[Part 2] What Are the Pitfalls in Establishing a Representative Office in Vietnam?

3. Key Points to Note in Lease Agreements for Representative Offices in Vietnam

When establishing a representative office in Vietnam, the office lease agreement is one of the most critical steps forming the foundation of business operations. Poor office selection can disrupt office operations and cause delays or issues in licensing procedures, making careful judgment essential. Below, we explain the key points to keep in mind when entering into a local lease agreement, which are indispensable for “Vietnam representative office setup and office selection.”

• ・Office lease agreements are directly linked to licensing and business operations
• ・Mistakes in property selection affect the entire establishment process
• ・Understanding and addressing Vietnam-specific regulations and practices is essential

3.1. Need for a Long-Term Lease

When leasing an office for a representative office in Vietnam, a long-term lease is often required as a licensing condition. In most cases, short-term leases are not accepted during licensing or establishment procedures. Therefore, the lease term must be set carefully. As a safe measure, it is advisable to sign a lease of at least one year. It is also reassuring to confirm renewal terms, penalties for early termination, and cancellation procedures in advance to avoid disputes.

• ・Long-term lease (one year or more) is recommended
  Short-term leases make license approval difficult
• ・Always confirm renewal and termination terms in advance

3.2. Virtual Offices Are Not Permitted

In principle, virtual offices are not permitted when establishing a representative office in Vietnam. The law requires a verifiable physical office with exclusive space, so arrangements that only provide a registered address are not approved. Submission of lease documents proving a physical office is mandatory. If the contract is merely formal or the address is misrepresented, there is a risk that approval may later be revoked, so property selection must be handled with care.

• ・Virtual offices are not allowed
• ・A lease agreement for a physical, dedicated office is required
• ・Providing false address information carries significant risk
  

3.3. Alignment of Lease Term and License Period

It is important that the representative office license period matches the office lease term. Many applications are rejected because the remaining lease period is insufficient at the time of application or renewal. Therefore, the lease term must adequately cover the intended license period. Before signing, always align the lease duration with the licensing schedule to prevent reapplications and additional costs.

3.4. Procedures When Changing Office Location

If the office location changes, prompt notification to the competent authorities and submission of required documents are mandatory. This includes preparing the new lease agreement and updated address information and proceeding without delay. When planning a relocation, sufficient time for scheduling and preparation is essential. Failure to complete procedures can increase the risk of license suspension or administrative penalties, so advance preparation and consultation with specialists are recommended.

• ・Report location changes prompt
• ・Submission of the new office lease agreement is required
• ・Delays may lead to administrative risks or business suspension

3.5. Restrictions on Office Use

In Vietnam, office properties may have clearly defined usage restrictions. It is essential to confirm in advance that the property can be used as a representative office. Licenses are often denied for residential or other non-eligible properties, so be sure to thoroughly check the property’s registration details, usage classification, and building management rules. Doing so ensures smooth establishment and stable operations.

• ・Do not overlook usage restrictions
• ・Check registration details, classifications, and management rules
• ・Incorrect usage may result in license denial

4. Summary

When establishing a representative office in Vietnam, there are many easily overlooked points at each stage, including legal procedures, office selection, lease agreements, and local office infrastructure. In particular, delays in license applications, incomplete documentation, parent company track record requirements, and insufficient review of lease terms can become major obstacles. Office location, infrastructure, feasibility of long-term leases, and legal compliance also greatly affect operational stability. By keeping the points outlined in this article in mind and working with reliable local partners and professionals, you can achieve a smooth office setup. If you would like to learn more about property selection or representative office establishment support in Vietnam, please visit our service details page.