Quick Tips For Foreigners To Set Up Company In Vietnam

An individual or a company created under a different legal system may register investments and carry out business operations in Vietnam. Any lawful business may accept foreign investors, but they must first comply with certain industry standards in order to register an investment. Due to concerns about national security or the state’s monopoly, there are a few regions in Vietnam where foreign investors are not permitted to conduct business.

According to Vietnamese legislation, an investor who wishes to open a business in Vietnam must get a certificate of investment registration from a licensing body. Normally, it takes 15 days to receive the Investment Registration Certificate (IRC) after obtaining the complete paperwork for an investment proposal.

Read the guide on Vietnam company registration if you wish to know more about the process of starting a business in Vietnam.

Tips for Foreigners to Set up Company in Vietnam

  • Required licenses

A foreign investor must get an investment registration certificate from an authorization agency in accordance with Vietnamese legislation before establishing a business there.

A valid dossier for an investment project must be submitted within 15 days of that date in order for the Investment Registration Certificate (IRC) to be issued. However, it is crucial to budget time for compiling the necessary paperwork, including applications, financial reports, bank statements, and personal documents. Many of these documents need to be translated into Vietnamese, apostilled, or otherwise legalized, before being submitted.

  • No minimum capital requirement

A minimum amount of capital is not required by law in Vietnam to launch a business. The public authority has the right to request the financial backer to explain the strategy that works for them in light of the proposed speculative capital, but financial backers are still required to give capital according to the timeline stated in the IRC.

If the financial backer is unable to provide adequate funding within the strict time frame, the appropriate authorities may impose fines, including denial of the IRC, or the financial backer may be required to modify the IRC to reflect their actual level of commitment to the project.

After receiving the IRC, the financial backer must apply for an Endeavor Enlistment Endorsement (IRC), which must be obtained within five days of the receipt of a valid business foundation application.

  • Compliance after licensing

Now that a company has been established in Vietnam, it can begin doing business, which includes signing contracts to formally lease space, hiring staff, and engaging in transactions for the purchase and sale of services and goods.

The documents must be signed and sealed in order to be considered legally binding.  The issue is how to obtain a seal.  Because the Public Security authority maintained the seal in the past, it was more difficult to get one created for an enterprise after it had been established.

Legislators and business professionals have talked about completely getting rid of the seal that is now imprinted on legal papers in Vietnam because the legal representative’s signature is what matters most.

The originally rigorous law governing seal issue has become more lenient over time. However, in Vietnam, the seal is still crucial to the official notice that it provides, such as the legal representative’s decision to terminate a worker’s contract or the entity’s clear consent to a transaction it enters into to hire a construction company to build a factory.

The investor may make more than one seal for use, according to the provisions of the company’s charter. Before using, altering, deleting, or changing the number of seals, the enterprise must send a notice to the business registration office where its head office is located for publication on the National Business Registration Portal.

The day the notification process is complete and the seal sample is uploaded to the National Business Registration Portal for verification is when the seal can be used.

  • Taxation

Following the initial launch of the business, the investor must be mindful of their tax duties, which are crucial in all but tax haven nations.  Vietnam, however, is not included as an exemption.

Tax declarations must be submitted by every company. Each year, the company must pay a variety of taxes and fees, including license fees (based on registered charter capital), corporate income tax (CIT), value added tax (VAT), personal income tax (PIT), and, in some cases, export and import taxes as well as tax on lands. CIT is due when the company makes a profit.

  • Submitting the reports

Foreign investors must also strictly adhere to the law’s reporting requirements for investment projects. These reports will be issued on a regular basis (monthly, quarterly, or annually), and they will cover topics such as implemented investment capital, business investment results, labor data, hired foreign workers, environmental protection reports, etc.

The company will be able to avoid unnecessary risks such as administrative sanctions, business suspension, and penalties that could negatively affect the business by complying with the fulfillment of tax payment requirements and regularly reporting to ensure timely implementation as required.