Representative office in Vietnam: Essential updates
14.02.2025
Foreign companies with representative offices in Vietnam must ensure that their representative office (RO) license is always up to date. Otherwise, they face high fines and business activities will be hindered. The Ecovis experts explain the updating process and which documents are required.
In which cases must changes be registered
According to Vietnam’s Law on Commerce and Decree No. 07/2016/ND-CP, foreign businesses are responsible for updating their RO license with the competent authority in the following cases:
If the parent company’s name, headquarters address, or scope of activities changes, corresponding updates must be made to the RO license in Vietnam to ensure compliance with local regulations.
If the chief representative of the RO is replaced, or if their identification documents (e.g., a new passport or updated residence address) are changed, the RO license must be revised to reflect these updates.
Any changes to the RO’s name, scope of activities, or registered address within the same province, city, or geographical area under a management authority’s jurisdiction require adjustments to the existing license.
We take care of all the necessary steps to update your RO license – from document preparation to deadline monitoring. Vu Manh Quynh, Managing Partner, ECOVIS OC Law, Ho Chi Minh City, Vietnam
How to register changes to the representative office license
Step 1: Gather the required documents: The specific documents needed depend on the type of change, but may include:
A written request for adjustment of the RO license
Updated corporate documents from the parent company (e.g., new registration certificates, lease agreements)
Proof of the new address (for both the parent company and/or RO)
Updated identification documents for the chief representative, if applicable
Translated, notarised and consular certified copies of documents issued overseas
Step 2: Submit the application: Submit the application to the licensing authority (Department of Industry and Trade)
Step 3: Receive the updated RO license: The licensing authority should proceed with the adjustment of the RO license and issue the results within 5 to 15 working days from the date of receipt of a complete and valid application.
Businesses should be aware that the deadline for registering any changes that require an update to the RO license is 60 days from the date of the change.
Consequences of non-compliance
Failure to update the RO license could harm the business’s reputation with regulatory authorities, partners and clients in Vietnam. More importantly, failing to update the RO license constitutes a legal violation subject to administrative fines ranging from VND 20,000,000 to VND 40,000,000 (VND 20,000,000 is the equivalent of around EUR 764 or USD 795).
For further information please contact:
Vu Manh Quynh, Managing Partner, ECOVIS OC Law, Ho Chi Minh City, Vietnam
Email: quynh.vu@ecovislaw.vn
Global minimum tax Turkey (Türkiye): Developments in taxation
12.02.2025
With the introduction of Law No. 7524, Türkiye has added the section “Local and Global Minimum Supplementary Corporate Tax” to the Corporate Data Law No. 5520. This regulates tax liability, tax base and tax rate, as well as exceptions and exemptions for multinational companies covered by the law. The Ecovis experts explain these and other details on the implementation of the tax.
The OECD wants multinational companies above a certain size to pay a minimum rate of 15% tax on their profits in each country in which they operate, to prevent tax avoidance. If companies pay less than 15% tax in one country, the home country of the group of companies or another country in which the group operates can levy this tax.
The subject of local and global minimum supplementary corporate tax
The profits of the affiliated enterprises of multinational business groups whose annual consolidated revenue in the consolidated financial statements of their ultimate parent enterprise exceeds the Turkish lira equivalent limit of EUR 750 million in at least two of the four accounting periods preceding the accounting period in which the income is reported are subject to local and global minimum supplementary corporate tax. Exemptions and exceptions apply, among others, to:
Real estate investment vehicles: Businesses that are the ultimate main business and are primarily real estate investment funds aiming to provide income to their beneficiaries by investing in real estate and where single-stage taxation is applied on a business or beneficiary basis.
The earnings of multinational business groups’ affiliated businesses from international maritime transportation activities and, under certain conditions, some other sales and rental income within the scope of this activity are exempt from the local and global minimum supplementary corporate tax.
Who must pay the global minimum supplementary corporate tax
The taxpayer of the institutions generating income at the global level is the ultimate main enterprise, intermediate main enterprise, or partially owned main enterprise in Türkiye which is affiliated with the multinational business unit and other variables.
We support you in calculating the local and global minimum supplementary tax. Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Tax rate and base
The global minimum supplementary corporate tax rate is the difference between the country-based tax burden and the minimum corporate tax rate (15%). If the country-based tax burden exceeds the minimum corporate tax rate, no global minimum supplementary corporate tax is calculated.
The country-specific tax burden of a multinational group is calculated by dividing the taxes of its companies in a country by their profits. The global minimum tax base is reduced by 5% of gross wages and 5% of the net book value of fixed assets. The tax is determined by applying the tax rate to this base. For a subsidiary, the tax is calculated by applying the ratio of company to country profits to the determined minimum tax.
Tax period, declaration, date and payment
The tax period for the global minimum supplementary corporate tax is the accounting period, which is the calendar year in Türkiye. The tax period of businesses to which a special accounting period applies is the special accounting period. The calculated tax must be declared and paid by the last day of the fifteenth month following the month in which the accounting period is closed.
Who must pay the local minimum supplementary corporate tax
The taxpayer of the local minimum supplementary corporate tax is the affiliated enterprises and business partnerships that are affiliated with multinational business groups within the scope of Additional Article 1 and are resident in Türkiye.
Tax period, declaration, assessment and payment
The tax period of local minimum supplementary corporate tax is the accounting period. Local minimum supplementary corporate tax is determined by applying the minimum supplementary corporate tax rate to the global minimum supplementary corporate tax base. The calculated tax is declared and paid from the first day to the last day of the twelfth month following the month in which the accounting period closes.
For further information please contact:
Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: mbulut@diplomatymm.com.tr
Efil Çetin, CPA, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: ecetin@diplomatymm.com.tr
Unlock EU market access with MiCA licensing: The time to act is now
07.02.2025
The implementation of the Markets in Crypto-Assets (MiCA) Regulation marks a transformative milestone for the crypto industry across the European Union. As of December 30, 2024, MiCA establishes a single regulatory framework and creates a level playing field for crypto-asset service providers (CASPs). Whether your company is already operating in the EU or planning to expand into this dynamic market, obtaining a MiCA license is essential to thriving in the new regulatory environment. What does it mean to be governed by MiCA?
Why MiCA is important for your business
MiCA introduces consistent regulatory requirements across all EU member states, replacing fragmented national frameworks. This EU-wide approach simplifies compliance and eliminates legal uncertainty, allowing CASPs to seamlessly scale their operations across borders. By establishing clear guidelines, MiCA enhances market integrity, protects investors, and promotes innovation. For businesses, compliance with MiCA is essential to avoid legal repercussions, maintain market credibility, and operate efficiently.
With a MiCA license, your company gains the ability to passport services throughout the EU, accessing a market of over 450 million potential users under one regulatory umbrella.
Licensing Opportunities in the EU
Several EU nations have become prominent destinations for obtaining MiCA licenses, characterized by supportive regulatory frameworks.
Lietuvos Bankas: A Proven Licensing Leader in the EU
In Lithuania, Lietuvos Bankas emphasizes early and well-prepared applications, with a focus on maintaining high compliance standards. They urge CASPs to:
Act quickly: Early applications ensure business continuity during the transition period.
Prepare thoroughly: Only high-quality applications will be considered, making readiness a key factor in the process.
Remain compliant after approval: Compliance with ongoing MiCA requirements ensures long-term operational success.
Latvijas Banka: A fintech-friendly approach
As of January 2, 2025, Latvijas Banka, the central bank of Latvia, is accepting applications for MiCA licenses. They offer:
Free pre-licensing consultations: Tailored expert guidance to assess application feasibility, ensure document readiness, and navigate compliance requirements.
Fast response times: Consultations are typically answered within 48 hours, streamlining the pre-licensing process and reducing time to market.
Competitive fees: A monitoring fee of just 0.6%, with a minimum of $3,000 per year.
Additional Support: Access to the Innovation Hub, Regulatory Sandbox, and startup-friendly incentives such as co-funding for qualified employees and tax breaks.
Each jurisdiction presents distinct benefits that should be carefully assessed against the operational requirements and compliance needs of the business. Lithuania’s and Latvia‘s flexible yet robust regulatory framework, combined with theit digital infrastructure, makes meeting these requirements more streamlined than in many other jurisdictions.
Grandfathering periods for existing CASPs
Transitional arrangements under MiCA provide for a grandfathering period for CASPs operating before December 30, 2024. These periods vary by country, with some member states offering up to 18 months for license applications. For example:
Ireland, Estonia and the Czech Republic: up to 18 months.
Latvia and Lithuania: 5-6 months, with immediate action required to meet shorter deadlines.
How MiCA raises regulatory standards
MiCA’s comprehensive framework goes beyond licensing to address:
Crypto asset classification: Proper classification is critical to determining regulatory obligations. Misclassification risks compliance issues and operational disruptions.
Operational Resilience: Strengthened IT systems and robust governance under the Digital Operational Resilience Act (DORA).
Sustainability Goals: Integration of environmental, social and governance (ESG) practices to ensure alignment with broader EU goals.
Your Next Steps
Securing a MiCA license isn’t just a regulatory requirement; it’s an opportunity to build credibility and access Europe’s integrated market. At ECOVIS ProventusLaw, we specialize in navigating the complexities of MiCA in the EU. ECOVIS ProventusLaw offers:
Pre-licensing support: Comprehensive readiness assessments and document preparation.
Application Guidance: End-to-end support to ensure a smooth licensing process.
Post-licensing compliance and internal audit: Ongoing support to maintain alignment with MiCA, DORA, and ESG requirements.
With MiCA now in effect, now is the time to act. Contact us today to discuss how we can help you unlock the potential of the EU crypto market and ensure your compliance journey is seamless and successful.