Vietnam Company Formation
Vietnam is an increasingly popular jurisdiction for company formation, especially for non-residents. Its growing economy, strategic location, and relatively low operating costs make it an attractive option. While navigating regulations can be complex, the potential for growth and access to the ASEAN market are significant advantages.
There are dozens of free economic zones.
- Time of Vietnam company formation takes 2 and 3 months.
- Popular company type:
- Limited Liability Company (LLC)
Vietnam Company Formation Main Characteristics and the basic rules of Company registration in Vietnam
Vietnam is rapidly emerging as a dynamic and attractive destination for foreign investment. Its growing economy, strategic location, and increasingly business-friendly policies make Vietnam company formation a compelling option for entrepreneurs and businesses looking to expand into Southeast Asia. This guide provides a comprehensive overview of the process, focusing on the benefits, advantages, requirements, procedures, and timelines for non-residents.
A Comprehensive Guide for Non-Residents to Register a Company in Vietnam
Why Choose Vietnam for Company Formation? Benefits and Advantages for Non-Residents:
- Strong Economic Growth: Vietnam boasts consistent and impressive economic growth, offering a stable and promising market for businesses.
- Strategic Location: Situated in the heart of Southeast Asia, Vietnam provides easy access to regional markets and global supply chains.
- Competitive Labor Costs: Compared to other countries in the region, Vietnam offers a competitive labor market, reducing operational expenses.
- Government Incentives: The Vietnamese government actively encourages foreign investment through various incentives, including tax breaks and preferential treatment in certain sectors.
- Growing Consumer Market: Vietnam’s young and increasingly affluent population presents a significant consumer market for a wide range of products and services.
- Simplified Regulations: While navigating the legal landscape can be complex, the government is actively working to simplify regulations and improve the ease of doing business.
- Access to Free Trade Agreements: Vietnam is a member of numerous free trade agreements, providing access to preferential trade terms with key global markets.
Types of Companies for Non-Residents in Vietnam:
Non-residents have several options when considering Vietnam company formation. The most common types include:
- Limited Liability Company (LLC): This is the most popular choice for foreign investors. An LLC can be 100% foreign-owned and offers limited liability protection to its members.
- One-Member LLC: Owned by a single individual or organization.
- Multi-Member LLC: Owned by two or more individuals or organizations.
- Joint Stock Company (JSC): Similar to a corporation, a JSC can issue shares to raise capital. It’s suitable for larger businesses with multiple shareholders.
- Representative Office (RO): This is not a separate legal entity but an extension of the foreign company. It can conduct market research, promote the parent company’s products, and act as a liaison office. However, it cannot engage in direct profit-generating activities.
- Branch Office: A branch office is a dependent unit of the foreign company and can conduct business activities similar to the parent company.
Requirements for Vietnam Company Formation:
The specific requirements for Vietnam company formation vary depending on the type of company chosen. However, some common requirements include:
- Business Registration Certificate (BRC): This is the primary license that allows the company to operate legally in Vietnam.
- Investment Registration Certificate (IRC): Required for foreign-invested companies, this certificate outlines the investment project’s details.
- Charter Capital: The minimum charter capital requirement varies depending on the industry and business activities.
- Legal Representative: The company must appoint a legal representative who is responsible for the company’s operations and compliance.
- Registered Office Address: The company must have a registered office address in Vietnam.
- Bank Account: A corporate bank account must be opened in Vietnam.
- Tax Registration: The company must register with the tax authorities and obtain a tax identification number.
Procedure for Vietnam Company Formation:
The Vietnam company formation process typically involves the following steps:
1. Market Research and Business Planning: Conduct thorough market research and develop a comprehensive business plan.
2. Choosing the Right Company Structure: Select the most appropriate company structure based on your business objectives and investment strategy.
3. Preparing the Application Documents: Gather and prepare all the necessary documents, including
the application forms, articles of association, and proof of legal status of the investor.
4. Submitting the Application: Submit the application documents to the relevant licensing authority, typically the Department of Planning and Investment (DPI).
5. Obtaining the Investment Registration Certificate (IRC): Once approved, the DPI will issue the IRC.
6. Obtaining the Business Registration Certificate (BRC): After receiving the IRC, apply for the BRC.
7. Post-Registration Procedures: Complete post-registration procedures, including tax registration, opening a bank account, and contributing charter capital.
8. Compliance and Reporting: Ensure ongoing compliance with Vietnamese laws and regulations, including tax reporting and labor laws.
Timeframe for Vietnam Company Formation:
The timeframe for Vietnam company formation can vary depending on the complexity of the project and the efficiency of the licensing authorities. Generally, the process can take anywhere from 1 to 3 months from the initial application to the issuance of the BRC. This timeframe can be influenced by factors such as the industry sector, the completeness of the application documents, and the responsiveness of the relevant government agencies.
How Our Professionals Can Help You:
Navigating the complexities of Vietnam company formation can be challenging for non-residents. Our team of experienced professionals can provide comprehensive support throughout the entire process, including:
- Consultation and Business Planning: We can help you develop a robust business plan and choose the most suitable company structure for your needs.
- Document Preparation: We can assist you in preparing all the necessary documents accurately and efficiently, ensuring compliance with Vietnamese regulations.
- Application Submission and Follow-up: We can submit your application to the relevant authorities and follow up on its progress, minimizing delays.
- Legal and Tax Advice: We can provide expert legal and tax advice to ensure your business operates in compliance with Vietnamese laws.
- Post-Registration Support: We can assist you with post-registration procedures, such as opening a bank account and registering for taxes.
- Ongoing Compliance Services: We can provide ongoing compliance services to help you stay up-to-date with Vietnamese regulations and avoid penalties.
By leveraging our expertise and local knowledge, you can streamline the Vietnam company formation process, minimize risks, and focus on building a successful business in this dynamic market. We understand the nuances of the Vietnamese business environment and are committed to providing tailored solutions to meet your specific needs. Contact us today to learn more about how we can help you achieve your business goals in Vietnam. We can guide you through the intricacies of foreign investment laws, ensuring a smooth and efficient entry into the Vietnamese market. Our services extend beyond mere registration; we offer comprehensive support to help you establish a strong foundation for long-term success in Vietnam. From market entry strategy to ongoing operational support, we are your trusted partner in navigating the Vietnamese business landscape.
FAQ on Taxation in Vietnam
1. What is the corporate tax rate in Vietnam?
The standard corporate tax rate in Vietnam is 20%. Certain industries, such as oil and gas, may be subject to different rates ranging from 32% to 50%. Companies that qualify as small businesses can benefit from lower rates of 15% or 17% for the first 4 billion VND in taxable income.
2. How is income tax structured for individuals in Vietnam?
Individual income tax in Vietnam is based on a progressive tax rate system, with rates ranging from 5% to 35%. Taxable income includes salary, bonuses, and other forms of compensation. Residents are taxed on worldwide income, while non-residents are taxed only on income sourced in Vietnam.
3. What is the VAT rate in Vietnam?
The standard VAT rate in Vietnam is 10%. Certain goods and services may be subject to reduced rates of 5% or exemptions. It’s important to register for VAT if your company’s annual turnover exceeds 1 billion VND.
4. How are dividends taxed in Vietnam?
Dividends paid to both residents and non-residents are subject to a withholding tax of 5%. This tax is applicable to the gross amount of dividends distributed. For non-residents, tax treaties may reduce this rate.
5. What other taxes are applicable in Vietnam?
In addition to the above, businesses in Vietnam may encounter various other taxes, such as property tax, environmental tax, and excise tax on specific goods (e.g., tobacco, alcohol). Tax obligations depend on the business type and operations conducted in the country.
FAQ: Company Registration in Vietnam for Non-Residents
What are the requirements for non-residents to start a company in Vietnam?
Non-residents looking to start a company in Vietnam must first obtain an investment certificate from the Vietnamese government. They will need to submit the required documents, including a notarized passport, a corporate charter, and a business plan. Additionally, depending on the type of business, specific licenses may be required, and it’s advisable to have a local legal expert to navigate the process.
Can a non-resident own 100% of a company in Vietnam?
Yes, non-residents can own 100% of a company in Vietnam in certain sectors. However, specific regulations restrict full foreign ownership in industries such as telecommunications or publishing. It’s essential to check the Foreign Investment Law and understand sector-specific limitations before proceeding.
What are the common company structures available for non-residents in Vietnam?
The most common company structures for non-residents in Vietnam are Limited Liability Companies (LLC) and Joint-Stock Companies (JSC). An LLC is generally more straightforward to establish and manage, making it a popular choice for small businesses, while a JSC is often suitable for businesses looking to raise capital through share issuance.
How long does it take to register a company in Vietnam for non-residents?
The company registration process for non-residents in Vietnam typically takes between 30 to 60 days. This timeline is dependent on the completeness of the submitted documents and the specific province where the business will operate. Engaging local experts can help expedite the process and ensure compliance with local regulations.
What are the costs associated with company formation in Vietnam for non-residents?
The costs for non-residents to establish a company in Vietnam can vary widely depending on factors such as company type, business location, and specific services required. Generally, budget for registration fees, legal service costs, and initial operational expenses. It’s advisable to seek a detailed quote from legal consultants familiar with the Vietnamese market.
Are there tax benefits for foreign-owned companies in Vietnam?
Yes, there are several tax incentives for foreign-owned companies in Vietnam, particularly in prioritized sectors or regions. Tax benefits may include reduced corporate income tax rates, exemptions for the first few years of operation, and incentives for technology transfer or environmentally friendly practices. Consulting with a tax advisor knowledgeable in Vietnamese tax law can provide tailored advice.
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This publication is provided for information purposes only. This info should not be treated as a substitute for a tax or legal consultation or legislation. You should not act on the basis of the information contained in this publication without having obtained individual advice from the professional expert.
BRIS GROUP does not assume responsibility for any damage resulting from decisions made by the reader on the basis of this publication.
About Vietnam
Capital: Hanoi
Region: Southeast Asia on the eastern edge of the peninsula known as Indochina. Its neighbors include China to the north and Laos and Cambodia to the west.
Language: Vietnamese
Currency: Vietnamese dong (VND)
Time Zone: GMT+7
Dial Code: +84
Abbreviations: VT
Helping Your Company Thrive in Vietnam With us, starting and running a business in Vietnam will be easy and efficient!
- Full support of the company’s registration in Vietnam: from the preparation of documents to their submission.
- Remote registration: all processes are online, wherever you are.
- Secretary and Treasurer: we can take on these important roles.
- Nominal directors and shareholders: we will ensure the confidentiality of your information.
- Help in opening a bank account: we will simplify this complex process.
- Registration for taxes, VAT and EORI: ensure all requirements are met.
- Website development: we will create a professional online representation for your business.
- Logo creation: we will design a unique and memorable logo for your brand.
- Full administrative support of the company: we will take over routine tasks.
- Mailing address organization: we provide a reliable mailing address for your business.
- Organization of the virtual office: we will ensure the professional image of your company.
- Telephone answering service: we will answer calls on behalf of your company.
- Accounting, audit and reporting: ensure accurate and timely accounting.
- Preparing and filing a VAT declaration: let’s save you the trouble.
- Interaction with local authorities: take over communication with state institutions.
- Trademark registration: protect your brand.
- More Emphasis on Customer Input.
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