Investment in Vietnam: Market entry procedures

WEBINAR EUROCHAM | INVESTMENT IN VIETNAM: MARKET ENTRY PROCEDURES

(Last Updated On: October 8, 2021)
Investment in Vietnam: Market entry procedures

Investment in Vietnam: Market entry procedures

FORMS OF ENTERPRISES

The three most common forms of legal entities in Vietnam are:

  1. Limited liability company
  2. Joint-stock company
  3. Incorporated partnership

Other forms of business in Vietnam are:

  1. Foreign representative office
  2. Foreign branch office
  3. Business Cooperation Contract
  4. Representative office

The list of required business licenses that a foreign-invested company shall be granted:

  1. Investment registration certificate (for foreign investors to invest in Vietnam directly).
  2. Enterprise registration certificate (for doing business in line with local business laws).
  3. Business license (for trading activities).
  4. Registration website for providing e-commerce service
  5. Other permits depending on the actual operation (Regarding environmental, fire protection, conditional industries).

TAXES AND INCENTIVES

Typical taxes:

  1. Value-added tax
  2. Corporate income tax
  3. Personal income tax
  4. Foreign Contractor Tax
  5. Capital Assignment Profits Tax
  6. Natural Resources Tax
  7. Property Taxes
  8. Environment Protection Tax
  9. Import and Export Duties
  10. Social, Health and Unemployment Insurance Contributions
  11. Tax Audits and Penalties
  12. Other Taxes

Typical rates:

TAXITEMSRATESREMARK
CITstandard20%Tax incentives for some special industries:
exempt in 04 first years and 5% in next 9 years
VAT/0%Export goods / services / Software businesses
/5%Essential goods / services
/10%All other goods / services
PITTax Resident
(183 days)
May - 3550% discount in economic zone
Compulsory insurancesOn Employer21,5%On the actual or standard salary
Compulsory insurancesOn Employee10,5%On the actual or standard salary
Special Sales Tax/0 - 75Cigarettes/beer/karaoke/casinos.. etc.
Social Security/10.5 / 22Employee / Employer
Incomes from capital investment/5%Profits from capital contributions to limited liability companies (including
single member limited liability companies)
Incomes from Transferring contributed capital/20%According to the whole income tax table.
Capital transfer earned by a non
resident
/0.10%On the total amount of money, the non
resident receives from the transfer
of capital invested in organizations and individuals in Vietnam, whether the
transfer is made in Vietnam or overseas.
Business License Tax (VND)≦ 2 billion1 millionBased on registered capital / year
2-5 billion1.5 million
5-10 billion2 million
≧ 10 billion3 million

REQUIRED PAPERS FOR COMPANY REGISTRATION

There are a list of legal requirements:

  1. List of members, ID Cards/ Passports of the members who are individuals, incorporation certificate of members who are entities
  2. Bank balance certificate/ confirmation for financial ability
  3. Name of company in Vietnam (English, Vietnamese, Abbreviations)
  4. Lawful leasing contract of the office in Vietnam
  5. Business segment, forms of enterprises
  6. Passports of the chairman, experience profiles of the Investors or Board of Directors in regard to the business segment
  7. General process of business operation in Vietnam, including key activities, market, labor, asset, revenue,…
  8. Investment capital, percentage of shares of the members, certificates of bank account balance of the members

TIPs

  • Choose a suitable form of company, register your expected brand name.
  • Allowed business scopes, HS codes, Tax incentives.
  • Lawful Headquarter location and rental agreements.
  • Required papers and info for business establishment.
  • Expenses prior to establishment.
  • Total budget and estimated timelines.

COMPANY REGISTRATION PROCEDURES

  1. Register for investment project at Department of Planning and Investment
  2. Register for establishment of enterprise at Department of Planning and Investment
  3. Register for business license in Ecommerce at Department of Industry and Trade

INITIAL SETTING UP PROCEDURES

  1. Taxation: Conduct procedures for the initial tax registration Registering and conducting procedures for VAT Invoice
  2. Customs: Conduct procedures for the initial customs registration.
  3. Registering and conducting procedures for electronic declaration.
  4. Publishing the announcement of enterprise establishment in central or local newspapers
  5. Registering to carve seal at the Public Security Service
  6. Opening capital account, payment bank account and registration for tax procedures. Supporting for paying up capital procedures
  7. Capital contribution according in the ERC and IRC

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Read more:

  1. Investment in Vietnam: Market entry procedures
  2. Investment in Vietnam: Restructuring – Acquiring and Selling a company
  3. Investment in Vietnam: New Laws and Regulations
  4. Investment in Vietnam: Managing the required compliances for a company
  5. Investment in Vietnam: Managing the required compliances for an foreign employee


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