We would like to share with you the article “Managing Permanent Establishment Risk in Vietnam” discussed by Ms Nghiem Xuan Hong An – Senior Manager and Mr Nguyen Hung Du – Tax Partner of Tax Services, Grant Thornton Vietnam with the focus on potential licensing and tax risk issues in the event that a representative office is treated as a permanent establishment by its activities in Vietnam.

Following the article, under commercial law, the representative office (RO) of a foreign entity in Vietnam is defined as a dependent unit of the foreign entity which is established for market research purposes and to conduct trade promotion activities permitted by Vietnamese laws. The current regulations mention that the operation of the RO is solely confined to the conduct of liaison activities, market research, preparatory or auxiliary activities, and trade and investment promotion of its parent company within the period stated in the establishment license.

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