THE ENTERPRISE’S HEADQUARTERS IN VIETNAM: THE LATEST LEGAL REGULATIONS

One of the prerequisites for setting up a company is that the investor chooses the enterprise’s headquarters. So where should enterprises locate their headquarters to be both convenient for business activities and to comply with the law? The following article of OTIS LAWYERS will help clients find out the latest legal regulations about the location of the enterprise’s headquarters in Vietnam.

The enterprise’s headquarters in Vietnam

Article 42, Law on Enterprises 2020 provides for the enterprise’s headquarters as follows: “The enterprise’s head office shall be located within Vietnam’s territory, is the enterprise’s mailing address, has the phone number, fax number, and email address (if any)".  

Thus, under the above regulations, the enterprise's head office address is determined according to the geographical boundaries of the administrative unit, including the following 4 levels:

Level 1: Number of houses, alleys, lanes, streets, civil groups, hamlets;

Level 2: Commune/Ward/Town;

Level 3: District/ Town/ Provincial City;

Level 4: Province/City.

Locations shall not be allowed to set up head offices 

One of the difficulties when establishing a company is choosing a suitable location to set up a head office. In fact, in many cases, investors have already rented a place, only to find out later that this place mustn't register for company establishment. Therefore, to avoid such troubles, investors should note the cases in which the address listed below is not allowed to have a corporate headquarters.

Unknown location 

As analyzed above, the head office's address must be determined with four levels. However, due to the change of administrative units or other reasons, some locations are not clearly defined at level 1. With these addresses, competent authorities are difficult to identify and manage, so they will refuse to allow a company to locate addresses. 

Therefore, investors need to choose an address full of 4-level. At the same time, enterprises should have all documents to prove the legal use or ownership rights to the headquarters when the tax authorities come down for inspection. 

The enterprise’s headquarters in Vietnam is a residential apartment building 

Clause 11 Article 6 of the Law on Housing 2014 stipulate prohibited acts as follows: "Using the apartments for non-residential purposes". Thus, the law of Vietnam prohibits using the residential to live as an office, do business, or set up the address of the enterprise's headquarters. In case the enterprise locates its head office in an apartment building, it must be a mixed-use building for both business and residential purposes. At the same time, enterprises need to provide documents to prove this.

The Head office address does not meet other conditions

For some specific business lines, if an enterprise chooses its head office address which is also the address to conduct business, the head office address must meet specific requirements to conduct operations. For example: For the hotel business, Article 22 of Decree 168/2017/ND-CP stipulates mandatory requirements for infrastructure and services to be satisfied by a hotel as follows:

• There must be an electricity system, a clean water supply system, and a water drainage system.
• There must be at least ten bedrooms, reception, and shared toilets.
• Hotel resorts and motels must have parking lots.
• Hotel resorts, floating hotels, and motels must have kitchens, and dining rooms and provide food services.
• There must be beds, mattresses, duvets, pillows, face towels, and towels.

Therefore, depending on each business line, it may or may not require specific conditions for the head office of the enterprises, investors should consider other specialized legal regulations to choose a location for the suitable headquarters.

Choosing a suitable head office plays an important role in the long-term and sustainable development of the company. To be sure that the location is allowed to be the enterprise's headquarters in Vietnam, please contact OTIS LAWYERS immediately for advice and support.

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