In recent years, the procedures for foreigners to invest or start businesses in Vietnam have been greatly simplified. For foreign investors and real estate companies, doing business in Vietnam is now fast and easy.
For foreigners, registering a new company in Vietnam can create value in many ways. It is possible to conduct foreign business in Vietnam, even encouraged by the Vietnamese government, although the law is complicated and the process may be difficult.
“Registration of a company in Vietnam is a simple process, but there are certain rules for companies with foreign participation. Requirements for setting up a company in Vietnam may relate to foreign ownership restrictions and minimum capital requirements”, Sophie Dao, Partner at GBS, an investment consulting firm in Vietnam told Vietnam Insider.
You also need to ensure that all foreign employees have the necessary permits to work in Vietnam.
The following procedure details the process of registering a foreign limited liability company in Vietnam. When registering a foreign company in Vietnam, an investment registration certificate is required. Before the establishment of a commercial organization, foreign investors must have an investment project and complete the management procedures for the issuance of an investment registration certificate (“IRC”).
Like foreign limited liability companies, Vietnamese joint ventures will have to i) appoint a legal resident representative ii) open a capital account with a local bank for capital investment and future transfers of profits abroad, and iii) obtain foreign investment permission. certificate (FIC) required by the Vietnamese government in order for foreigners to invest in Vietnam. To complete the registration of an LLC with foreign capital, it will be necessary to i) open a capital account with a local bank, required for capital investment and future transfers of profits abroad, and ii) obtain permission to exchange an investment certificate (FIC) required by the Vietnamese government to allow foreigners to invest in Vietnam …
Related: Here’s how to set-up a foreign invested company in Vietnam
Domestic investors and foreign investors may establish a limited liability company, joint stock company, partnership or private enterprise with 100% capital in accordance with the provisions of the Commercial Law and relevant laws. Companies established in Vietnam with 100% foreign investment capital can cooperate with each other and with foreign investors to create new companies with 100% foreign investment capital. Except for some conditional business areas, foreign investors do not have a fixed minimum capital for setting up companies in Vietnam.
In most cases, foreign investors operating in Vietnam can own 100% foreign ownership of the registered capital of a company based in Vietnam. On the other hand, indirect foreign investment means buying shares in a company in Vietnam. Indirect investing gives you the ability to run a business depending on an agreement between you and a Vietnamese company.
Foreigners are allowed to own and operate their business in Vietnam through indirect or foreign direct investment. In accordance with Vietnamese trade law, foreign commercial organizations can also establish their presence in Vietnam through a branch or representative office. The Vietnam Trade Law stipulates that foreign companies can open representative offices in Vietnam, provided they do business abroad for at least 1 year.
A representative office in Vietnam can act on behalf of a foreign parent company. Distributors cannot generate income locally, but can perform tasks that support the parent company.
The funds must be deposited in a Vietnamese bank account, and you can start using it for business expenses after completing the registration and opening a local bank account.
The specific tax rate depends on the service, and your company will pay the government directly on behalf of the foreign contractor. The cost of registering a company depends on the specific type of business you open in Vietnam. The total cost may vary, but for foreign entrepreneurs looking for a new software development company, suppose you have to bear up to $5,000 in commissions with a minimum capital cost of $10,000.
Foreign investors will be more interested in developing business in Vietnam in the form of a joint venture as a 100% foreign company. No, the procedure for registering a company in Vietnam is the same as that of a foreign company. Any enterprise must be registered as a company in order to legally exist in Vietnam.
Foreign investors will be more interested in developing business in Vietnam in the form of a joint venture as a 100% foreign company. No, the procedure for registering a company in Vietnam is the same as that of a foreign company. Any enterprise must be registered as a company in order to legally exist in Vietnam.
Also read: Register your company, bank account in Vietnam as foreigner even without a visit
All commercial entities with foreign investment must have their annual financial statements audited by an independent auditor based in Vietnam. Banks, non-bank credit institutions and branches of foreign banks are required to change audit firms after five consecutive years. In addition, enterprises and organizations with foreign investment registered and operating in Vietnam that report in foreign currency must also prepare an additional set of financial statements translated into Dong for submission to the authorities. Foreign investors should contact a trust company for more detailed advice on what to present to them about the type of business they choose to invest in Vietnam.
According to the United Nations PCPC Interim Product Classification System, the service industries in which foreign investors can invest in Vietnam are divided into 12 sectors, including business services, business information, construction and related engineering services, distribution services; Educational services; Environmental services; Financial services; Medical and social services; Travel services and related services; Recreational, cultural and sports services; Transport service; Other services.
So far, barriers have been removed gradually and many sectors have been fully open, which means that when foreign investors invest in Vietnam, there is no need to match the sector’s conditions. The benefits of signing and joining these free trade agreements are that the economy becomes more open, which removes barriers to businesses and traders, and, most importantly, the ability to raise capital from foreign investors coming to Vietnam.
In nearly 30 years of attracting foreign direct investment, foreign direct investment (FDI) has played a significant role in economic and social development.
For the 100% foreign investment type, there were only 854 new companies in 2000, but the number of companies increased to 7,543 in 2013 (83% of all FDI companies), which is about 8.8 times that of 2000. As of now (December 2016), Vietnam has 65 countries and regions with investment projects.
The data showed, South Korea ranks first with a total amount of newly registered and additional capital investment of US$5.58 billion, accounting for 34% of the total investment in Vietnam; Singapore ranks second with a newly registered capital increase of US$1.84 billion, accounting for 11.2% of the total equity; Japan ranked third with a newly registered capital increase of US$1.7 billion, accounting for 10.3% of the total investment.