vietnam

DOING BUSINESS IN VIETNAM

DOING BUSINESS IN VIETNAM

Doing business in vietnam advise by Experts at Vietnam LLC setup ► Set up a wholly foreign-owned entity, joint venture, public limited company, branch or representative office ☏ +840907996249 or email: all@lhdfirm.com
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An Introduction to Doing Business in Vietnam 2021 – New Publication from LHD Law Firm

WHY DOING BUSINESS IN VIETNAM ?

Vietnam has many competitive advantages when it comes to being an attractive destination for foreign investment, whose booming economy offers a lot of investment opportunities. Here are reasons why you should invest in Vietnam

DOING BUSINESS IN VIETNAM

We advise and represent clients to carry out the following issues

Consulting policies, conditions, schedules and procedures with investment activities in Vietnam.

Consulting investment forms consistent with needs, aims and capabilities of our clients.

Representing clients with preparation of dossiers and documents and liaising to competent authorities for implement of procedures of investment registration and investment project evaluation the laws.

Representing clients on negotiation with their partners with regard to their needs of investment, cooperation, assignment/receipt of assignment of project.

We advise and represent clients to carry out the following issues

  1. Consulting on establishing enterprises including
  2. Advise for choosing the best type of business following the company’s goals and missions.
  3. Advice for business operations: consultant experts will consult on choosing, arranging business operations scientifically and in suitable way with the state law and the business’ will.
  4. Business registration certificate including: Business registration; Legal entity stamp;
  5. Tax code registration.
  6. Setting up branches and representative offices.
  7. Modifying business registration content.
  8. Business organizing, re-arranging procedures (M&A) and other related issues.

Starting a Business

There are 10 procedures to undertake when starting a business in Vietnam, making it among the most complex start-up environments in the world. What’s more, many tasks facing new corporate entities may be unfamiliar to overseas companies, making the task far more rigorous. Registration of the seal-sample at the Police Department, for example, or publically announcing the formation in a local newspaper are procedures most companies generally don’t have to complete.

Dealing with Construction Permits

It takes 110 days and 11 procedures to get permits for construction in Vietnam, once again requiring interaction with several official departments. Inspections must be carried out by the Department of Construction and the municipality, and certificates should be obtained from the Firefighters Prevention Department, the Department of Construction and the Department of Natural Resources and Environment.

Getting Electricity

Getting electrical connection is among the most rigorous tasks facing startups in Vietnam, taking 115 days to complete and costing a significant percentage of income per capita. Inspections by the local power corporation are required before completing processes with the Traffic and Transport Department and the Firefighters Prevention Department.

Registering Property

Registering property takes 57 days to complete, which is far higher than the OECD norm but around average for East Asia and Pacific. Contracts between the transferor and the transferee are signed before taxation is paid and registration for the right to use land is complete.

Getting Credit 

Vietnam is home to quite a stable credit environment, and obtaining capital is a relatively smooth process for businesses. However, the lack of a private credit bureau can make the process a little trickier for overseas firms.

Protecting Investors

Investor protection is an area in which Vietnam fails miserably. It is ranked in 169th place by the World Bank and IFC, with a weak director liability index and shareholder suits index. 

Paying Taxes 

There are a massive 32 corporate tax payments to be made each year which takes an average of 872 company hours to complete. Compared to the OECD norm of 176 and the East Asia and Pacific average of 209, taxation is one of the most burdensome processes of doing business in Vietnam.

Trading Across Borders

Given its strong manufacturing base and reliance on interconnectivity, trading across borders is a cheap endeavour. However, that isn’t to say the process is not complicated, and the stream of documentation required for both importing and exporting highlights that cross-border trade can be difficult at the best of times.  

Enforcing Contracts and Resolving Insolvency

Enforcing contracts takes 400 days to complete and 34 procedures. Resolving insolvency is a far more laborious process, taking five years on average to complete and with a low recovery rate.

Culture

The Vietnamese believe in the teachings of the early Chinese philosopher Confucius which emphasise the importance of relationships, responsibility and obligation. Vietnam is also a collectivist country and community concerns will almost always come before business or individual needs.

 

LHD Law Firm is a professional consulting firm in the fields of consultancy established business consultancy and established a private enterprise, established limited liability companies, shareholding companies established part, formed a joint venture company, established companies with 100% foreign capital of more than 1680 visitors used the strategy of our services.
We are committed to providing its clients with professional consulting services with quality and reliability with the most innovative solutions, comprehensive business issues and always uphold the tight co-ordination close and effective professional middle parts of the company, in order to maximize the strengths of the available resources of the company for the benefit of client’s.

Doing business in Viet Nam – Opportunities and Threats 2021 - Advise by LHD Law Firm

Vietnam Becomes The New Southeast Asian Tiger economy.  There are many investors around the world choosing Vietnam for their business plans. Doing Business in Vietnam still has socio-economic characteristics that create opportunities and threats for investment activities for foreigners.

Vietnam is a dynamic market in the Asia - Pacific region. Although it has only been open to business to the rest of the world for a few decades, people's cultural and entrepreneurial trends have quickly revived its economy. Doing Business in Vietnam is expanded to a variety of fields and industries. However, the characteristics of intellectual property, legal and cybersecurity in here still pose certain challenges for foreign invest

Overview of business in Viet Nam

Vietnam has risen to the top in international trade and has become a very attractive target for international investments. A young, dynamic population and an advanced qualified workforce help Vietnam form the most dynamic economic clusters.

Vietnam has a pro-investment policy. Different investment incentives and treatment rates apply to different industry groups and geographic groups. Incentives include exemption or reduction of corporate income tax for a number of years, land rent, exemption from import tax on capital goods, deferred payment of VAT, and more.

Efforts to improve the investment environment of the Vietnamese government

Investment license is valid for up to 50 years, renewable for another 50 years. The Foreign Investment Agency (fia.mpi.gov.vn) is the central licensing agency that issues licenses for a certain type of investment. With the support of investment departments in 63 provinces and cities nationwide, ready to help foreign investors. In some cases, the investment license must be approved by the Prime Minister.

Investment in Vietnam can be made directly or indirectly through the purchase of shares. The current process of equitization of State-owned enterprises in Vietnam is creating opportunities for foreign investors to participate in a number of sectors that are monopolized by the state.

 Business opportunities in Vietnam

Statistically, Vietnam is changing step by step thanks to strong economic growth, ongoing reforms and a large population of 93 million – half of whom are under 30 years old – combined to create the environment. Trade is dynamic and growing rapidly. Sales of equipment, technology and consulting and management services associated with growth in Vietnam's industrial and export sectors and implementation of major infrastructure projects continue to be a source of commercial activity. commercial.

Many industries are suitable for foreign investors

1. Construction and building materials

Construction speed in Vietnam is very large. Especially in megacities, with high density of construction of streets, houses, and infrastructure.

You can start in Vietnam selling construction and construction materials. There are many building materials that you can sell, such as cement, roofing materials and home decorations. You can also start a business in the construction services sector such as painting services, plumbing, home decor, home repairs, HVAC installation and repair, and more. This is an opportunity for investors to create a market for themselves.

 2. Agricultural Products Processing

Agriculture is gradually becoming the most important economic sector of Vietnam. Although agriculture still employs more than half of the population and the manufacturing sector accounts for only 8% of total employment, the output value of both manufacturing and services surpassed that of agriculture in the early 1990s. Some of Vietnam's key agricultural industries are coffee, paddy rice, pepper, sugar cane, etc.

Real estate tends to be heavily invested

 3. Real Estate

Another lucrative business you can start in Vietnam is selling/buying houses and structures for sale. Due to the large number of foreigners and immigrants entering Vietnam, real estate is an unfortunate business. You can buy second hand items to repair and sell. You can rent office blocks or rent a small apartment.

However, investing in real estate requires a lot of money, so real estate is an expensive business. As an investor, this is not an unreliable situation and you still have the opportunity to run a real estate business, a property manager or a real estate agent. You can pay for this service.

Land policies and laws in Vietnam do not allow foreigners to own land in their name. Therefore, if investors want to develop a plan in this field, they need to grasp the necessary legal provisions.

4. Beauty and cosmetics

According to market research firm Mintel, the cosmetic and beauty retail market in Vietnam is expected to reach $1.7 billion per year, but in 2018 this figure could reach $2.35 billion. This market is relatively small, but as most countries move into the middle income group, the growth of most beauty and body care categories will continue to expand over the next decade. This is a great opportunity for investors to look at the cohesion of this business sector. When the demand for cosmetics increases, foreign companies can use natural spices to produce and sell cosmetics in Vietnam.

5. Car business

The car business is attracting investment in Vietnam. People with travel needs need high security. According to the law, including workshops, warehouses, equipment, tools, human resources, quality management systems, fire prevention and fighting mechanisms, environmental protection, safety and hygiene requirements, labor and maintenance facilities.

Threats in doing business in Vietnam

1. Intellectual property (IP)

Intellectual property rights are territorial, which means that intellectual property rights are protected only in the country of registration. Therefore, you should consider registering your IP rights (if necessary) in all of your export markets.

According to the 2018 Global Competitiveness Report of the World Economic Forum, Vietnam ranks 77th out of 140 countries in intellectual property protection.

Vietnamese law still has many loopholes in protecting intellectual property rights

Vietnam already has a set of rules to protect intellectual property rights. However, the implementation is still not robust, so you need to take steps to protect your IP before exporting.

Trademarks, designs, patents and copyrights are basic forms of intellectual property protection under Vietnamese law and are all governed by law. Common law allows one person to protect the transfer of goods and services from another person, and to protect confidential information or trade secrets.

Firms in certain industries are encouraged to research information on IP issues relevant to them. It is necessary to take precautions early when intending to penetrate the Vietnamese market.

2. Cybersecurity

Vietnam's new cybersecurity law, effective January 1, 2019, places requirements on data location, business operations, as well as storage and verification of users' information.

The law forces companies to provide information to Vietnamese authorities upon request and to block certain content within 24 hours. Applications and detailed application instructions remain approved.

If you plan to provide services to customers in Vietnam through telecommunications networks or the Internet (e.g. social networks, search engines, online advertising, broadcasting, websites/e-commerce). computer, voice/text Internet (OTT services), cloud services, online games and online applications), you will receive legal advice on compliance with the law.

3. Natural disasters

Tropical waves can occur on the east coast, usually from May to November, although they can occur outside of this time period. As a result, rainfall and strong winds can cause flooding and disrupt travel.

You should keep an eye on approaching storms on the website of the National Center for Hydro-Meteorological Forecasting.

Natural disasters often occur in Vietnam

Localized floods, flash floods and landslides are relatively common as Vietnam's tropical climate produces large amounts of rainfall in a short time. You need to be very careful when walking in rural and mountainous areas.

4. Tax policy in Vietnam

Although Vietnam's complex tax system is being reformed, there are still 10 types of corporate taxes to be paid each year. Other taxes also include VAT and social insurance.

Through these reforms, the Government of Vietnam intends to simplify all tax calculation and declaration procedures, remove confusing tax issues, and create a favorable business environment.

The authorities also have to do a lot of work related to improving tax reporting technology such as electronic tax return.

5. Most documents are in Vietnamese

All reporting and filing procedures, including permits, must be written in Vietnamese. Documents in English or other languages must be translated into Vietnamese through certified translations at the Court of the host country. It doesn't stop there. After that, the notarized translation document must be certified by the Vietnamese embassy.

Whether you're planning to invest in Vietnam or have been doing business for a while in Vietnam, get the support you need to manage the growing economy during unexpected circumstances. It is very important to move forward.

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