The client
A Singapore-based footwear manufacturer, established in 2003, with a global workforce of approximately 800–1,000 employees, sought to establish a presence in Vietnam to support its international sourcing and supply-chain activities.
The company manufactures trekking footwear and operates offices and manufacturing facilities across multiple international markets.
For its Vietnam market entry, the client intended to establish a local presence focused on commercial promotion, supplier sourcing and quality management, particularly in connection with Vietnamese factories capable of manufacturing footwear for export to the United States.
The client did not intend to sell products, generate revenue or conduct direct commercial trading activities through its Vietnam presence.
Sourcing, not selling?
A representative office can be the right fit — if its activities stay within the permitted scope.
Talk to us →Where does a representative office end?
01 — Determining the right market-entry structure
The client initially considered establishing a Representative Office (RO) in Vietnam. However, the key question was not simply whether an RO could be established — it was whether the client's intended sourcing, supplier-management and quality-control activities could be conducted through an RO without exceeding its legal scope. The client needed a structure that would allow it to develop its Vietnam supply chain while remaining within the permitted scope of activities for a foreign trader's representative office.
02 — Defining the boundaries of the Representative Office
The client's intended activities involved working closely with Vietnamese manufacturing partners — identifying potential manufacturing partners, communicating with and evaluating suppliers, monitoring production, managing product quality, coordinating sourcing activities, and supporting the client's international supply chain. However, an RO could not be used as a substitute for an operating company conducting commercial trading activities. In particular, the RO could not directly conduct sales of goods or enter into commercial contracts concerning the purchase, sale or manufacturing of goods with Vietnamese factories on behalf of the business.
Permitted — representative and market-development activities
Not permitted — commercial activities requiring a different legal structure
03 — Preserving the client's commercial objective
The client did not intend to generate revenue or conduct direct sales in Vietnam. Its objective was to establish a local sourcing and supplier-management presence that could identify suitable Vietnamese factories, develop supplier relationships and monitor production quality for products ultimately destined for the US market. This meant that establishing a Vietnamese subsidiary could potentially create a more extensive structure than the client's immediate business requirements called for — the legal assessment therefore needed to balance regulatory limitations with commercial practicality.
A structuring exercise, not just an RO application
Inventive Legal approached the matter as a market-entry structuring exercise, rather than simply preparing an application for a Representative Office licence.
Understanding the client's actual operating model
We first assessed how the client intended to use its Vietnam presence. Rather than treating "sourcing" and "quality management" as generic business activities, we examined how the client intended to interact with Vietnamese factories and how those activities would fit into its global supply chain — enabling us to distinguish between activities that could appropriately be undertaken by the RO and activities that would constitute direct commercial operations.
RO scope and regulatory boundary assessment
We assessed the permissible scope of a Representative Office and identified activities that should not be conducted through it — selling goods, directly entering into commercial contracts for the purchase or sale of goods, or entering manufacturing arrangements with Vietnamese factories in its own capacity. Instead, the RO could focus on market development, supplier identification, commercial liaison, information gathering, supplier relationship management, and quality monitoring and coordination.
Selecting the appropriate market-entry vehicle
Following the assessment, we concluded that a Representative Office was the appropriate structure for the client's immediate objectives. The client was not seeking to conduct revenue-generating activities in Vietnam — its primary objectives were to develop its sourcing network, identify manufacturing partners and oversee supplier and quality-management activities. An RO therefore provided a more proportionate market-entry structure than establishing a full operating company at that stage.
Designing the RO around the client's business objectives
We advised on the appropriate scope and purpose of the RO so that its activities were aligned with both the client's global supply-chain requirements and the regulatory limitations applicable to a foreign trader's Representative Office in Vietnam. The result was a structure that allowed the client to establish a meaningful local presence without treating the RO as an operating or trading entity.
End-to-end support
- ✓Market-entry structure assessment
- ✓Representative Office eligibility assessment
- ✓RO scope and activity analysis
- ✓Review of the client's intended sourcing model
- ✓Corporate document review
- ✓Preparation of the Representative Office application
- ✓Application and supporting documentation
- ✓Coordination with the HCMC Department of Industry and Trade
- ✓Licensing procedures
- ✓Post-licensing compliance guidance
Key legal issue
The central legal question was not simply "Can the client establish a Representative Office?"
It was "Can the client achieve its commercial objectives through a Representative Office without crossing the line into direct commercial operations?"
Representative Office, or operating company?
Our assessment showed that the client's objectives could be achieved through an RO, provided its Vietnam activities remained within the appropriate representative and market-development scope — avoiding the unnecessary establishment of a revenue-generating operating entity.
Representative Office established within 8 weeks
Representative Office successfully established
The client successfully obtained its Representative Office Establishment Licence in Vietnam from the competent authority.
Appropriate market-entry structure selected
The client was able to establish a local presence without immediately establishing a full operating subsidiary.
Operational boundaries clearly defined
The client received clear guidance on the distinction between permitted RO activities and commercial activities that would require a different legal structure.
Supply-chain development enabled
The RO provides a local platform for the client to identify Vietnamese manufacturing partners, develop supplier relationships, conduct market and supplier research, coordinate sourcing activities, and monitor supplier and product quality.
Completed within 8 weeks
The Representative Office establishment process was completed within approximately 8 weeks.
Key takeaway
The right market-entry structure is determined not only by what a foreign company wants to establish in Vietnam, but by what it actually intends to do once it is there.
For foreign manufacturers and international sourcing companies, a Representative Office can provide a practical first step into the Vietnamese market where the objective is to develop supplier relationships, conduct market research and support supply-chain activities — provided that the RO's activities remain within its legally permitted scope.
By assessing the client's commercial objectives, sourcing model and intended interactions with Vietnamese manufacturers before proceeding with the licensing process, Inventive Legal helped the client establish a Representative Office that was both commercially useful and appropriately structured from a regulatory perspective.
At a glance
| Client | Singapore-based footwear manufacturer |
|---|---|
| Industry | Trekking footwear manufacturing |
| Established | 2003 |
| Global workforce | Approximately 800–1,000 employees |
| Market entry | First Vietnam presence |
| Structure | Representative Office |
| Location | Ho Chi Minh City |
| Purpose | Commercial promotion · Supplier sourcing · Quality management |
| Target supply chain | Vietnamese manufacturers → Export to US |
| Key issue | Defining RO activities vs. commercial operations |
| Authority | Ho Chi Minh City Department of Industry and Trade |
| Licence | Representative Office Establishment Licence |
| Outcome | Successfully established |
| Timeline | 8 weeks |