Vietnam

Company Formation in Vietnam

Vietnam is ideally located to cater to the fast growing market with a large population in Asia. YourGlobalPro can assist in Vietnam for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval and Trademark Registration.

About the Country

The Socialist Republic of Vietnam (Vietnam), is the easternmost country on the Indochina Peninsula in Southeast Asia – sharing border with China to the north, Laos to the northwest, Cambodia to the southwest, Thailand across the Gulf of Thailand to the southwest, and the Philippines, Malaysia and Indonesia across the South China Sea to the east and southeast. It is one of the world’s twelve original cultivar centers, in agricultural genetic diversity. The below content will explain you in detail about the requirements for the company formation in Vietnam, know more about the process of trademark registration in Vietnam and understand the Vietnam Legal and Compliance requirements.

Vietnam

Doing Business Introduction

The Country is one of the most attractive locations for foreign investors in South East Asia on account of its low wages, favorable demographics, a growing middle class, political stability and its location. It has one of the largest and most successful manufacturing hubs in Asia. As per Doing business report of The World Bank –Vietnam ranks 82 for 2017 survey.

YourGlobalPro professionals can assist with any type of company formation in Vietnam, trademark registration in Vietnam and other recurring services for your business in Vietnam.

Incorporation - Types of Business Entities

Before starting the business, the first decisions to make is to determine what form of business entity to establish. Also, it is important to note that all investment activities in Vietnam are regulated by the Law on Enterprise (LOE). There are several types of entities that can be incorporated in Vietnam are as mentioned below:

  • Limited-liability Company
  • Joint-stock Company
  • Partnership
  • Branches
  • Representative Offices
  • Business Cooperation Contract (‘BCC’)
  • Public and Private Partnership Contracts

Time Frame for Incorporation of Company in Vietnam varies from depending on the type of entity selected and each business type has its own advantages and disadvantages. YourGlobalPro professionals estimates the time required for the process of Company formation in Vietnam to be completed is 31-36 working days.

Benefits of Registration of a Company

Vietnam is encouraging trade liberalisation, and adopting a two-track approach opening some sectors of the economy to international markets while protecting others. Below are the advantages of company formation in Vietnam:

  • Skilled workforce and low costs
  • Global reputation as a cheaper alternative to the more mature supply markets of its neighbours
  • Fast growing services sector
  • To be top ten locations in the world for offshore services
  • Agriculture is the main source of raw materials for the processing industries and a major contributor to exports
  • Government goal of becoming an industrialized country by 2020
  • Government is gradually loosening foreign investment limits
  • Reduced corporate tax rates,
  • Tax-free periods or tax reductions during the start-up phase
Land-rent reductions and import-duty exemptions

Tax Registration and Filing

In Vietnam, enterprises are subject to corporate income tax if Enterprises established under the Law on Enterprises, the Law on Investment, the Law on Credit Organizations, the Law on Insurance Business, the Law on Securities, the Law on Oil and Gas, the Trade Law and other legal entities, Public and non-public organizations, Organizations established under the Law on Cooperatives.

Corporate Income Tax Rate 20%
Capital Gains Tax Rate 20%
Branch Tax Rate 20%
Value-Added Tax (VAT) 10%
Dividends 0%
Interest 5%
Royalties 10%
Branch Remittance Tax 0%
Tax Year. Calendar Year
Quarterly Income Tax To be paid within 30 days after the last day of the quarter.
Final Income Tax Return To pay any balance of income tax due within 90 days after the end of the tax year

Double Tax Treaty

Double Tax Agreements (DTA) regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject.  Vietnam has double taxation treaties with over 50 countries.

Trademark registration

For trademark registration in Vietnam, an application needs to be made to the National Office Of Intellectual Property (NOIP). It takes approximately 18-20 months’ timeframe to complete the trademark registration process.  The Trademark Registration in Vietnam is valid ten years from the date of filing trademark and is renewable for ten years period by paying the renewal fee by the expiration date for an unlimited number of times.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration for your business in Vietnam. For assistance or advise in the matter of the trademark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Vietnam:

  • Proper Book of accounts, Minutes and Statutory registers must be maintained by all the entities.
  • Audited annual financial statements must be completed within 90 days from the end of the financial year
  • The Entities may choose a financial year of 12 months according to the Gregorian calendar and they must notify the local authorities of such year.
  • The financial statements should be filed with the applicable licensing body, Ministry of Finance, local tax authority, Department of Statistics and certain other authorities.
  • For transfer pricing, related transactions – the Transfer Pricing Document (TPD) must be in place to verify the arm’s-length prices of related-party transactions for submission to the tax authority within 30 days on receipt of a written request. Also, TPD to be updated every year to reflect the current economic circumstances.

YourGlobalPro professionals can assist you with all Company secretarial requirement to enable your business to adhere to good corporate governance practices in Vietnam.

Accounting Services

The Entities operating in Vietnam are required to comply with the Vietnam Accounting System (“VAS”) which applies the historical cost convention. Accounting records are generally required to be maintained in Vietnamese language, but this can be combined with a commonly-used foreign language, if required.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Vietnam Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

In Vietnam, the annual financial statements of all foreign-invested business entities must be audited by an independent auditing company operating in Vietnam. It has issued 26 accounting standards and 47 auditing standards which are primarily based on international standards with some local modifications

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals can provides you auditing services for your business as required.

Banking

The State Bank of Vietnam is the central bank in Vietnam regulating the Banks in the Country.  The major banks in Vietnam are ACB Asia Commercial Bank, VIETNAM EXPORT IMPORT BANK, VietinBank & the Vietnam Development Bank. All banks are stable, reliable and offer the same level of services. The accounts can be opened and maintained in multi-currency and is available for all major currencies with the Banks. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.

YourGlobalPro professional can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Vietnam.

Legal and Compliance

In Vietnam, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Vietnam legal and compliance requirement to be followed by incorporated entities:

  • All organisations and individuals producing or trading VATable goods and services in Vietnam must register for VAT and branches of an enterprise must register separately and declare VAT on their own activities.
  • Companies with Annual revenue of VND 50 billion or less) in the previous year must file VAT returns on a monthly basis by the 20 days of the subsequent month, or on a quarterly basis by the 30 days of the subsequent quarter.
  • The enterprises are free to carry out trading activities in Vietnam including directly export and import all goods. However, certain restricted goods where a special business license must be obtained from the relevant State authorities.
  • The entities having foreign-ownership must open accounts denominated in a foreign currency or the Vietnamese dong (VND) at a bank located in Vietnam and approved by the State Bank of Vietnam (SBV).
  • The entities carrying out foreign-exchange transactions, such as payments or overseas remittances, must adhere to the policies set by the SBV.
  • Foreign investors doing investment for the first time must have an investment project and carry out either registration or evaluation procedures
  • After set up of the entities the post licensing formalities need to be completed – like Registering the tax code, opening a bank account, Arranging accounting team/policy, Recruitment/register employees with relevant labor authorities

YourGlobalPro professionals facilitates all types of pre-and-post business set up requirement and assist you in Vietnam legal and compliance for carrying out smooth business in Vietnam.

HR and Employment Law and Immigration / VISA

In Vietnam, the foreigners are allowed to work on work permit. Below are some of the important points in relation to HR & employment law in Vietnam:

  • There should be written labour contract specifying the workers, wages and salaries must be set in Vietnamese dong.
  • The wages of employees are subject to minimum rates determined by the Government from time to time.
  • 8-hour working day and a 48-hour working week
  • The total overtime worked does not exceed 200 hours per year, however in exceptional circumstances, with notification to the relevant authorities the maximum overtime can be increased to 300 hours per year.
  • The maximum duration of a work permit is 24 months, which can be extended subject to certain conditions.
  • The foreign employees for more than three (3) months are required by law to obtain a work permit issued by the labour management authority and a valid visa.
  • Employer is required to apply for a work permit.
  • The work permit must be returned to the Labor Department when an employee ceases employment with the employer.
  • Work permit can be extended for a maximum duration of thirty-six months for each extension The application to file for extension must be lodged with the local Department of Labor, War Invalids and Social Affairs (DOLISA) at least thirty days prior to expiry date.

YourGlobalPro professionals can facilitate and assist with entire scope of Human Resource and Employment law including complying with immigration related matter for your foreign Employees in Vietnam.

Country Statistics

Capital Hanoi
Largest city Ho Chi Minh City
Total Area 332,698 Sq. Km.
Population 92,700,000
Density 276.03 / Sq. Km.
Currency u0111u1ed3ng (u20ab) (VND)
Government Marxistu-Leninist one-party socialist republic
Official language Vietnamese
Religion Folk or Irreligious: 73.2%
Buddhism: 12.2%
Christianity: 8.3%
Caodaism: 4.8%
Hoahaoism: 1.4%
Other religions: 0.1%
Government Offices Hours Mon to Fri - 7.30 am to 4.30 pm
Business offices Hours Mon to Fri - Start 7 am to 8.30 am - finish between 4 pm to 6 pm

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