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 firm 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 or 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.
ANT Lawyers is a law firm in Vietnam, recognized by Legal500, IFLR1000.
We are an exclusive Vietnam member of Prea Legal, the global law firm network
covering more than 150 jurisdictions. The firm provides a range of legal
services to multinational and domestic clients. For advice or services request,
please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.
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