Vietnam is one of the fastest-growing economies in the world. The low cost of living and highly qualified population make it an ideal location for foreign companies who are looking to branch out and invest. However, expanding internationally has its disadvantages as well. Not knowing the local laws and regulations makes it a thousand times harder to open a company overseas.
What Is The Process Of Setting Up A Business By A Foreigner In Vietnam?
What is the process of setting up a business by a foreigner in Vietnam? Vietnam government passed the new law on Investment 2020.
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What is the process of setting up a business by a foreigner in Vietnam? Vietnam government passed the new law on Investment 2020
# REQUIREMENTS ON FOREIGN INVESTMENT NEED
There is no requirements on foreign investment amount and registered capital in Vietnam. But registered capital can not less than 30% of total investment amount. The registered capital of encouraged/ large investment project can be reduced to 20%.
# TYPES COMPANY IN VIETNAM
How many types of business ownership in vietnam: Structure Foreign investors (company/ individual) can adopt one among following three structures when setting up company/ factory in Vietnam
1. Direct investment by foreign company / individual; |
2. Indirect Investment through one holding company (single holding );
3. Indirect investment through two holding companies (double holding ).
The 2nd and/or 3rd structure is widely used. There are some advantages through holding company:
1. Unlimited deferred offshore profits which can be used for re-investment;
2. Limited liability on overseas lawsuits (civil and criminal ), and financial liabilities against parent company.
The disadvantages of the single holding structure will occur when selling foreign assets, the parent company will be taxed for the profits. The parent company/individual will be exposed to unpredictable foreign risks and faces double-taxation problems. Therefore, the third structure - double holding is recommended.
# STEP BY STEP STAR A COMPANY IN VIETNAM
1. Setting up offshore holding company;
2. Collecting holding company documents;
3. Documents translation/ embassy notarization;
4. Checking proposed Vietnam company name;
5. Prepare the M&A and application form;
6. Evaluation of investment project by related authorities;
7. Issuance of the enterprise registration certificate;
8. Publish in newspaper gazette;
9. Seal registration, open bank account;
10. Tax, customs, and environmental protection registration.
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