10 questions to ask before setting-up company in Vietnam

1. 10 Questions to Ask Before Setting-up Company
in Vietnam
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?
The simplest form is to set-up a management consulting company which does not
require special conditions. If you wish to set-up a trading company in Vietnam, then it
will get more sophisticated withinvestment conditions. Other business requires
other investment conditions.
2. What should I name the business in Vietnam?
The company in Vietnam has to have Vietnamese name, name in English. The
company could also have abbreviated name.
3. Where should I register the address of the business in Vietnam?
Not every address could be used to register a company. The apartment you are living
in can not be used to register the address. 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.

2. 4. What is the legal structure of the company?
Depending on the number of people contributing capital, you could set-up one
member limited liability company or two ore 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 awork 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.

3. For 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.
8. Whom will be granting the investment license in Vietnam?
The provincial Department of Planning and Investment (DPI) will be granting the
Investment License in Vietnam. However, depending on the type, scale, and whether
or not conditions are required, other State agencies might be consulted. For the case of
trading company, ministry of trade and commerce, ministry of finance, provincial
people’s committee will be reviewing the 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 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 for the previous
year. Other reports are required to be submitted at other State agencies.

4. At ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City,
we are always able to assist clients in licensing and post-licensing matters to help
clients with all questions and services in setting up and maintaining the company in
Vietnam. We could be reached at email:ant@antlawyers.vn or office tel: +848
35202779.