FORMS OF ENTERPRISES
The three most common forms of legal entities in Vietnam are:
- Limited liability company
- Joint-stock company
- Incorporated partnership
Other forms of business in Vietnam are:
- Foreign representative office
- Foreign branch office
- Business Cooperation Contract
- Representative office
The list of required business licenses that a foreign-invested company shall be granted:
- Investment registration certificate (for foreign investors to invest in Vietnam directly)
- Enterprise registration certificate (for doing business in line with local business laws)
- Business license (for trading activities)
- Registration website for providing e-commerce service
- Other permits depend on the actual operation (Regarding environmental, fire protection, conditional industries)
TAXES AND INCENTIVES
Typical taxes:
- Value-added tax
- Corporate income tax
- Personal income tax
- Foreign Contractor Tax
- Capital Assignment Profits Tax
- Natural Resources Tax
- Property Taxes
- Environment Protection Tax
- Import and Export Duties
- Social, Health and Unemployment Insurance Contributions
- Tax Audits and Penalties
- Other Taxes
Typical rates:
| TAX | ITEMS | RATES | REMARK |
|---|---|---|---|
| CIT | standard | 20% | 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 | |
| PIT | Tax Resident (183 days) | 5 – 35% | 50% discount in economic zone |
| Compulsory insurances | On Employer | 21,5% | On the actual or standard salary |
| Compulsory insurances | On Employee | 10,5% | On the actual or standard salary |
| Special Sales Tax | / | 0 – 75 % | Cigarettes/beer/karaoke/casinos.. etc. |
| Social Security | / | 10.5 / 22% | Employee / 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 billion | 1 million | Based on registered capital / year |
| 2-5 billion | 1.5 million | ||
| 5-10 billion | 2 million | ||
| ≧ 10 billion | 3 million | ||
REQUIRED PAPERS FOR COMPANY REGISTRATION
List of legal requirements
- List of members, ID Cards/ Passports of the members who are individuals, incorporation certificate of members who are entities
- Bank balance certificate/ confirmation for financial ability
- Name of company in Vietnam (English, Vietnamese, Abbreviations)
- Lawful leasing contract of the office in Vietnam
- Business segment, forms of enterprises
- Passports of the chairman, experience profiles of the Investors or Board of Directors in regard to the business segment
- The general process of business operation in Vietnam, including key activities, market, labor, asset, revenue,…
- Investment capital, percentage of shares of the members, certificates of the 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 headquarters location and rental agreements
- Required papers and info for business establishment
- Expenses prior to establishment
- Total budget and estimated timelines
COMPANY REGISTRATION PROCEDURES
- Register for investment project at Department of Planning and Investment
- Register for the establishment of enterprise at the Department of Planning and Investment
- Register for a business license in Ecommerce at the Department of Industry and Trade
INITIAL SETTING UP PROCEDURES
- Taxation: Conduct procedures for the initial tax registration – Registering and conducting procedures for VAT Invoice
- Customs: Conduct procedures for the initial customs registration
- Registering and conducting procedures for electronic declaration
- Publishing the announcement of enterprise establishment in central or local newspapers
- Registering to carve seal at the Public Security Service
- Opening capital account, payment bank account and registration for tax procedures. Supporting for paying up capital procedures
- Capital contribution according to the ERC and IRC
Read more:
- Investment in Vietnam: Market entry procedures
- Investment in Vietnam: Restructuring – Acquiring and Selling a company
- Investment in Vietnam: New Laws and Regulations
- Investment in Vietnam: Managing the required compliances for a company
- Investment in Vietnam: Managing the required compliances for an foreign employee
