Tax Consultancy and Labor & Insurance Services for Representative Offices

MB is a US-based enterprise that specializes in multinational furniture business. In 2015, seeing the potential of the Vietnamese market, MB opened a Representative Office in Vietnam with the name of MB Representative Office in Ho Chi Minh City to exploit and seek new customers. MB Representative Office was granted a license to operate by the Ho Chi Minh City Department of Industry and Trade on August 4, 2015 and officially started operating from September 2015

At present, establishing a representative office is considered the preferred choice for foreign investors before officially registering a business in Vietnam. MB, a US-based multinational furniture business, invested in the Vietnamese market in 2015 by opening the MB Representative Office in Ho Chi Minh City. The purpose of setting up this office was to conduct market research, promote the brand, and utilize it as a stepping stone for future business endeavors. However, due to a lack of understanding of legal regulations and the absence of professional consulting during the establishment, MB Representative Office faced challenges in meeting mandatory tax obligations, including license fees, personal income tax, and labor and social insurance. Internally, issues included inadequate monitoring of cash flow, budget situations, and failure to maintain proper records of revenue and expenditures. Moreover, they did not comply with reporting requirements to the Department of Industry and Trade. Recognizing these challenges, MB Representative Office sought assistance from TPM to rectify past issues and receive ongoing professional support

TPM's solutions

In early 2016, TPM took on the case of MB Representative Office and conducted a thorough review and inspection of all records and documents. Identifying several potential risks, TPM devised specific comments and consultancy plans to mitigate these risks. The proposed actions included:

- Establishing a ladder-payroll system and registering for Social Insurance for employees subject to compulsory participation.
- Fulfilling mandatory tax obligations related to license fees and personal income tax for Mr. J, the head of the representative office, and other employees at MB Representative Office.
- Submitting periodic operation reports to the Department of Industry and Trade.
- Assisting MB Representative Office in establishing an internal monitoring process system for corporate governance, cash flow monitoring, and providing a basis for tax authority inspections.
- Advising on the mandatory renewal of the establishment license every five years as required by law.

RESULTS

TPM Tax Agency, with its team of professional, qualified, and experienced personnel in Accounting, Tax, Labor, and Salary, promptly provides advice on arising issues. TPM has consistently delivered a flawless service experience to MB Representative Office, fostering an ongoing partnership. This enduring collaboration attests to the quality and satisfaction derived from TPM Tax Agency's services.

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