What 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.

Vietnam presents a compelling opportunity for investors looking to establish a company and tap into its burgeoning market. With a dynamic economy, strategic geographical location, and a favorable business climate, Vietnam offers a wealth of advantages that make it an attractive investment destination.

As investors contemplate their next venture, the following questions provide essential insights into the process of setting up a company in Vietnam, ensuring a smooth and successful establishment within the country’s vibrant business landscape.

Before Setting Up Company in Vietnam, Ask Yourself the Following 10 Questions:

1. Which business should I invest in Vietnam?

2. What should I name the business in Vietnam?

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

4. What is the legal structure of the company?

5. How much capital is required for setting up a company in Vietnam?

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

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

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

9. What are the tax liability in Vietnam?

10. What are mandatory reports submissions requirement in Vietnam?

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.

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.

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.

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.

How Much Capital is Required for Setting Up 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.

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.

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 Vietnam in conditional investment areas i.e.  trading company, 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 Vietnam 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.

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.

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.

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.

How a Law Firm in Vietnam Could Help Setting Up Company in Vietnam?

As Vietnam continues to experience rapid economic growth and embraces market-oriented reforms, it emerges as a prime location for foreign investors setting up company in Vietnam. With a diverse range of investment areas, straightforward registration processes, and a supportive legal framework, Vietnam provides ample opportunities for success.

By carefully considering the crucial factors outlined in this essay, such as business selection, legal requirements, capital investment, and taxation, investors can navigate the intricacies of setting up company in Vietnam with confidence. Moreover, the country’s commitment to attracting foreign investment, coupled with its strategic regional position and favorable trade agreements, positions Vietnam as a gateway to the flourishing markets of Southeast Asia.

Investing in Vietnam can unlock immense potential, enabling investors to thrive in a dynamic and promising business environment.

Source ANT Lawyers: What 10 Questions to Ask Before Setting up Company in Vietnam?

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How Easy to Start a Business in Vietnam as a Foreigner in 5 Steps?

Why to Start a Business in Vietnam?

In recent years, Vietnam has become an attractive destination for foreign investment thanks to its advantages of security, political stability, and favorable geographical position to trade with the world. This is both the connection center of the region and the gateway to penetrate the economies in the western region of the Indochina Peninsula. In addition, the Vietnam government has increasingly been offering more preferential policies to create favorable conditions for foreign investors to start a business in Vietnam.

How to Start a Business in Vietnam?

5 Questions to Ask When Starting a Business in Vietnam as A Foreigner:

1.What is your business structure in Vietnam?
2.What business do you do in Vietnam?
3.Where do you locate the business in Vietnam?
4.What do you name your business?
5.What certificates to apply for your business?

What is Your Business Structure in Vietnam?

To start a business in Vietnam, investors first need to choose for themselves an appropriate type of business based on the number of capital contributors, the amount of capital contributed, and the business’s purse.

According to the provisions of Vietnam law, foreign individuals and organizations can start a business in Vietnam to establish a limited liability company or a joint stock company or a partnership or a private enterprise.

What Business Do You Do in Vietnam? 

The next issue that needs to be considered is the business line.

In order for the company to be able to operate, the company must register the appropriate business lines, related to business activities.

1. Non-conditional businesses

If the selected line of business does not require conditions, the enterprise can go into operation after the establishment of the company. This is considered non-conditional business area which most of company would do.

2. Conditional businesses

However, if the investor chooses a conditional business line to start a business in Vietnam, the enterprise must meet the necessary requirements, apply for a business license as prescribed, and then go into operation. This is considered conditional investment area where there are some restrictions being required license, minimum charter capital, foreign ownership ratio…

Where Do You Locate the Business in Vietnam?

Investors also need to choose a location for their business, which is legally allowed to conduct business activities. The company address must be located in the territory of Vietnam, and comply with requirement corresponding to purpose of business i.e. company address can not be in an apartment building or a dormitory for living purposes only; factory location has to be at proper zone for industrial purpose…

What Do You Name Your Business?

In order to serve the management of the State and facilitate business activities, newly established businesses need to have their own name and this proper name must be unique, not be the same or similar to previously registered businesses.

Enterprises are not allowed to use the names of functional agencies, state management agencies to name the company. The name of the business must include the type of company and proper name.

To avoid duplication with other companies, businesses can use abbreviations or English names, but must ensure that the company name will not cause confusion, without adding prefixes, suffixes or cultural symbols in the name of the business.

What Certificates to Apply for Your Business?

1. Investment registration certificate in Vietnam

The investors need to apply for an Investment Registration Certificate at a competent authority in Vietnam. This is a mandatory procedure for all projects that want to establish a new legal entity in Vietnam.

The processing time for an investment certificate application is around 30 days depending on the specific project.

2. Enterprise registration certificate in Vietnam

After being granted an Investment Registration Certificate, foreign individuals and organizations need to prepare an application for an Enterprise Registration Certificate at the Department of Planning and Investment which would take around 7 days. Completing this procedure, the enterprise has the legal status according to the provisions of the Law on Enterprises of Vietnam to start a business in Vietnam.

From day one since you start a business in Vietnam commencing its operation, the company could by itself or hire professional to assist with monthly compliance service i.e., submit foreign labour reports, submit investment report, submit tax report, submit health and insurance reports to authorities to avoid encountering penalties.

FAQ: Start a Business in Vietnam

Q1: What does it mean to start a business in Vietnam?

A: To start a business in Vietnam means legally launching your enterprise, from choosing the right business structure and fulfilling legal requirements to obtaining necessary approvals, registering your business, and setting up for operations in Vietnam.

Q2: Who can start a business in Vietnam?

A: Both foreign investors and Vietnamese nationals can start a business in Vietnam. Each must select the appropriate structure, like an LLC, joint-stock company and prepare the required documentation accordingly.

Q3: What initial step should investors take when they start a business in Vietnam?

A: First, choose a suitable business type based on capital contributors: one-member or multi-member LLC, or other forms under Vietnamese corporate law.

Q4: What are the essential steps to start a business in Vietnam?

A: Key steps include:

1. Selecting the appropriate business structure and name.
2. Gathering necessary documents: charter, registration, financial statements, etc.
3. Submitting your business registration to the Department of Planning and Investment.
4. Obtaining approval and completing registration.

Q5: What documents are required when foreign investors start a business in Vietnam?

A: You’ll typically need:

• Business registration certificate, company charter, financial statements of the foreign entity.
• Translations and notarizations as needed.
• Office lease agreement and other compliance documentation depending on the sector.

Q6: Are there tips for helping investors start a business in Vietnam more smoothly?

A: Yes, know that opening a business in Vietnam comes with both opportunities and local nuances. Learn market dynamics, legal frameworks, and administrative expectations early.

Q7: What corporate forms are commonly used when people start a business in Vietnam?

A: Foreign or local entrepreneurs often choose:

• Limited Liability Companies (one-member or multi-member LLC)

Source ANT Lawyers: How Easy to Start a Business in Vietnam as a Foreigner in 5 Steps?

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Vietnam Arbitration Law Reform: 7 Reasons Foreign Counsels Cannot Ignore

 Change is real. Business needs certainty. Counsel needs clarity.

With changes in competitiveness in international dispute resolution, Vietnam arbitration law reform is entering a decisive moment. Investors are negotiating large contracts. Legal teams are selecting seats and institutions. The system in Vietnam is ready for its next stage. The question for foreign counsel is simple. How can you plan today so that your contracts benefit from tomorrow’s improvements.

In here, we discuss why now is the right time to pay attention and how you can turn reform into practical advantage.

Vietnam Arbitration Law Reform: 7 Reasons Foreign Counsels Cannot Ignore

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Trademark protection in Vietnam? How does it work?

Trademark Protection in Vietnam

How to protect trademark in Vietnam?

Trademark protection in Vietnam is initially obtained through trademark registration. Trademark opposition could be filed to prevent a pending application for a mark from being granted application. Litigation is the final measure to handle dispute during trademark protection in Vietnam.

Trademark is a sign that help distinguish the goods or services of one enterprise from those of others. Together with industrial design and patent, trademark of goods and services plays an extremely important role for the growth of the enterprise. Trademark establishes a link between enterprise and customer. A strong trademark will attract customers to use goods or services. When trademark is popular and economic benefits achieved through sale of goods or provision of services coupled with trademark is large, the violation of trademark is inevitable.

Trademark violation in Vietnam

The annual reports of the Vietnam National Office of Intellectual Property (NOIP) prove that trademark violation in Vietnam is the most popular, among other industrial property rights. According to the preliminary annual report in 2011, and 2012, there has been more than 1,000 cases of trademark violations each year. Report of 2013 and after shows more than 2,000 trademark infringements were handled with the total fines of trademark violators of around USD 1 million per year.

How to register trademark in Vietnam?

Having said that, it is important for trademark owner to register trademarks in Vietnam for better protection.  This is also suggested for even well-known trademarks.

For registration, the trademark owner has two options:

1. Directly register trademark in Vietnam by filling an application for registration with the Vietnam NOIP,

2. Seek the trademark protection in Vietnam through Madrid’s system.

For the first option, the trademark owner needs to prepare, file for registration, and pay fee as the requirement of Vietnam Intellectual Property law. In case trademark needs to be protected in a number of nations, including Vietnam, trademark owner may register trademark through Madrid’s system.

How to handle trademark infringement in Vietnam?

Where the violation of trademark occurs, trademark owner needs to judge the level of infringement, level of damage to choose suitable resolutions. Initially, the trademark owner may protect by requiring to the trademark violator to terminate the infringing acts, apologize, and rectify. In case of being damaged, trademark owners have rights to claim compensation. If failing to reach result, trademark owner may use settlement mechanism through negotiation or mediation or could request the competent state agencies to handle acts of infringement through i.e. filling a denunciation application and submitting to the Vietnam NOIP.

Litigation might be required to handle acts of infringement. Generally, the proceeding of civil litigation is more complex than the arbitration proceeding. In cases the trademark owner needs a decision from court in order to end trademark infringement, civil litigation is top priority. In the remaining cases, arbitration is a better choice with advantages of cheaper cost, shorter settling time, and more flexible.

Source ANT Lawyers: Trademark protection in Vietnam? How does it work?

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Trademark Opposition in Vietnam: 10 Critical Facts Every Foreign Business Must Know to Protect Your Brand

Safeguard Your Business Legacy in Vietnam

Imagine the situation that your business has successfully entered Vietnam’s vibrant market. Your products or services are gaining traction, your brand is becoming recognized, and your future in the region looks bright.

But one day, you discover a competitor, or worse, an opportunist, has filed a trademark application that resembles your brand too closely. If left unchecked, this could lead to customer confusion, brand dilution, and a tarnished reputation.

Trademark disputes in Vietnam are not just frustrating; they can be devastating to your business. Fortunately, trademark opposition in Vietnam offers a critical lifeline to safeguard your intellectual property. In here, we will uncover the 10 most crucial aspects of trademark opposition in Vietnam, empowering you to act decisively and protect your business legacy.

Understanding Trademark Opposition in Vietnam

Vietnam’s dynamic business environment has made it a hub for foreign investors. However, its first-to-file trademark system demands vigilance to prevent others from unfairly benefiting from your brand. Here’s what you need to know about trademark opposition in Vietnam:

What is Trademark Opposition in Vietnam?

Trademark opposition in Vietnam is a legal procedure that allows third parties to challenge a trademark application before it is officially registered. In Vietnam, this process is administered by the National Office of Intellectual Property (NOIP).

This system is particularly vital for foreign businesses, as it provides a structured mechanism to prevent potential infringement, even if the trademark has yet to be fully registered.

Why is Trademark Opposition in Vietnam Important for Foreigners?

Vietnam’s first-to-file system means whoever registers a trademark first generally has the upper hand, regardless of actual use. This system can pose challenges for foreign businesses, especially those who have not registered their marks in Vietnam but are already operating under a recognizable brand.

Trademark opposition in Vietnam enables foreign companies to:

• Prevent registration of conflicting trademarks.
• Protect well-known marks, even if unregistered in Vietnam.
• Combat bad-faith filings by opportunists seeking to exploit your brand.

The Step-by-Step Guide to Trademark Opposition in Vietnam

To ensure success, it’s essential to understand the procedural nuances of the process of trademark opposition in Vietnam.

1. Who Can File a Trademark Opposition?

Any individual or organization, foreign or domestic, can file an opposition. You do not need to be directly affected by the trademark to raise concerns. This broad eligibility empowers foreign businesses to act proactively.

2. Grounds for Filing an Opposition

The NOIP allows oppositions on several grounds, including:

• Conflict with existing trademarks: If the application is identical or confusingly similar to your registered or well-known trademark.
• Bad faith: When the application was filed with malicious intent, such as capitalizing on your brand’s reputation.
• Lack of distinctiveness: If the applied-for mark fails to meet distinctiveness requirements.
• Similarity to trade names: If the mark conflicts with an established trade name in Vietnam.
• Violation of public interest or morality: Marks that are deceptive, misleading, or contrary to public policy.

3. When to File a Trademark Opposition?

Timing is critical in trademark opposition in Vietnam. Once a trademark application is published in the Industrial Property Official Gazette, interested parties have five months to file an opposition. Missing this deadline could mean losing your chance to challenge the mark.

How the Opposition Process Works in Vietnam

1. Filing a Trademark Opposition

The process begins with submitting a written opposition to the NOIP. This submission must include:

• A detailed explanation of the grounds for opposition.
• Supporting evidence, such as trademark registrations, proof of use, or documentation of well-known status.
• Payment of the required filing fee.

2. What Happens After Submission?

• Notification to the Applicant: The NOIP informs the trademark applicant about the opposition and allows them two months to respond.
• Review by the NOIP: The office examines all arguments and evidence before rendering a decision.
• Potential for Rebuttal: In some cases, the opposing party may be allowed to submit additional responses or clarifications.

3. The Outcome: What to Expect

The NOIP’s decision could:

• Reject the application entirely.
• Approve the application with limitations (e.g., restricted goods or services).
• Uphold the application if the opposition lacks sufficient grounds.

If either party disagrees with the NOIP’s decision, the matter can escalate to administrative appeals or court proceedings.

Common Challenges for Foreign Businesses

1. Language Barriers and Legal Representation

All opposition documents must be submitted in Vietnamese. For foreign businesses unfamiliar with local legal practices, hiring experienced Vietnamese IP attorneys is essential. These experts ensure accurate translations and compliance with procedural requirements.

2. Bad-Faith Filings in Vietnam

Bad-faith trademark applications are a persistent issue. Opportunists may try to register trademarks identical or similar to well-known foreign brands. While Vietnam’s laws provide mechanisms to combat such filings, opposing them effectively requires strong evidence and legal expertise.

Practical Advice for Foreign Businesses

1. Monitor Trademark Publications

Foreign businesses should regularly monitor the Industrial Property Official Gazette to identify potentially conflicting applications early.

2. Act Decisively

Don’t wait for issues to escalate. Filing a timely opposition strengthens your position and reduces the risk of lengthy disputes.

3. Partner with Local Experts

Vietnam’s trademark system can be complex. Collaborating with local IP attorneys ensures you navigate the opposition process smoothly.

4. Prepare Strong Evidence

Evidence is the cornerstone of a successful opposition. Gather documentation, including:

• Trademark certificates.
• Proof of brand recognition (e.g., advertisements, sales data).
• Evidence of bad faith (e.g., previous similar applications by the same applicant).

Why Trademark Opposition in Vietnam Matters to Your Brand?

Think about trademark being more than just a name or logo what differentiate your business recogniztion brand from others.  Losing control of it can have far-reaching consequences, from customer confusion to financial losses. Through trademark opposition in Vietnam, foreign businesses gain a vital tool to:

• Protect their reputation.
• Prevent misuse of their intellectual property.
• Secure their market presence in Vietnam.

Frequently Asked Questions (FAQs)

Q1: Can I oppose a trademark if my own mark is unregistered in Vietnam?

Yes, but you’ll need to prove your mark is well-known or previously used in Vietnam.

Q2: How much does it cost to file a trademark opposition?

It all depends on many factors hence it is important to const with IP lawyers in Vietnam to estimate costs.

Q3: What happens if I miss the opposition deadline?

You can still submit observations, but these carry less procedural weight than a formal opposition.

Q4: Can I appeal the NOIP’s decision?

Yes, you can appeal administratively or escalate the matter to court if necessary.

Q5: How long does the opposition process take?

The timeline varies but typically ranges from several months to over a year, depending on the case’s complexity.

Looking Ahead: Protect Your Business Legacy Today

The Vietnamese market is ripe with opportunity, but safeguarding your intellectual property requires vigilance and action.

The trademark opposition process in Vietnam provides a powerful mechanism to protect your brand from infringement and misuse.

By understanding the system, acting promptly, and collaborating with local experts, you can ensure your business remains secure in this promising market.

Source ANT Lawyers: Trademark Opposition in Vietnam: 10 Critical Facts Every Foreign Business Must Know to Protect Your Brand

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The Brief Guide to Anti-Dumping Taxes: Safeguarding Vietnam’s Industries

The Vietnam Law on Export and Import Duties and Law on Foreign Trade Management set forth the regulations on foreign trade management measures including anti-dumping taxes, to regulate and foster a healthy environment for international trade while protecting domestic industries, aimed to ensure that Vietnam’s economic interests are safeguarded, and the country’s trade policies are aligned with its development goals and international commitments.

Such laws further foster a transparent, equal, and simplified administrative procedure, ensuring the legitimate rights and interests of the State, traders from all economic sectors, and promoting domestic production and export while managing import activities in line with the country’s integration into the global economy.

Understanding Anti-Dumping Taxes

In the intricate weave of global trade, the concept of anti-dumping taxes emerges as a crucial protective measure for domestic industries against unfair foreign competition. These taxes are levied on imported goods sold at a lower price in the domestic market than their normal value, often undermining local businesses that cannot compete on pricing due to higher production costs.

When Do Anti-Dumping Taxes Apply?

Anti-dumping taxes are applied under two primary conditions:
1. Imported goods are sold at a price lower than their normal value in Vietnam, substantially undercutting similar local products.
2. The act of dumping causes or threatens to cause significant harm to the domestic manufacturing sector or impedes the development of a domestic industry.

Key Principles of Anti-Dumping Taxes

The application of anti-dumping taxes adheres to several principles, ensuring the protection measures are fair, transparent, and cause minimal disruption to the broader economic and social interests of Vietnam.

These principles include:

-Necessity and reasonableness, ensuring taxes are imposed only to the extent necessary to protect local industries.

-A thorough investigation, where decisions are based on factual findings, adhering to legal procedures.

-Targeted application, ensuring the measures are directed at the root cause of the problem.

-Consideration of broader economic and social interests, ensuring the measures do not adversely affect the national economy or societal welfare.

Duration of Anti-Dumping Taxes

Typically, anti-dumping taxes are not indefinite. The standard application period is up to five years from the date the decision to impose them takes effect. However, this period can be extended if necessary, ensuring that domestic industries remain protected as long as they are vulnerable to the effects of dumping.

Why Are Anti-Dumping Taxes Vital?

Anti-dumping taxes are instrumental in protecting domestic industries from the adverse effects of dumping. Without these taxes, foreign companies could flood the market with low-priced goods, leading to job losses and potentially the collapse of entire sectors of the domestic economy. By leveling the playing field, these taxes allow local businesses to compete based on quality, innovation, and efficiency.

Anti-dumping taxes play a critical role in Vietnam’s efforts to protect its industries from unfair foreign practices. Understanding when and how these taxes are applied, their principles, and their importance can help stakeholders navigate the complexities of global trade while safeguarding local businesses.

The importance of anti-dumping taxes cannot be overstated in the context of Vietnam’s rapidly integrating economy. As the country opens its markets to the world, the influx of foreign goods presents both opportunities and challenges. Anti-dumping taxes emerge as a crucial tool in this dynamic landscape, serving as a bulwark against the potential adverse impacts of global trade dynamics. By implementing these taxes, Vietnam not only protects its domestic industries from unfair competition but also ensures the longevity and sustainability of its economic growth.

Moreover, the strategic application of anti-dumping taxes underscores Vietnam’s commitment to fair trade practices. It signals to international partners that while the country welcomes global trade, it does so with the caveat that such trade must not come at the expense of its economic sovereignty or the viability of its industries. This balance between openness and protectionism is vital for fostering an environment where domestic industries can thrive alongside their international counterparts, contributing to a more robust and diverse economic landscape.

In essence, anti-dumping taxes are more than just a protective measure; they are a testament to Vietnam’s pragmatic approach to global integration. They ensure that the country’s journey towards economic openness does not undermine its industrial base, thereby securing a stable and prosperous future for its economy and its people.

Source ANT Lawyers: The Brief Guide to Anti-Dumping Taxes: Safeguarding Vietnam’s Industries

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