Establishing a representative office of a foreign company in Vietnam can greatly enhance and support the parent company’s business operations and is easy to manage, save operating costs and avoid risks from local compliance procedures. In the following article, I would like to share some reference information on operating costs and annual budget of a foreign representative office in Vietnam.
Representative offices of foreign traders in Vietnam are dependent accounting units, established under the provisions of Vietnamese law to conduct market surveys and a number of trade promotion activities within the framework of Vietnamese law allows.
Foreign investors may establish a legal office in Vietnam, headed by a representative, recruit employees to manage and promote sales contracts with business partners in Vietnam, research and development. and product development, seeking opportunities to buy and sell goods and provide services … Foreign workers working for representative offices can apply for work permits and multiple-entry visas with a term of two. year (temporary residence card) for yourself and your family in Vietnam.
Here are some key operational expenses procedures so you can set an annual budget for a representative office in Vietnam:
According to the Law on Social Insurance effective from the beginning of 2018, employers and employees must pay compulsory social insurance and trade union fees as follows:
Total: 34% of salary, of which:
Employer pays 23.5%
Employee pays 10.5%
The base salary limit for social insurance contributions is VND 29,800,000. That is, in case the salary is higher than this limit, the maximum amount payable will be only: 34% x 29,800,000 VND.
Foreign workers in Vietnam who have a work permit or certificate or practice license must also pay health and social insurance. In addition to salaries, the base for social insurance payment also includes allowances and other additional payments.
In addition to compulsory insurance, the office must declare and pay personal income tax equal to 20% of the income in the host country for non-permanent foreign workers and pay progressive tax from 5% to 35% depending on According to the income level for permanent foreign workers and local workers. In addition to operating costs, the Representative Office only has to pay personal income tax.