vietnam

HOW TO START A BUSINESS IN VIETNAM AS A FOREIGNER

HOW TO START A BUSINESS IN VIETNAM AS A FOREIGNER

☑ Do you want to start a business in Vietnam? How to start a small business in Vietnam? What type of entity is best suited to you and how to overcome risks in small businesses? Discover our services with leading Vietnamese lawyers and Ho Chi Minh, Da Nang and Hanoi offices 

 

How to start a business in Vietnam as a foreigner

☉ While Vietnamese startup companies go to other countries for starting their businesses, there are also various people from many different countries, choosing different types of businesses that have successfully established their businesses in Vietnam. However, how to start a business in Vietnam as a foreigner is still a big question for many startup companies.

Language, culture and legal are the first factors should be aware when foreigners start their businesses in Vietnam. This article will help you understand some of these important factors as the answer for the question “how to start a business in vietnam as a foreigner”

 

☑ Factor 1: Learning business culture in Vietnam is the way of how to start a business in Vietnam as a foreigner

Learning business culture in Vietnam is the way of how to start a business in Vietnam as a foreigner

It can be said that business culture is the soul of an enterprise, because it influences, even dominates production activities, business decisions, internal and external relationships. Here, it is possible to understand the business culture of a business as perceptions, objectives and cultural values ​​that must be included in every activity.

Vietnam is located in the Eastern cultural region of the Southeast corner of the world; therefore, there is a typical agricultural culture that is full of characteristics of eastern culture.

-  With a businessman when he meets up with a Vietnamese partner: Let’s start the story by introducing yourself. Don't be surprised if they want to know your age. It is a way for Vietnamese people to choose their roles when they talk, due to the abundance of personal pronouns in Vietnamese.

- Gift is an extremely popular cultural expression in Vietnam. In particular, on the occasion Tet holiday of Vietnamese people, do not forget to give gifts and greeting cards to your partners and relationships here!

- Eating and drinking is an essential part of community activities and business activities in Vietnam. Dinner with local representatives or customers to help develop relationships and make your local partner

- The way Vietnamese people drinking in a party is also different. If you drink alone, it is impolite. Everyone's habit is to drink only after toasting

- During the work, the Vietnamese side often said, "we will consider", "we will answer". So if you need to decide early, it's best to send all the necessary documents before the meeting. If it is a document sent to state agencies, please write it in Vietnamese!

- At the beginning of the negotiation will always be the story which do not relate to your main discussion. Don't be impatient, that's called 'creating atmosphere'! You should not mention about your lawyer because the Vietnamese people do not want to see him when negotiating and also dislike the subject from the legal aspect.

- Sometimes Vietnamese entrepreneurs are always slow to catch business situations. It can be said that the slow attitude of rubber hours is a daily attitude in modern Vietnamese people.

☑ Factor 2: Learning laws in Vietnam is the way of how to start a business in Vietnam as a foreigner: Establishing businesses with foreign elements in Vietnam

You need to update on the Law on investment and the Law on enterprises in Vietnam when you have a plan to start a business in Vietnam as a foreigner

With the enactment of the Law on investment and the Law on enterprises 2014, Vietnam has established a legal framework to regulate investment participation and business establishment of foreign investors in Vietnam.

Thereby, it will improve the investment environment in the direction of creating a fair competitive environment while protecting national security. Based on the current law, foreign investors looking for investment opportunities in Vietnam can choose one of two options for how to start a business in Vietnam as a foreigner with foreign elements as follows:

Option 1: Request for the first investment registration certificate (whether it is a 100% foreign-invested enterprise or a joint-venture enterprise) and then carry out the procedures to apply for a Certificate of registration enterprise.

Option 2: Invest in the form of capital contribution, purchase of shares in Vietnamese companies, then participate in managing the company as agreement by the parties.

Each of the above options has certain advantages and disadvantages related to the conditions, administrative procedures and governance issues when you implement investment projects in Vietnam.

LHD Law Firm with 10 years’ experience advising foreign investors in Vietnam We will give you advice and clarify all your concerns and take care of your company license. Moreover, the LHD can help you with financial statements showing the Government of Vietnam and track your business activities and is always around to advise your business. Price: upon request all@lhdfirm.com (free quotation and legaladvise)

Client's of LHD Law Firm

TOYOTA (JAPAN), WACOAL(JAPAN), DELOITTE (GLOBAL), DLH; SHISEIDO FOS (MY), DLT (MY), YAMAZEN (JAPAN), SANKOUGIKEN (SIN), DIEMSANG (KOREA), IFO (SIN), ALTECH (MY), TRIUMPH(USA), SOMETHING HOLDING (JAPAN), JABES(UK), SPASH INTERACTIVE (SINGAPORE), YM, CORELEV (FRANCE), VIET AGO, STENCIL, SHINWON, DLT, AYOBA, E&C VINA, TYCOOND, ILLHO, VIETPOLL, BIOMIN, M&R FORWARDING, WSP VN, J. DROUP, HALFEN MOMENT, MARTIME, DAIKOAD, RICOH VN, CHEMSTATION ASIA, DEVPROSOFT, ATEA, OPTIMUM,GLOBAL, VSTENCIL, AOA, BERNOFARM, INNOBAY, IKEBANAHAT, TELESCOPE, BENJAMIN, IPS, PEER, OVERSEAS, ICEFF, SUBNET, EDULINE VN, J-TECH, INTERCOM, PFE, ABROAD INC, FLEXLINK, ZERO TO ONE, FONTIS, SUZUKA, SDGI, SEA VENTURE, SIFT, V2U, RHODES, TNSGLOBAL, TELESCOPE, HSE, SUBNET, UBTEC, CODEWORKS, LIBERO .....AND 6800 CLIENT'S FROM 68 CITY.  

Hopefully, this article will help you know thoroughly about how to start a business in Vietnam as a foreigner. The above is two factors, in our opinion, it is also the two main difficulties of foreign businesses when they start their businesses in Vietnam. However, about corporate culture, you can gradually get used to but  the law must be clear from the beginning. Therefore, if you want to be more clear about business laws when you start a business in Vietnam, you can contact with LHD Law Firm (Free Quotation and legal advise)

Any support you may need, please contact us today via
 
Email/ Google hangouts: all@lhdfirm.com 
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FAQs

What types of Vietnamese legal entities are available?hat types of Vietnamese legal entities are available?

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A foreign investor (just like a local investor) may select one of the following Vietnamese legal entities to carry out a project:

  • A limited liability company (“LLC”), in the form of either a single-member LLC (“SLLC”) or an LLC with two or more (up to a maximum of 50) members (“MLLC”).
  • A shareholding or joint stock company (“JSC”) which is a company with at least three shareholders but no maximum number of shareholders.
  • A general partnership or a limited liability partnership.
  • A private enterprise (akin to a sole proprietorship).

What are the Vietnam Corporate Income Tax (CIT) rates?

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The standard Vietnam corporate income tax (CIT) rate is 20%, though enterprises operating in the oil and gas sectors will be subject to rates between 32% and 50%;

Dividends paid by a Vietnamese company to its corporate shareholders will be completely tax exempt. Furthermore, no withholding tax will be imposed on dividends remitted to overseas corporate shareholders. For individual shareholders, the withholding tax will be 5%;

Interest payments and royalties paid to non-residents individuals or corporate entities will be subject to withholding tax of 5% and 10% respectively;

Personal income tax for residents is levied under a progressive system, ranging between 5% and 35%. However, for non-resident individuals, the tax is levied at a flat rate of 20%.

Can my company be 100% foreign-owned?

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Yes, a company in Vietnam can be 100% foreign-owned in selected sectors.

Can a foreigner open a bank account in Vietnam?

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Yes. As stated in Circular No: 23/2014/TT-NHNN and Circular No. 32/2016/TT-NHNN, a foreigner is considered eligible to open a bank account in Vietnam if they are permitted to stay in Vietnam and can provide the required documents:

The required documents to open a bank account in Vietnam may vary according to the bank, but will typically include:

  1. Valid passport with at least 6 months validity before its expiration date.
  2. One of the following valid documents with a validity of 1 year or greater, issued within the last 12 months:
    • Valid visa with a duration of 1 year or greater issued within the last 12 months
    • Temporary Resident Card (TRC)
    • Work Permit
    • Permanent Resident Card (PRC)
    • Temporary residence confirmation issued by the police

What is the process to register a company in Vietnam?

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The process to register a company involves 5 steps.

  1. Applying for an investment registration certificate (IRC).
  2. Applying for an enterprise registration certificate (ERC).
  3. Making and registering the company seal.
  4. Making a public announcement.
  5. Registering the tax code/ VAT number with the tax department.

This is the standard process to register a company to operate any type of business in Vietnam. After this, depending on the nature of the business, the entity may or may not require additional sub licenses.

7 comment at post
  1. Visitor
    Limor Yron
    03/04/2019

    Good day. I have an American passport, biz visa. Would like to open a bar restaurant in Mui Ne in a guest house. Would like to talk about legal options. Please what’s app or email +16464271429 Thank you Cam on Limor

  2. Visitor
    Mitchell Boyd
    15/05/2019

    Dear Sir/Madam, I'm planning to open a bar/hostel. I would appreciate some information if you would be so kind. Legal stand points. Many thanks, Mitchell Boyd

  3. Visitor
    Alex Lim
    27/05/2019

    Hello friends, My Vietnamese partner and I will open a dormitory business in Saigon. However, I hope someone can give me advice on paperwork, registration and legal issues. How and where do I register for business in Saigon? How long does this process take? What kinds of licenses do I need to get from the government? How can I get the license? through an agent, lawyer? How much does it take to obtain licenses and attorneys' fees to open a company? Your help will be much appreciated. :) Best regards, Alex Lim

  4. Visitor
    Loo Wei
    11/06/2019

    Dear LHD Law Firm, I am interested to establish a company in Ho Chi Minh City and would like to know more about the procedures and processes. Also, I would like to find out the duration needed for such a registration and the fee structure of LHD Law Firm to assist the setup. 1) I would like to establish a LLC in Vietnam that will be fully owned by my holding company incorporated in the British Virgin Islands. Are there any restrictions to using a holding company to establish an LLC in Vietnam? 2) I have been in the management and consultancy business in the oil and gas and petrochemicals sector and have been in the industry for over 23 years. The incorporated company will be used to provide management and advisory services to downstream and mid-stream corporations that are looking for entry into Vietnam. What are the fee structures and paid up capital requirements for such a LLC license? Is the company allowed to open and maintain a local VND currency bank account? 3) With a Vietnam LLC, what are the reporting and tax filing requirements? As there a new startup, the business will not be generating much revenue until at least 2 years later. Do the tax authorities consider taxation on expenditure as well from the first year, even for new companies that do not yet earn any profit? 4) With a fully foreign owned LLC in Vietnam, is there a requirement to appoint a Vietnam representative or employee? Can the Managing Director be a foreigner? As an investor, will that foreigner be allowed multiple entry into Vietnam under an investment pass? Is there a minimum salary expected for the local and foreign representative? 5) As the rents in Ho Chi Minh city area are quite high, is the LLC allowed to purchase its own office space to operate its business from there? 6) If an LLC is registered in Ho Chi Minh City, does that mean the company cannot conduct business in Hanoi? Can the company legally enter into a contract with a Hanoi or Danang company? I will be visiting HCMC regularly and will appreciate your thoughts on the above. If possible, I would also be available on 20th June to meet up in the morning at your office to discuss this further. Looking forward to your reply.

  5. Visitor
    Rajat Roy
    08/08/2019

    Sir,I rajat here I live in India,I need a job, Any vacancy for me, I am based in printing line Last twelve years. and still now working in duplo digital duplicate machine, this machine are high speed printing machine.i am sales and repearing. And my previous work experience is photo copy machine repair and sales ten years experience. Thanks Regards Rajat Roy

  6. Visitor
    Atul Mittal
    20/08/2019

    Interested to open a trading company in Vietnam in Henoi.

  7. Visitor
    Vogle
    10/12/2019

    Dear recipient, I just finished a live that on your website and I would like to get a quote from you for some services regarding setting up a 100% foreign owned company in Nha Trang, Vietnam. My Name is Jørn-Inge Sund I have a friend that I have been working together with at a previous employer. He has a company in Norway that does outsourcing and own R&D work. Now, he wants to expand and open a company here in Vietnam aswell. I have been living in Vietnam for nearly 5 years, and working here so he wants me to be the GM of his company. He personally (or his Norwegian company that he also owns 100% of the shares, depending on what is best/easiest) will be the owner, with 100% of the shares. single member, LLC company. The proposed name we want for the Vietnamese company is “Velox Tech Co., Ltd.” (the same as the Norwegian) We do have a business address, and we have an accountant that has been working at a bank the last 10 years, so what we want a price for doing is: 1. Help with Investment license Help with Business registration Help with Tax registration 2. I, myself have an investment company in Vietnam together with a Vietnamese friend, and I have a TRC valid until 02.2020. I also have an exemption letter for work permit with that company. I will need a work permit for the new company and a TRC extension aswell. Could you please give me a quote of these service, and a approximate time frame of the process from start to finish? Please make the quote in 2 parts, specifying the price for part 1 and 2 separately Thank you in advance for your reply.

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