location for headquarters. In addition, investors should refer to specialized legal provisions and local planning rules before carrying out registration/change procedures and conducting business at the location.

The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.