What Are the Benefit of setting up business in Vietnam?

What Are the Benefit of setting up business in Vietnam?

Vietnam has a coastline that is more than 3,000 kilometers long, and it is situated in a significant region of Southeast Asia. Vietnam's diverse geography includes mountainous, highland, and coastal areas that are suitable for general economic zones, making it an ideal location for the growth of the tourism and trade sectors. Investors can benefit from incentives for land finance, import and export taxes, and corporate income tax when setting up business in Vietnam.

Tax incentives for businesses: The corporate tax rate (CIT) in Vietnam has been gradually decreasing over the past few years. In the 2004-2008 period, CIT was 28%, in the 2009-2013 period it was 25%, from 2014 to 2015, 22% and from January 1, 2016 up to this point, 20%. In addition, the provision of high corporate income tax incentives for a number of essential fields that need to be encouraged for investment has contributed to the attraction of investment, the encouragement of business, the creation of favorable conditions for enterprises to increase accumulation, the increase in investment in the economy, and the promotion of growth, thereby encouraging investors to start businesses in Vietnam.

Tax incentives for imports and exports: Regulations have been added to the 2016 Import and Export Tax Law to exempt high-tech businesses, science-tech businesses, and science-tech organizations from paying import taxes on raw materials, materials, and components that cannot be produced domestically within five years of the start of production. There are also import and export tax incentives being applied such as:

(i)Goods imported for foreign processing are exempt from import tax, and products exported and returned to foreign parties are exempt from export tax;

(ii)The tax payment deadline can be extended to 275 days from the date of filing the customs declaration for goods that are imported for the purpose of processing and are exempt from tax, goods that are temporarily imported for re-export, and goods that are raw materials and supplies used in the production of exported goods; Taxes on goods temporarily imported for re-export may be paid 15 days after the expiration date;

(iii)The creation of fixed assets for investment projects in areas of special investment encouragement, investment promotion fields, and locality with difficult socio-economic conditions is exempt from import tax on goods.

Incentives on land finance: The general land rent can be reduced from 1.5 percent to 1 percent for foreign investors investing in Vietnam. Furthermore, the State likewise specifies the utilization of the land cost change coefficient in deciding the land cost to compute the land lease, consequently, making Vietnam progressively turning into a good objective to draw in unfamiliar speculation and company foundation in Southeast Asia.

In the spirit of the state ensuring the rights of the investors' ownership, investment capital, and other interests of foreign organizations and individuals, creating favorable conditions, and simplifying procedures for such organizations and individuals to invest in Vietnam, the development of a transparent and consistent investment legal system is also increasingly becoming a useful tool to promote inflows of foreign direct investment into Vietnam.

The international public considers Vietnam's foreign investment law to be more open and appealing than those of some of the countries in the region. For instance, the law allows for 100% foreign capital ownership, administrative procedures are simplified, and there is no discrimination between Vietnamese and foreign-invested businesses. The law has been changing to see investment and business as matters between businesses and investors, with investors having full authority to make decisions about everything from investment projects to the company's formation and operations, and the government only guiding, creating an open legal environment with favorable mechanisms and procedures, supervising, and enforcing the law.

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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 firm in Vietnam for advice and service offering.

10 Questions to Ask Before Setting up Company in Vietnam

Before setting up company 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.

Source ANTLawyers: https://antlawyers.vn/library/10-questions-to-ask-before-setting-up-company-in-vietnam.html

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Da Nang – Boras (Sweden) cooperates in the field of science education

On the afternoon of January 15th, 2021, the People’s Committee of Da Nang City in collaboration with the city government of Boras (Sweden) organized an online seminar on the UN’s sustainable development goals to 2030, within the framework of the project “Scientific education for sustainable development in Da Nang” cooperation between Da Nang and Boras.

Based on the UN’s sustainable development goals up to 2030, in which education, environment, science, and technology development are the goals that Da Nang cares for and develops. The city seeks to ensure quality, open and equitable education and increase lifelong learning opportunities for all the citizens, ensure availability and sustainable management of water resources of the city, build solid infrastructure, promote open and sustainable industrialization, and encourage innovation. The city takes urgent measures to combat climate change and its impacts, conserve and sustainably use the oceans, seas, and marine resources for sustainable development, protection, regeneration, and promotion encourage the sustainable use of terrestrial ecosystems, manage forest resources sustainably, combat desertification, prevent soil erosion and loss of biodiversity.

For the Boras city -Sweden, with the goal of sustainable development, Boras city focuses on implementing a number of contents such as improving the institutional system, policies, strengthen information and communication, promote the role and participation of the parties, arrange, mobilize and strengthen financial resources, and strengthen international cooperation.

Da Nang hopes that science education project for sustainable development in Da Nang, which is cooperated between Da Nang and Boras, will have specific activities, contributing to improving the capacity of science education, promoting innovation associated with sustainable development goals in the city.

Da Nang and Boras have cooperated for many years, with many policies to attract and support Swedish investors. Many Swedish investors and enterprises have chosen Da Nang as the investment destination in Vietnam to set up company, establish factory, apply for investment registration certificate. In the coming time, Da Nang-Boras hopes that more investors from Sweden will invest in the city in wastewater and solid waste treatment projects to further strengthen cooperation in investment, education, and science between the two cities.

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Vietnam and Japan Signed 12 Cooperation Agreements

The Secretary General of Liberal Democratic Party of Japan, the President of Japan – Vietnam Friendship Parliamentary Union- Nikai Toshihiro, on January 12^th, 2020 met with the Vietnam’s Prime Minister- Mr. Nguyen Xuan Phuc in Hoi An to discuss economic, cultural and tourist exchange topics.

At the meeting, the representative of Vietnam welcomed the Japanese delegation to come and exchange of economic, cultural and tourism exchanges of the two countries. The representative of Vietnam affirmed that Vietnam appreciate the cooperation with Japan, especially in economic matters. At the moment, Japan is the top country with FDI in Danang in particular and Vietnam in general. The Japanese investors set up company, obtain investment registation certificate and invest in various business lines including IT, trading, real estate, design consultancy, engineering. Based on the cooperation between the countries, Vietnam and Japan have achieved many positive effects on the economy, education, culture, social security.

The representative of Vietnam confirmed that the relationship between the countries developed into many fields as “extensive strategic partnership for peace and prosperity in Asia” established in 2014, in which, Japan always is the trustful, important partner of Vietnam.

The representative of Japan expressed his pleasure to visit Vietnam in the beginning of  2020. He said that the organization of the delegation has the largest scale ever with more than 1,000 delegates, and diverse members from National Assembly deputies, representatives of ministries, branches, local leaders, businesses and people of Japan showed high interest and consensus within Japan from the National Assembly, the Government, localities, business community and people towards strengthening and deepening friendly and cooperative relations with Vietnam in the coming time.

By this meeting, the representatives of the two countries witnessed the signing and exchange of 12 cooperation documents, memorandums of understanding between ministries, branches, localities and businesses of the two countries. By these cooperation documents, the two countries hope that in the future, they will cooperate more together in all aspects of culture, education, economy and society to realize their construction goals and develop the countries.

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Which area of business foreign investors could invest in Vietnam?

Recently, Vietnam has been an attractive investment destination to foreign investors thanks to the social-economic innovation policy from the early 80s of the twentieth century to the present. The economic, political and social situation always keeps stability and achieves remarkable developments, establishing trade relations with most countries in the world. Especially, Vietnam Government has been focusing efforts to improve the investment and business environment, which is favorable for not only domestic investors but also foreign investors. The Government has been issuing policies to improve the business environment, support business development and take decisive actions through resolutions and legal documents.

Set up business in Vietnam

In addition to continuing to implement incentive policies to attract foreign investment such as corporate income tax exemption and reduction, import tax exemption for a number of industries, exemption from rent and land use,…the Government is also committed to reform administrative procedures to simplify procedures, create the best conditions for investors, and opening the economy for foreign investors.

Foreign investors, when investing in another country, must identify their business lines and areas of business, and consult with experts or Vietnam lawyers whether that business line is subject to any special conditions. There are areas with out conditions of investment and but there are also industries that are restricted from doing business under strict conditions, and even prohibiting business in specific professions on purpose.

In Vietnam, the investors of Vietnamese are free to do business in area which which is not in the list of prohibited. For foreign investors, the business lines allowed to invest are considered based on Vietnam’s WTO Commitments on Trade in Services and the Agreements signed between Vietnam and other countries. After that,  business conditions in each specific industry to foreign investors will be applied.

General conditions applied to domestic and foreign investors are that investors are entitled to carry out business investment activities in industries and trades which are not prohibited by laws. The industries and trades banned from business investment include: trading in narcotic substances; trading in some toxic chemicals, precursors, minerals; trading in specimens of wild plants and animals according to the provisions of Appendix 1 to the Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of endangered, precious and rare wild animals and plants of Group I originated from nature according to the provisions of the Investment Law; trading in prostitution; buying and selling people, tissues, body parts; business activities related to asexual reproduction on people; and trading in firecrackers.

Apart from the above-said prohibited business and investment lines, the remaining industries and trades are divided into conditional business lines and common business lines. For common business lines, investors can freely invest without barriers. By contrast, conditional business lines impose conditions that must be met if organizations wish to invest. Understanding the business lines is the first step for investors to enter the Vietnam market and consulting with Vietnam lawyers would help investors make informed decision for their business plan in Vietnam.

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Issuing Investment Certificate for Foreign Investors

Foreign investors whom wish to carry out business in Vietnam need to have investment project proposal prepared for submission to State Authority in Vietnam.  Investment projects of foreign investors and projects of economic organizations with 51% or more foreign owned capital (except for cases of capital contribution, purchase of shares or capital contributions of economic organizations) need to follow procedures for issuing Investment Registration Certificate (IRC).

invest in  Vietnam 

Investment registration certificate records information of an investor’s registration of an investment project. In Vietnam, the agency which has competent to grant, adjust and revoke investment registration certificates is the Department of Planning and Investment or the Management Board of Industrial Parks, Export Processing Zones, High-Tech Zone and Economic Zone depending on the specific project details. The time limit for issuing investment registration certificates for each project is usually 15 days from the date of receipt of a complete application dossier submitted by the investors.

When the investors need to change the scope, purpose of an investment registration certificate, he must carry out the procedures for adjusting the investment registration certificate corresponding to the changed content. Within 10 days, this procedure will have results based on the records that investors submit to the competent authorities.

The existence of an investment project permitted by the State for an investment project in an economic zone shall not exceed 70 years; investment projects outside economic zones shall not exceeding 50 years; investment projects implemented in geographical areas with difficult socio-economic conditions, areas with exceptionally difficult socio-economic conditions or projects with large investment capital but with slow capital recovery, the term can be granted longer but not more than 70 years.

In some cases, to ensure the project implementation in Vietnam, the State issues regulations that require obligations of investor. During the operation of a project, for projects that are allocated or leased land, permitted to change the purpose of land use by the State, investors must make a deposit from 1% to 3% of the project investment capital to ensure project implementation based on the scale, property and implementation schedule of each specific project. This deposit is returned to the investor according to the progress of the investment project, unless otherwise refunded. In addition, investors are responsible for ensuring the quality of machinery, equipment, technology lines to execute investment projects in accordance with law by themselves.

In case of subjective or objective reasons, the investor is entitled to transfer the investment project, delay the investment schedule, suspend the operation of the investment project, or terminate the investment project’s operation.

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An Additional of 60 FDI Projects Received Investment Licenses into Hanoi

According to Hanoi’s Department of Planning and Investment, in November, the city had 60 newly licensed FDI projects with a total registered capital of 600 million USD.

Of these, there are 52 projects with 100% foreign direct investment; 8 joint venture projects. Besides, there are 8 projects being adjusted to increase investment capital with the additional capital of 6.7 million USD.

Also, in November 2019, foreign investors contribute capital and buy stakes reach 72.9 million USD.

Notably, during the recent Prime Minister’s business trip to Korea, the leader of Hanoi People’s Committee awarded 4 investment policy decisions worth more than 400 million USD, signing the memorandum of understanding to invest in Hanoi worth more than 4 billion USD.

Accumulated from the beginning of the year to November 25^th 2019, the total registered capital of newly established projects and additional capital increased projects reached 2,142 million USD, of which newly registered 788 projects with total capital of 1,562 million USD; 160 additional projects register to increase investment capital of 580 million USD.

In the first 11 months of 2019, foreign investors contributed capital, buying capital contribution reach 5,330 million USD.

Previously, in October 2019, Hanoi had 91 newly licensed FDI projects with a total registered capital of 468 million USD, of which 72 projects were 100% foreign direct investment, 19 joint venture projects. Of these, foreign investors contribute capital and purchase shares reach 5,330 million USD. The number of projects terminating, suspending and dissolution is 27 projects, of which 24 projects are 100% foreign direct investment and joint ventures are 3 projects.

Major projects from the beginning of the year until now have invested in Hanoi such as the capital contribution and share purchase project of Beerco Limited (Hong Kong) in Vietnam Beverage Co., Ltd., the value of the capital contribution is 3.85 billion USD with the main target of brewing and brewing malt in Hanoi. The project Meiko Electronics Co., Ltd. (Hong Kong) with the goal of designing, assembling and manufacturing electronic components in Hanoi adjusts to increase an additional of 200 million USD investment capital.

Hanoi together with many leading corporations in Japan also exchanged memorandums of understanding (MOUs) on investment cooperation in many projects in the city with a total committed investment capital of up to 3.75 billion USD.

In addition, the newly released data of Foreign Investment Agency (Ministry of Planning and Investment), in the first 11 months, the country has attracted nearly 31.8 billion USD of foreign investment, up 3.1. % compared to the same period last year.

Specifically, in 11 months, capital contribution and share purchase reached US $ 11.24 billion, up 47.1% over the same period in 2018 and accounting for 35.4% of the total registered capital. Meanwhile, both newly and increased capital decreased. Specifically, newly granted capital reached 14.68 billion USD, down 7%; additional capital reached US $ 5.87 billion, down 10.7% over the same period last year.

In addition, the newly released data of Foreign Investment Agency (Ministry of Planning and Investment), in the first 11 months, the country has attracted nearly 31.8 billion USD of foreign investment, increase by 3.1% compared to the same period last year.

Specifically, in 11 months, capital contribution and share purchase reached 11.24 billion USD, increase by 47.1% over the same period in 2018 and accounting for 35.4% of the total registered capital. Meanwhile, both newly and increase capital decreased. Specifically, newly granted capital reached 14.68 billion USD, decrease by 7%; additional capital reached 5.87 billion USD, decrease by 10.7% over the same period last year.

ANT Lawyers, your lawyers in Vietnam.

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What are common investment methods in Vietnam?

In Vietnam laws, there are a number of investment methods such as establishing economic organizations; investment in the form of capital contribution, purchase of shares or capital contributions in business organizations; Business Cooperation Contract or Public Private Partnership. Investment in establishing economic organizations, capital contribution, purchase of share or capital contributions are most common in our opinion.

Establish Company in Vietnam

Investment in establishing economic organizations

For investment in the establishment of economic organization, an investor invests capital to carry out the establishment of an enterprise, cooperative, cooperative union or other organization to carry out business investment activities. This is a way of direct investment in which investors directly invest capital and directly participate in management activities.

Forms of establishment of economic organizations include two types: Establishing company with 100% foreign capital; or establishing joint ventures between domestic investors or the Government of Vietnam with foreign investors.

Before establishing an economic organization, the foreign investor must have an investment project and carry out the procedures for the grant of an investment registration certificate. Besides, the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member need to be met. Regarding charter capital, foreign investors are allowed to hold unlimited ownership in economic organizations, except for cases where the investors operate in fields related to listed companies, public companies, securities trading organizations and securities investment funds in accordance with the law on securities; State owned enterprises equitized or transformed under other forms. In addition, investors must check international treaties to which Vietnam is a signatory.

It should be noted that depending on the amount of investment capital of a foreign investor, the legal status of an economic organization after its establishment will be determined differently. If the foreign investor holds 51% or more of charter capital, the economic organization after its establishment will have to carry out the procedures applicable to foreign investors. Conversely, if foreign investors hold less than 51% of the charter capital, the regulations applicable to economic organizations after their establishment are applied as domestic investors.

Investment in the form of capital contribution, purchase of shares or capital contributions in business organizations

Foreign investors who wish to access the Vietnamese market but do not want to establish an economic organization can contribute capital, buy shares or buy capital contributions to business organizations operating in Vietnam.

With this form, the investor will become a member or shareholder of that economic organization. It requires investors to meet a conditions similar to the form of establishment of economic organizations. Having said that, it must meet the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member. Depending on each specific case, the investor must follow the procedures for registration of capital contribution, purchase of shares or capital contribution in an economic organization and send to the competent agency for recognition of legal investment.

Understanding the regulations are important for investors to enter the Vietnam market and consulting with Vietnam lawyers would help investors make informed decision for their business plan in Vietnam.

ANT Lawyers, your lawyers in Vietnam.

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Quang Ninh Is About to Receive 40 Million USD of FDI From Korean Investors

Recently, Chairman of Bumjin Electronic Company from Korea had a meeting with Chairman of Quang Ninh People’s Committee on the implementation of the project in Quang Yen town.

Accordingly, the Company is preparing to deploy the investment project to build audio equipment factory in Dong Mai Industrial Park, Quang Yen Town, Quang Ninh Province with a total investment of 40 million USD. It is expected that the project will be started construction and go into production in December 2019.

Chairman of Quang Ninh People’s Committee affirmed that the investment project of Bumjin Electronic Company is the area that Quang Ninh province is prioritizing to attract investment. To ensure on time schedule that the company has set, Quang Ninh province confirmed to provide maximum support during project implementation.

He also shared with investors that Quang Ninh province is proposing the Government to allow the establishment of Quang Yen coastal economic zone with better preferential policies. At the same time, Chairman of Quang Ninh People’s Committee expressed his desire that besides the project implementation, Bumjin Electronic Company will become a bridge to connect Quang Ninh and Korean investors, contributing to promote investment activities of Korean businesses in Quang Ninh in the future.

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Forms of Company to be Set-up in Vietnam

According the Vietnam Law on Enterprises, there are four common types of companies

-Private enterprise is an enterprise owned by an individual who is liable for all of its operations with his/her entire property;

-Partnership is an enterprise in which (i) there are at least two partners who are co-owners of the company, jointly conduct business under one common name; in addition to general partners, there may also be limited partners; (ii) general partners to a partnership must be individuals who are liable for all obligations of the partnership with his/her own entire property; (iii) Limited partners shall be liable for debts of the partnership only to the extent of their capital contribution to the partnership;

-Joint stock company is an enterprise where (i) Its charter capital is divided into equal portions known as shares; (ii) Shareholders may be organizations and/or individuals; the minimum number of shareholders shall be three and shall not be restricted to any particular maximum number; (iii) Its shareholders shall be liable for debts and other property liabilities of such enterprise within the limit of the value of their capital contribution to the enterprise; (iv) Shareholders shall be entitled to freely transfer their shares according to the provisions of law;

-Limited liability company (multi-member limited liability company and single-member limited liability company). A one-member limited liability company is an enterprise which is owned by one organization or individual (hereinafter referred to as the company owner); the company owner is liable for debts and other property liabilities of the company within the charter capital of the company. A limited liability company is an enterprise of which: (i) Members may be organizations and/or individuals; the total number of members shall not exceed fifty; (ii) Members are responsible for debts and other property liabilities of the enterprise within the amount of capital that they have committed to contribute to the enterprise; (iii) Capital shares of the members may only be transferred in accordance with the provisions of law.

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How To Set-up Trading Company in Vietnam

Investment in setting up trading company in Vietnam is considered as investment in conditional investment areas

Once an underdeveloped country, in the last two decades Vietnam has shown an incredible growth in the world economic scene, especially in the criteria of investment attraction. For a foreign company that is interested in expanding the business in a new country or region, Vietnam is a promising destination. In order to start a company or specifically a trading company in Vietnam, foreign investor should comprehensively understand the formality and function of the legal entity to be formed according to Vietnam Law. The consultancy and guidance of skilled and qualified lawyers in Vietnam law firm throughout the process shall mostly be needed.

The legal basis for a foreign company to set up a company in Vietnam is stated in the Enterprise Law of Vietnam: foreign organizations and individuals will be entitled to establish and manage enterprises in Vietnam in accordance with this law, with some exceptions.  Foreign investors may invest in the form of 100% foreign- owned capital to establish limited liability companies, joint-stock companies, partnerships or private enterprises under the provisions of the Enterprise Law and relevant laws.

The foreign investor shall mostly needs to fulfill the investment registration procedures at provincial-level state agencies in charge of investment in order to be granted the investment certificates, in accordance with Vietnam law in investment. The dossier required for the investment registration shall comprise of an examination dossier, papers showing the capability to satisfy the conditions which the project is required by law to satisfy, for investment projects in conditional investment domains i.e. specific goods to be traded at HS code level, experience in trading area, how the trading procedures would be carried out, potential business in Vietnam.

In particular, for investment capital, it should be noted that, trading company needs to commit larger investment in terms of capital, since its function is to identify competitive suppliers, negotiate and purchase their products and sell them through a distribution network in Vietnam. In the meantime, the investor needs to have experience in trading to run the business smoothly and efficiently. The investor should explain why the company would contribute to the development in Vietnam when applying for investment license at Department of Planning and Investment, and Ministry of Trade and Commerce.

Source: ANTLawyers.vn

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How to Set-up Travel Services Business in Vietnam

Foreign investor could only set-up joint venture with Vietnam travel agency to set-up travel services business in Vietnam because transport of passenger belongs to investment areas with conditions applied to foreign investor inVietnam.

No one could deny that information technology has tremendously changed the way travel services business operates.  The use of booking reservation system application on smartphone and internet are widespread that make travel has never been easier.   Foreign investor would be interested to explore the travel services market. However, 100% foreign owned company is not allowed to set-up in travel services business in Vietnam. As this investment area is conditional, it is advised that a law firm in Vietnam should be consulted to ensure compliance with local regulations.

The application process and documents requirements are briefly as following:

I. Required documents:

1.      Application for the International Travel Business License (form);

2.      Certificate of business registration (copy – certified)

3.      Business plan for the international travel agency;

4.      Tour schedule

5.      Proof of at least 4 years of experience in international travel business operations

6.      Certified copies of the tourist guides’ cards whereby at least 3 international tourist guides are required

7.      Confirmation of bank deposit (as per regulations);

8.      Proof of office premises or legally registered place of business

II. Business License Application Procedure

1.      Submission of the required documents to the correct authority (Department of Culture, Sports and Tourism of the province/city where the business is headquartered).

2.      The Department of Tourism of the province/city completes the records of appraisal and submits a written request with the agency’s records to the Minstry of Culture, Sports and Tourism in Vietnam within ten working days from the date of receipt of a valid application. When cases are not eligible for the proposed permit to the state agencies, the provincial tourism department shall cite the specific reasons for refusal.

3.      The state management agency of tourism (VNAT – Ministry of Culture, Sports and Tourism) is responsible for reviewing and licensing the international travel business within ten working days from the date of both receipt of the file and written request of the state agency of tourism in the province. In case of refusal, the ministry shall state the specific reasons to the state and provincial tourism authorities

III. Number of records

– Submission to the Department of Culture, Sports and Tourism: 01

– Tourism Authority Filed in: 01

Source: ANTLawers.vn

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How Foreign Entity Could Set-up a Branch Office in Vietnam

A foreign business entity or a foreign trader is allowed to set-up a branch in Vietnam to conduct business activities.

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam.  A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself.  The Vietnam Department of Industry and Trade will be approving the establishment of a branch in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to as the “Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its licence for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

1. Rights of the Branch

• To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.
• To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.
• To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.
• To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.
• To remit profits abroad in accordance with the law of Vietnam.
• To have a seal bearing the name of the branch in accordance with the law of Vietnam.
• To conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

2. Requested conditions for establishment the Branch in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Branch in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

• Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;
• Having been operating for at least five years after its lawful establishment or business registration.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department  after the foreign company meets all of conditions as Vietnam legal requirements.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

Source: ANTLawyers.vn

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