Foreigners are
encouraged to make investment in Vietnam through direct investment by Settingup 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 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 spec
