Quick Tips for Foreigners to Set up Company in Vietnam and Comply?

 

Feel challenging to set up company in Vietnam?

For a foreigner to a country like Vietnam which opportunities avail for business, it is attempting to create a business to operate and snatch the chance. But after the first eagerness feeling of potential business to generate, after settling in, the entrepreneur might wonder, how difficult it is to set up company in Vietnam or how challenging the business environment in Vietnam for operating and doing business when dealing with administrative procedures from registering investment, setting up the company, complying with periodical reporting and tax declarations… If you are reading this and feeling so, you are not alone. 

As a place with a favorable geographical position and plentiful labor resources, and growing consumer market, Vietnam is increasingly developing strongly, becoming a country attracting global investment among Southeast Asia countries. In order to carry out effective investment activities, foreign investors need to undertake research about the policies, investment incentives, legal requirements as well as the process and procedures for establishing a business in Vietnam. This will provide some quick tips for the fundamental considerations that international investors should consider if they have any ideas to chose Vietnam to make investment.

Investment to set up company in Vietnam is encouraged

An individual with foreign nationality or an organization established under foreign law could register investment and conduct business activities in Vietnam. Foreign investors are permitted to engage in any legal business, however, there are some specific industries that investors must meet the required conditions to be able to register investment. Some few areas that foreign investors are not permitted to conduct business in Vietnam for the reason for national security or state monopoly.

What license is required to set up company in Vietnam?

According to Vietnam law, an investor whom wishes to establish a company in Vietnam must obtain an investment registration certificate from an authorization agency.

The normal time limit for issuance of the Investment Registration Certificate (IRC) will be 15 days from the date of submission of valid dossier for an investment project. But it is important to build in the time for preparing the proper documents i.e. application, financial report, bank balance, personal documents and many of such documents require apostille, or notarization and legalization and translation into Vietnamese before being submitted.

Vietnam law does not require a minimum capital to set up a business, except for conditional investment or business lines. But investors are obliged to contribute capital according to the schedule stated in the IRC and that the government authority has the right to request the investor to explain the business plan to their satisfaction based on the proposed investment capital.

In case the investor cannot contribute enough capital according to the committed time limit, the competent authority may apply sanctions, including revocation of the IRC or the investor has to adjust the IRC to reflect the actual contribution of investment. Once having the IRC, the investor then request to obtain Enterprise Registration Certificate (IRC) which takes 5 days from the date of submission of valid dossier for business establishment to complete the business setting up process.

After licensing, what to do to comply?

Now, after have a business set up in Vietnam, the enterprise starts to conduct business i.e. sign contract to lease space officially, hire people, enter into business transactions to buy and sell services or products. 

To make it legally bound, the documents needs to be signed and sealed.  Then the question is how to have a seal?  Back in the past, it was more challenging to have the seal made for an enterprise after being established because it was managed by the Public Security authority.

There has been a discussion between legislators and business experts about totally removing the seal being stamped on the legal documents in Vietnam because the signature of the legal representative is most important. Over the time, the once strict law governing the seal issuance has been loosen up. But in Vietnam the seal is still very important that together with the legal representative signature it show the official notice i.e. a decision by the legal representative of the business to terminate a labour contract; or an obvious approval of an entity to a transaction it enters to hire a construction company for building a factory. 

Depending on the terms in the company’s charter, the investor has the right to make more than one seal to use. The enterprise must send a notice to the business registration office where its head office is located for publication on the National Business Registration Portal before using, altering, destroying, or changing the number of seals. The seal can be used starting on the day the notification process has been finished and the seal sample has been uploaded on the National Business Registration Portal for verification purpose.

Remember to declare and pay taxes in Vietnam

During the operation of the business after being started, the investor needs to pay attention to tax obligations, which is very important in most jurisdictions except in tax heaven countries.  But Vietnam is not on the exemption list. Every company needs to submit tax declaration. Every year, the business will need to pay a number of different taxes and fees such as license fees (based on registered charter capital); Corporate Income Tax (CIT) when the company makes profit; declare and pay Value Added Tax (VAT) for sold goods or services, on behalf of individual declare and pay Personal Income Tax (PIT), or in some cases export tax and import tax, tax on lands.

Remember to submit mandatory reports in Vietnam

In addition, foreign investor also needs to fully comply with the investment project reporting regime in accordance with the law. These reports will be made periodically (monthly, quarterly or annually) on such contents as: implemented investment capital, business investment results, information on labor, employed foreign workers, reports on environmental protection… Complying with the implementation of tax payment obligations and periodically reporting to ensure timely implementation as prescribed will help the company avoid unnecessary risks such as administrative sanctions, business suspension, penalties that could impact the business.

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3 Essential Insights: How Long It Takes to Set Up a Company in Vietnam

 In today’s global economy, Vietnam emerges as a place of opportunity, attracting foreign investors with its impressive growth rates, strategic location in Asia, and a thriving digital ecosystem. For those looking to set up a company in Vietnam, understanding the timeframe is crucial. This article explores the steps involved in this process and why Vietnam is an attractive destination for business expansion.

Initial Considerations

Before diving into the procedural timelines, it’s important for potential investors to grasp why Vietnam is becoming a hotspot for international business. Amidst global economic uncertainties, Vietnam boasts a stable economic environment with high growth potential.

Its integration into global markets, coupled with a young, tech-savvy population and competitive living costs, make it an ideal place for foreigners to establish a company in Vietnam and tap into the vast opportunities of both local and international markets.

Step-by-Step Timeline to Set Up a Company in Vietnam

1. Pre-registration Research (1-2 weeks)
2. Investment Registration Certificate (4-6 weeks)
3.Business Registration Certificate (1-2 weeks)
4. Bank Account and Capital Contribution (1 week)
5. Tax and Labor Registration (1-2 weeks)
6. Licenses and Permits (variable)

1. Pre-registration Research (1-2 weeks)

The first step to set up a company in Vietnam involves thorough market research and choosing the appropriate business structure, such as a limited liability company, joint-stock company, or partnership. Foreign investors need to understand the local market conditions, relevant consumer behavior, and potential legal implications affecting their specific industry. Also, business lines play important roles because there are certain areas that require investment conditions for foreigners to invest in Vietnam because it requires certain conditions to meet i.e. investment amount, foreign ownership ratio, special permits or licenses.

2. Investment Registration Certificate (4-6 weeks)

If your business involves foreign capital, obtaining an Investment Registration Certificate (IRC) is necessary. This document outlines the scope, scale, and impact of your investment and is crucial for industries that require a closer scrutiny of foreign investment impacts on local economies and labor markets.

3.Business Registration Certificate (1-2 weeks)

Registering your business is a pivotal step in the process to set up a company in Vietnam. This involves submitting a dossier including a notarized copy of your passport, investment plan, and company charter. The Department of Planning and Investment (DPI) reviews these documents. The actual processing time can vary, but typically, obtaining the business registration certificate takes about one month, assuming all documents are correctly filed.

4. Bank Account and Capital Contribution (1 week)

After registering your business, the next step to set up a company in Vietnam is opening a corporate bank account and depositing the registered capital. This process can be straightforward or complex depending on the bank’s requirements and the origin of your initial capital.

5. Tax and Labor Registration (1-2 weeks)

Registering with tax authorities and labor departments is essential. This includes obtaining a tax code, registering for value-added tax (VAT), and setting up employee insurance. These registrations ensure that your business complies with Vietnam’s tax regulations and labor laws, which is a crucial aspect of how to establish a company in Vietnam.

6. Licenses and Permits (variable)

Depending on the type of business, additional licenses or permits may be required. For instance, manufacturing companies might need environmental and safety inspections approvals. The duration for obtaining these can vary greatly based on the business type and local regulations.

Why the Process is Worth the Wait

Despite the potential for delays, the process to set up a company in Vietnam is increasingly streamlined thanks to government efforts to attract foreign investment. With its strategic position as a gateway to ASEAN markets, robust economic policies, and digital growth, Vietnam offers a dynamic environment for business success.

In conclusion, the process to set up a company in Vietnam might take anywhere from two to three months, depending on various factors including the type of business, required licenses, and your readiness with the necessary documents.

However, the favorable business climate, growing economy, and the potential to access a large and growing consumer market in Asia make Vietnam a compelling destination for foreign investors. Whether you’re looking to tap into local resources or aiming to use Vietnam as a base to reach other Asian markets, the investment of time is well worth the potential returns.

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Cooperation between Vietnam Japan After the Covid Epidemic

 On May 15, 2020, the Minister of Planning and Investment met Ambassador Mr. Yamada Takio (Japan) on the occasion of starting his working term in Vietnam. The parties spent time welcoming and sharing a number of problems that need to be resolved to promote investment activities between the two countries in the context of the Covid-19 epidemic, including promoting public investment, promoting investment in the private sector, attracting investors to set up company, factory and implement investment into export processing zones in Vietnam.

The Ambassador said there are currently more than a thousand Japanese experts who wish to have work permit, investment visa, temporary residece card to go to Vietnam to restore business production. In addition, Japanese small and medium enterprises are very interested in the Vietnam market. Japan Government has provided 23.5 billion yen (USD 220 million) to encourage domestic enterprises to transfer production activities to Southeast Asian countries, including Vietnam, which is an opportunity for Vietnam to attract FDI to register investment project in setting up factory in Vietnam.

Following the the investment shift after the US-China Trade war (2019) and the Covid-19 epidemic, many Japanese investors intend to withdraw from China to invest in Vietnam to set up factory, and company and form a new supply chain. Accordingly, Vietnam will have a plan to create a working group to attract Japanese enterprises to invest in the fields and provinces that Vietnam wishes to contribute more to the socio-economic development of Vietnam. In 2019, Japan is the fourth-largest FDI country in Vietnam, the second largest investment partner in Vietnam implementing the project, with a total investment of USD 59.3 billion.

With its advantages and experience, Japanese investors are investing in Vietnam in the fields of professional science, technology, information technology, wholesale, retail, engineering and real estate. These industries are the advantages of Japanese investors when investing in Vietnam, which it not only brings benefits to investors but also helps Vietnam to learn management experience and operation from Japan, helping Vietnam to apply to develop the domestic economy.

The Vietnamese representative emphasized the importance to attract Japanese enterprises to invest smoothly and successfully in Vietnam, including large and small and medium-sized enterprises to contribute more to the socio-economic development of Vietnam. At the same time, the Ministry of Planning and Investment continued to work closely with the Embassy as well as with the Ambassador’s individual to bring closer cooperation between the two countries.

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How to Establish Company in Vietnam?

 Foreign investors may invest in the form of 100% capital to establish company in Vietnam, being limited liability company, joint stock company, partnership company.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates. Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier to establish company in Vietnam shall comprise:

-Registration/Request for issuance of Investment Certificate;

-A report on financial capability of the investor;

-Draft of the company’s charter;

-List of members of company;

-Copy of the people’s identity card, passport or other lawful personal certification, for individual members;

-Copy of the establishment decision, business registration certificate or other equivalent document, for member organizations;

-Copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives.

-Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;

-Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;

-The joint-venture contract or Business Cooperation Contract (BCC);

-Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days. The extra time might be needed in case the investment area is conditional or the State government needs to examine the investment project. Minimum capital, special licenses or other conditions might be required in certain investment projects.

With highly professional staff and great experience in foreign investment, ANT Lawyers would like to support you to establish company in Vietnam.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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The UK Entreprises Encouraged to Explore the Potential Market in Vietnam

   In addition to improvement of the business environment in Vietnam, Deputy Foreign Minister Hugo Swire also affirmed that Vietnam and UK will plan to raise awareness for the UK investors about potential business market in Vietnam.

Talking to the press after the Vietnam – UK 4th annual strategic dialogue in Hanoi today (February 27th), Mr. Hugo Swire said, one of the highlights of the conference is how to strengthen bilateral trade relations. According to him, a number of the businesses of the UK have succeeded in Vietnam but the UK wants more and more enterprises to be successful in Vietnam in the future. To do this, the improvement in business environment is one of the problems the UK stressed many times before. Mr. Hugo Swire said that transparency and openness of Vietnam are still big challenges affecting the decision for UK enterprises to invest in Vietnam. Besides, another fact acknowledged by Mr Hugo Swire is that many businesses in the UK have not understood the potential markets in Vietnam.

Therefore, during the dialogue taken place today, he said, Vietnam and the UK have discussed a program to raise awareness of UK businesses in London to Vietnam market. According to Mr Hugo Swire, the completion of free trade agreement between Vietnam and the EU will open up many prospects to attract British investors to Set-up company in Vietnam.

“These problems, if be solved, they will bring to resonance as well as open new horizons for UK businesses to enter into Vietnam,” said Deputy Foreign Minister.

Reviewing more specific about the Vietnam market, he also said, high-end consumer goods is one of the prioritized potentials for businesses of both countries.

According to him, many designers in the UK now want to introduce products to Vietnam and this may be a priority in the coming time. According to him, four other areas in which the Uk interested are education, energy, especially nuclear energy, health, transportation and infrastructure.

According to Mr Hugo Swire, a detailed plan to strengthen relations and cooperation between the two countries on these issues will be discussed in more detail at the annual meeting of the Joint Committee on Economic Cooperation in the future.

Also on bilateral cooperation, Deputy Foreign Minister said the capital of official development assistance (ODA) will end in 2016 but the UK is committed to continue the support for Vietnam by other methods.

One of the forms of assistance is Newton fund currently being deployed in Vietnam to invest in the fields of science and technology, particularly creative ideas, innovation.

According to Hugo Swire, the UK and Vietnam are still under discussion for formal cooperation framework to help the Newton fund operating efficiently. However, representatives from the UK said, one of the activities of the program is the exchange of scientists between the two countries , thus supporting the implementation of the research to develop economics and society.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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Vinh Long Province: 36 projects calling for investment of nearly 18,000 billion VND.

 Vinh Long province has just announced the list of 36 major projects to attract investment in the period of 2012-2015. It is estimated that the total capital investment of these projects are nearly 18,000 billion VND.

Three projects have the largest capital investment are infrastructure construction in Tan Binh Industrial Park (400ha, Binh Tan) with 2,000 billion VND, Dong Binh Industrial Zone project (350ha, Binh Minh) with 1750 billion VND and An Dinh industrial zone project (200ha, Mang Thit district) with 1000 billion VND. In addition, there are six industrial district projects with a capital of about 2380 billion VND.

There are two high-tech projects in which project land are available are the project of manufacturing and processing high-tech agriculture in the district of Mang Thit, investment capital of about 220 billion VND, the project of high-quality factory in Binh Minh district with an area of ​​7 hectares and investment capital of 340 billion VND.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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The UK Entreprises Encouraged to Explore the Potential Market in Vietnam

 In addition to improvement of the business environment in Vietnam, Deputy Foreign Minister Hugo Swire also affirmed that Vietnam and UK will plan to raise awareness for the UK investors about potential business market in Vietnam.

Talking to the press after the Vietnam – UK 4th annual strategic dialogue in Hanoi today (February 27th), Mr. Hugo Swire said, one of the highlights of the conference is how to strengthen bilateral trade relations. According to him, a number of the businesses of the UK have succeeded in Vietnam but the UK wants more and more enterprises to be successful in Vietnam in the future. To do this, the improvement in business environment is one of the problems the UK stressed many times before. Mr. Hugo Swire said that transparency and openness of Vietnam are still big challenges affecting the decision for UK enterprises to invest in Vietnam. Besides, another fact acknowledged by Mr Hugo Swire is that many businesses in the UK have not understood the potential markets in Vietnam.

Therefore, during the dialogue taken place today, he said, Vietnam and the UK have discussed a program to raise awareness of UK businesses in London to Vietnam market. According to Mr Hugo Swire, the completion of free trade agreement between Vietnam and the EU will open up many prospects to attract British investors to Set-up company in Vietnam.

“These problems, if be solved, they will bring to resonance as well as open new horizons for UK businesses to enter into Vietnam,” said Deputy Foreign Minister.

Reviewing more specific about the Vietnam market, he also said, high-end consumer goods is one of the prioritized potentials for businesses of both countries.

According to him, many designers in the UK now want to introduce products to Vietnam and this may be a priority in the coming time. According to him, four other areas in which the Uk interested are education, energy, especially nuclear energy, health, transportation and infrastructure.

According to Mr Hugo Swire, a detailed plan to strengthen relations and cooperation between the two countries on these issues will be discussed in more detail at the annual meeting of the Joint Committee on Economic Cooperation in the future.

Also on bilateral cooperation, Deputy Foreign Minister said the capital of official development assistance (ODA) will end in 2016 but the UK is committed to continue the support for Vietnam by other methods.

One of the forms of assistance is Newton fund currently being deployed in Vietnam to invest in the fields of science and technology, particularly creative ideas, innovation.

According to Hugo Swire, the UK and Vietnam are still under discussion for formal cooperation framework to help the Newton fund operating efficiently. However, representatives from the UK said, one of the activities of the program is the exchange of scientists between the two countries , thus supporting the implementation of the research to develop economics and society.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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Investment Through Signing Contracts in Vietnam

 Business co-operation contract (BCC) means the investment form signed between investors in order to co-operate in business and to share profits or products without creating a legal entity.

Build-operate-transfer contract (BOT) means the investment form signed by a competent State body and an investor in order to construct and operate commercially an infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor shall, without compensation, transfer such facility to the State of Vietnam.

Build-transfer-operate contract (BTO) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall grant the investor the right to operate commercially such facility for a fixed duration in order to recover the invested capital and gain profits.

Build-transfer contract (BT) means the investment form signed by a competent State body and an investor in order to construct an infrastructure facility; and, upon completion of construction, the investor shall transfer the facility to the State of Vietnam and the Government shall create conditions for the investor to implement another project in order to recover the invested capital and gain profits or to make a payment to the investor in accordance with an agreement in the BT contract.

Foreign investors may sign BOT, BT and BTO contracts with a competent State body to implement infrastructure construction projects in Vietnam. Typically, the contracts are for projects in the fields of transportation, electricity production, water supply, drainage and waste treatment.

The rights and obligations of the foreign investor will be regulated by the signed BOT, BT and BTO contract. The Government encourages both public- and private-sector investors to participate in BOT, BTO and BT in the following sectors:

(i) Construction, operation and management of brand-new infrastructure facilities; and

(ii) Renovation, expansion, modernization, operation and management of the existing infrastructure facilities such as:

• Roads, bridges, tunnels, and ferry landings;

• Railway bridges and railway tunnels;

• Airports, seaports and river ports;

• Clean water supply systems; sewage systems;

• Wastewater, waste collecting and handling systems;

• Power plants and power transmission lines;

• Infrastructure works of health service, education, training, career training, culture, sport and offices of State agencies; and

• Other projects as may be determined by the Prime Minister

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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Why Japan Investors Invest in Vietnam

 The depreciation of yen against dollar, more available funds for loans from Japanese banks, and the fast aging population make Japanese corporations increasing investment in foreign markets including Vietnam through setting up business venture.

In a morning of Jan 22nd 2015, the office of Ministry of Planning and Investment and Foreign Investment Agency have met and worked with small and medium business delegation of Japan to explore investment opportunities in Vietnam. The Japanese business delegation led by Mr. Shuichi Kageyama, vice president of Sumitomo Mitsui Banking, are representative of 21 companies operating in the area of construction, real estate, electronics, manufacturing, chemicals, pharmaceuticals products, medical devices. The visit has shown interests of Japanese investors in various sectors in the socio-economic development, environmental and investment policies of the government of Vietnam in attracting foreign investment. The Vietnam government also shows effort to support Japanese investor through improving on administrative procedures, and transparency.

The visit of Japanese delegation to Vietnam should be noted amid the strongest wave of Japanese corporations’ investment into foreign markets since 2006 after building up record cash on hands. The yen has been at weak level making M&A into foreign market expensive. However it is expected that yen will depreciate further against dollar over the year to come due to the policy of Mr. Shinzo Abe. In the meantime, Japanese banks are also ready to make more funds available for loans. Another fact is that Japanese population is aging faster. Those combined reasons together with Vietnam’s attractiveness for investors make Japanese corporations increase investment through making direct investment or acquiring other corporations in foreign markets including Vietnam.

According to the Foreign Investment Agency, as of Oct 2014, Vietnam has attracted more than USD 36.5 billion from Japan with more than 2,434 FDI projects. Japan ranks first in the number of countries and territories that have investment projects in Vietnam, in which, the first 10 months of the year 2014, total investment of newly registered and increased capital from Japan reached USD 1.66 billion. Thanh Hoa has 9 projects with a total investment of USD 9.68 billion; Hanoi has 607 projects at nearly USD 4 billion; Binh Duong province has 241 projects at USD 3.8 billion.

Japanese corporations invest in various area including retail, food processing, IT, manufacturing, constructions. Several prominent Japanese investors have been successful in Vietnam are Cannon, Isuzu Motors, Ajinomoto, Toyota Corporations, Logitem Logistics, Mitsubishi Corp, Kotobuki Holdings, Taisei Corp, Sumitomo Corp, Itochu Corp. The list will continue to grow as the time to come as Japan diversifies from China and Vietnam continues to emerge as an attractive destination.

Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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10 Questions to Ask Before Setting up Company in Vietnam

Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.

However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firms in Vietnam for advice and service offering.

Before setting up business in Vietnam, ask yourself the following questions:

1. Which business should I invest in Vietnam?

There are non-conditional investment areas and conditional investment areas. Establishing company in the non-conditional investment areas are more simple than in conditional investment areas. Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas. Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding… which are more complicated with investment conditions. Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.

2. What should I name the business in Vietnam?

The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name. The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses. For instance, the company could be named Alpha consulting limited liability company.

3. Where should I register the address of the business in Vietnam?

Not every address could be used to register a company. The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.

4. What is the legal structure of the company?

Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two ore more member limited liability company or joint stocks company.

5. How much capital is required to set-up a company in Vietnam?

The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.

6. Whom will be legal representative and work permit in Vietnam?

The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally. The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.

7. How long does it take to set-up a company in Vietnam?

It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e. trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.

8. Whom will be granting the investment license in Vietnam?

For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.

9. What are the tax liability in Vietnam?

Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.

10. What are mandatory reports submissions requirement in Vietnam?

Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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