Branch vs Representative Office in Vietnam (2026): Which to Choose?

Foreign companies testing or entering the Vietnamese market often choose between a representative office (RO) and a branch — or a full subsidiary. The right choice depends on whether you need to earn revenue in Vietnam and how much compliance you can carry. This guide compares them in 2026.

Representative office (RO)

An RO is a non-commercial presence: it can conduct market research, promote the parent's business, act as a liaison and oversee contracts — but it cannot directly generate revenue or sign commercial contracts for profit. It is the lightest, cheapest way to establish a legal footprint, popular for market entry.

Branch

A branch can carry out business activities and generate revenue in Vietnam within the parent's scope, but it is only permitted in limited sectors, requires more capital and compliance, and the parent bears liability. Branches of foreign traders are far less common than ROs or subsidiaries and are restricted by sector.

Comparison

For most foreign companies that genuinely want to trade in Vietnam, a subsidiary (foreign-invested company) is the practical choice; an RO suits a preliminary, non-revenue presence.

FAQ

Can a representative office sign sales contracts?

No — an RO cannot conduct revenue-generating activities or sign commercial contracts for profit; it is limited to liaison and promotion.

Is a branch or a subsidiary better for doing business?

For most sectors a subsidiary (foreign-invested company) is more flexible; branches are only allowed in limited fields and carry parent liability.

Which is cheapest to set up?

The representative office — but remember it cannot earn revenue.

How LTV Law helps

LTV Law advises on the right market-entry vehicle and handles licensing for ROs, branches and foreign-invested companies. See company formation and foreign investment, or contact our team.

This article is for general information only and does not constitute legal advice.