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.
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 or 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.
ANT Lawyers is a law firm in Vietnam, recognized by Legal500,
IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm
network covering more than 150 jurisdictions. The firm provides a range of
legal services to multinational and domestic clients. For advice or services
request, please contact us via email ant@antlawyers.vn, or call us +84 24 730
86 529.
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