The representative office of BIOPHARM CHEMICALS CO., LTD in Ho Chi Minh City is not allowed to conduct business activities in Vietnam, so there are no legal sources of income from business activities in Vietnam to transfer to Representative Office's payment account. BIOPHARM CHEMICALS Co., LTD is expected in the future to generate contracts with Vietnamese enterprises, which have a representative office in Ho Chi Minh City. Through the receiving and responding system to businesses’ recommendation, the company would like to ask, in a foreign trade contract with Vietnam, the Company can use the account of the representative office of BIOPHARM CHEMICALS CO., LTD in Ho Chi Minh City opened in Bangkok Bank in Ho Chi Minh City to receive the payment, then can Representative Office transfer the internal payment to BIOPHARM Company account in Thailand? If so, the Company requests the competent authority to guide the procedures for the internal remittance as mentioned above.
Regarding this issue, the State Bank of Vietnam has the following opinions:
According to Article 30 of the Government's Decree No. 07/2016 / ND-CP dated January 25, 2016, detailing the Commercial Law regarding representative offices and branches of foreign traders in Vietnam, regulating the content operation of representative offices of foreign traders in Vietnam.
Accordingly, representative offices of foreign traders perform the functions of liaison office, market inquiry, trade promotion and not conduct business activities.
In Clause 1, Article 5 of Circular No. 16/2014 / TT-NHNN dated August 1, 2014 guiding the use of foreign currency accounts, Vietnamese dong accounts of residents, The non-residents as organizations are entitled to use foreign currency accounts at the authorized banks to transact receipts and expenditures as follows:: “Receipts of wired foreign currency or remittance of foreign currency cash to the account for cases entitled to earn foreign currency regulated by the State Bank of Vietnam on the use of foreign exchange in the territory of Vietnam.”.
Clause 1, Article 7 of Circular No. 16/2014 / TT-NHNN stipulates the non-residents as organizations, individuals and residents as foreign individuals are entitled to use their Vietnam dong accounts at the authorized banks to perform the transactions of receipts and expenditures as follows:: “Wired receipts earned from goods and services provision, Receipts earned from salary, bonus, allowance and fees as well as receipts earned from other legal sources in Vietnam dong”.
Based on the above provisions of the law, the representative office of BIOPHARM Company is not allowed to conduct business activities in Vietnam, so there is no legal income arising from business activities in Vietnamto transfer to the payment account of the Representative Office of BIOPHARM Company.
In addition, for the use of foreign currency accounts, according to regulations on restrictions on the use of foreign currencies in the territory of Vietnam, payment transactions between residents and non-residents in the territory of Vietnam are not allowed to perform in foreign exchange, except in some cases permitted under the State Bank's regulations.
As such, the Representative Office of BIOPHARM Company is not allowed to use the Office's payment account to receive money from Vietnamese companies making payments as designated by BIOPHARM Company in Thailand.