What are the Requirements for Setting up a Company in Vietnam?

With the open policy and favorable investment and development conditions, the demand for foreigners to come to Vietnam for business activities is increasing. When foreign investors plan to invest in Vietnam, their first concern is whether foreigners can start a business in Vietnam? This below will summarize the requirements when establishing a company in Vietnam for foreign investors, including legal conditions and administrative procedures.

Can foreigners establish a company in Vietnam?

According to the provisions of the Investment Law 2020, Vietnam's WTO Commitments and bilateral free trade agreements between Vietnam and countries in the region and around the world, foreigners can establish businesses in Vietnam. Vietnam. Specifically:

 According to the provisions of Clause 1, Article 17 of the Law on Enterprises 2020, all organizations and individuals have the right to establish and manage businesses in Vietnam, however, the incorporation of a company is not permitted except under Section 17(2) of the Corporations Act, 2020. At the same time, according to Article 19 of the Enterprise Law 2020 and Article 3 of the Investment Law 2020, foreign individuals conducting commercial investment activities in Vietnam are considered foreign investors..

Investors have the right to conduct business investment activities in industries and occupations that are not prohibited by this Law. For conditional business investment industries and professions, investors must meet business investment conditions according to the provisions of law.

Investors may make their own decisions and be responsible for their investment and business activities in accordance with the provisions of this Law and other relevant laws; obtain and use sources of credit funds, support funds, and use land and other resources in accordance with the law. If it causes damage or risks endangering national defense and security, investors may suspend, stop or terminate investment activities.

Requirements to be met when establishing a company for foreigners in Vietnam

If a foreigner establishes a company in Vietnam, in addition to the precautions, the following conditions must be met.

• Legal citizens, with complete documents proving valid personal status, certified by the consulate.
• You will need to prove your financial and investment capabilities by providing documentation that proves your financial ability, such as bank account balances, bank statements, and fixed assets.
• According to the provisions of investment law and enterprise law of Vietnam; Committed to the WTO and bilateral free trade agreements between Vietnam and countries in the region and around the world, foreigners are allowed to establish businesses in Vietnam in most service and commercial industries. commercial. However, for conditional projects, the conditions specified by law must be fully met.

Procedures for foreigners to establish companies in Vietnam

Firstly, it is necessary to consider whether the investment project falls under the case of requiring investment policy approval under the Investment Law 2020, and if so, procedures for investment policy approval must be carried out.

Second, foreigners establishing businesses in Vietnam must carry out procedures to apply for an Investment Certificate.

Third, after being granted an Investment Registration Certificate, foreigners continue to carry out the procedures according to the provisions of law on enterprises to establish and put the enterprise into operation.

Notices when establishing a company in Vietnam

• When foreign entrepreneurs open a company in Vietnam, they can open a company with 100% foreign capital, a company with 1% - 99% foreign capital, or a joint venture with a Vietnamese enterprise to establish a company. (Refer now: Consulting on establishing a 100% foreign-owned company)
• For each investment method, type of company, industry, and business field, foreign entrepreneurs will need to fully prepare different procedures, documents, licenses, and records.
• Some professions are not allowed to do business in Vietnam, or the Vietnamese government restricts business and requires strict conditions, so foreign entrepreneurs must consider the field when opening a company.
• Foreign businessmen must comply with Vietnamese law when opening a company in Vietnam.

Is it easy to establish and operate a new business in Vietnam?

The policies for company registration and establishment in Vietnam are very simple. For example, some companies and businesses may have up to 100% foreign ownership. You can hire an unlimited number of foreigners to work for your company.

Vietnam is one of the potential destinations for foreign investment in recent years. Many organizations and individuals want to invest and start businesses in Vietnam. Among them, the type that many people are interested in is private enterprises. Establishing and running a business in Vietnam is very easy if you master the law and the market.

Some incentives of Vietnam for investors

Doing business in Vietnam brings huge benefits. We’ve summarized the key points for your reference.. The Vietnamese government sets many tax support policies for investors.

Tax incentives

Foreign-invested enterprises must pay the same taxes as Vietnamese enterprises: value-added tax, license tax, import and export tax, and corporate income tax. For foreign workers, personal income tax is calculated based on worldwide income.

First, you need to have a basic understanding of taxes in business and investment activities in Vietnam:

It should be noted that there are several tax benefits to doing business in Vietnam. New investment projects may enjoy tax incentives depending on industry, location and scale. In addition, if you carry out an expansion project, you will enjoy corporate income tax incentives if certain conditions are met.

High growth economy plus potential market

Vietnam is a dynamic emerging market with endless potential and is valued among the top in Asia. Compared to the target of 4%, this is a good result that helps stabilize prices in the domestic market.

From centralized economic development to market orientation, Vietnam's purchasing power is measured by its population of 97 million people. The country is also ranked among the 15 most populous countries in the world. Finally, Vietnam is one of the leading countries in growth and development.