Vietnam is one of the countries located in Southeast Asia that has a very good location. Its economy is well developed, especially its trade and tourism sectors. The local government has ensured successful reforms that have provided opportunities for business growth and attracting foreign investments. If you are among interested businessmen, starting your business here is possible in one of the following registration forms.
Major Forms of Legal and Business Presence
If you consider an opportunity of establishing a business presence in Vietnam, this can be arranged in one of these forms:
- Limited Liability Company – corporate entity where the financial obligations of its members are limited to the payment of their contributions to this entity only. The enterprise is legally separated from its shareholders. The entity may be established by one person only provided that the maximum number of its participants should not exceed 50. There are no capital requirements for this type of entity. But, at least one resident director is required for it.
- Joint-stock Company – a legal entity that may freely offer its shares to the general public. The minimum number of shareholders is 3 in this case. Their liability is also restricted to the amounts invested only. The amount of capital may vary depending on the industry where an entity is going to operate.
- Partnership – an option of doing business where two or more partners bear unlimited liability over the results of the business cooperation.
- Branch – an option suitable for doing the same types of business activities as abroad. Registration is required in this case.
- Representative Office – an option for doing business that can be suitable for foreign entities that intend to carry out the investigation of local markets and promotion of their products only. The representative office should be registered.
Registration Requirements and Steps
If you intend to open a company in Vietnam, the process may cover the following preliminary registration steps:
- Defining business priorities you intend to realize through a Vietnamese entity.
- Choosing and verifying a business name for a future enterprise.
- Selecting officials for a future company.
- Arranging a future registered address for a Vietnamese enterprise.
- Drafting statutory and registration documents.
- Getting an Investment Registration Certificate required for foreign investors.
- Submitting the entire package of documents to the state registrar.
- Registration for tax and social security purposes.
- Opening a corporate bank account.
- Obtaining licenses and additional permits that may be required for certain types of regulated business activities.
Each registration case may vary depending on the background of the business case. Contact Prifinance specialists for developing a registration plan suitable for your business objectives.
Legal and Regulatory Framework
The local legal framework may be considered as rather favorable for foreign investments. Obtaining documents required for the legalization of foreign investments is generally easy and straightforward. A foreign businessman should also have a legal representative (local director) in Vietnam.
There are no formal capital requirements for establishing a company in Vietnam, except for specific cases, like banking or financial institutions. But, in most cases, informally it is required to pay up around USD 10,000 for a foreign investor. Different requirements for incorporating a company are established in these sectors:
- Fin-tech and Finance/li>
Principal legal acts in the area of starting and doing business locally are the Vietnam Commercial Law, the Law on Enterprises, and the Law on Investment. Major state authorities foreign investors may deal with while doing business in Vietnam are the Department of Planning and Investment and the State Securities Commission of Vietnam.
Tax System of Vietnam
If you wish to set up a company in Vietnam, this opportunity should be evaluated along with the following tax highlights attributed to the jurisdiction:
- Corporate income tax rate – 20%
- Personal income tax rates – a progressive scale with rates up to 35% is applied
- Value-added tax rate – 10%
- Withholding tax rates – (i) dividends – 0% (ii) interests and royalties – rates may vary depending on the operations from which this income has been obtained
- Capital gains tax – rates may vary depending on the types of operations
Advantages of the Jurisdiction
If you wish to establish a company in Vietnam, the following advantages of the jurisdiction may become available to you:
- liberalized conditions for making investments
- availability of benefits provided by the WTO
- opportunity to set up a company in Vietnam by submitting electronic filings
- low employment-related and rental costs
- availability of lots of double-tax and investment treaties
- developed infrastructure supply chains with China
How Prifinance Specialists May Help You
We offer prompt company registration and bank account opening services in Vietnam and worldwide. New registration and ready-made options. Call the Prifinance Company: ☎ +372-602-65-11: 24/7 customer support.