Company Formation and Incorporation - Vietnam
Background
Vietnam, officially the Socialist Republic of Vietnam, is a country in 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. The South China Sea lies to the east and south. The mountains of the Annam Cordillera rise over most of the western side of Vietnam, while a thousand-mile (1,600-kilometer) coastline dominates the east.
Vietnam is one of the fastest-growing economies in the world. Although investors are generally permitted to invest in local entities, Vietnam has stringent bureaucratic requirements with regard to foreign investments. There are also various licensing and approval processes required for investments in certain sectors. It also holds the right to restrict investment in certain sectors, the terms and conditions for investing in those conditional business are all posted on the National Portal for Business Registration.
Incorporation Process and Timeline
| Limited Liability Company | Local Company | Vietnam Representative Office | Vietnam Joint Venture | |
| Minimum number of directors | 1 | 1 | 1 | 1 |
| Minimum number of shareholders | 1 | 1 | 1 | 2 |
| Local Presence (director/ shareholder/ officer) | Yes | Yes | Yes | Yes |
| Maximum Foreign Shareholding | 100% | 100% | 100% | 99% |
| Physical registered office address requirement | Yes | Yes | Yes | Yes |
| Office Lease Agreement Requirement | Yes | Yes | Yes | Yes |
| Minimum Paid Up Share Capital | USD 50,000 | USD 100 | None | USD 50,000 |
Incorporation Timeline | 2 months | 2 weeks – 1 month | 2 months | 2 months |
Public Register of Shareholders and Directors | Yes | Yes | Yes | Yes |
Preference Shareholders | Yes | Yes | Yes | Yes |
Regulator | MPI | MPI | MPI | MPI |
Taxation and Accounting
| Limited Liability Company | Local Company | Vietnam Representative Office | Vietnam Joint Venture | |
Corporate Tax | 20% | 20% | 0% | 20% |
Tax Exemption | No | No | Yes | No |
Auditor Requirement | Yes | No | No | Yes |
VAT Payable | 10% | 10% | N/A | 10% |
Double Taxation Treaties | Yes | Yes | No | No |
Annual Tax Return Filing Requirement | Yes | Yes | Yes | Yes |
Annual Financial Statement Filing Requirement | Yes | Yes | Yes | Yes |
International currency control on remittance | Yes | Yes | Yes | Yes |
Others
| Limited Liability Company | Local Company | Vietnam Representative Office | Vietnam Joint Venture | |
| General Activity | Products and services | International Trading | Research and Branding | Specific Industries |
| Physical Presence for Incorporation | No | No | No | No |
| Expatriate to Local Staff Ratio | N/A | N/A | N/A | N/A |
| Foreign Investments | Government approval is required should the company has a foreign ownership of 51% and above | |||
| Average monthly salary for local employees | USD 400 | |||
Corporate Bank Account
| Limited Liability Company | Local Company | Vietnam Representative Office | Vietnam Joint Venture | |
Corporate Bank Account Available | Yes | Yes | Yes | Yes |
Bank Account Opening Timeline | 2 – 4 months | 2 – 4 months | 2 – 4 months | 2 – 4 months |
Vietnam offers the following benefits:
- Vietnam is one of the most-rapidly growing economies globally with 6% annual growth. The annual growth is also expected to increase. The country that used to be one of the world’s poorest is now becoming a hub for labour-intensive goods. It has long been an attractive foreign direct investment (FDI) destination, so foreign investors now want to set up a company in Vietnam.
- One of the lowest costs of labour with an average monthly wage of USD 300 monthly. Moreover, the Vietnamese population is relatively young compared to other Southeast Asia countries. Vietnam’s literacy rates are also high; hence it makes sense to set up a company there as the workforce is equally competitive with lower labour costs.
- The country has also developed one of the most competitive tax regimes throughout Southeast Asia. Vietnam’s tax incentives are a standout feature of the tax regime and are applied to a variety of projects and industries throughout the country.
- There are also multiple government incentives available as the local government realises the importance of foreign investments. Foreign investors, particularly those involved in slightly higher value-add production, should be able to use incentives to offset their temporary costs until regulatory reforms take hold, and to position themselves ahead of their competitors in the years ahead.
- Free Trade Agreements. Vietnam is a member of the World Trade Organisation and ASEAN, allowing smooth trading with other nations.
- Improving infrastructure. New urban rail networks, the expansion of regional airports as well as an international hub airport are all part of major infrastructure development programs. Furthermore, Vietnam profits from its strategic location at the center of the ASEAN.
Vietnam Company Registration Guide
The Ministry of Planning and Investment (MPI), formerly the Committee of State Planning, is a governmental ministry charged with the role of state management over planning and investment. The ministry’s headquarters is in Hanoi.
The agency provides, among others, strategic advice for country-level socio-economic development. It also programs and plans economic management mechanisms and policies for the national economy, for specific sectors as well as for domestic and foreign investments.
Desfran Services in Vietnam
With more than a decade of experience, our team at Desfran is here to meet your business needs beyond just company formation. We also provide the following services in Vietnam:
- Company formation
- Assistance in Business Management
- Corporate Management advisory
- Provision of registered agent and registered address
- Provision of company management, directorship, and shareholding services
- License application assistance
- Onshore/ Offshore bank account introductions and applications
- Virtual office services and other corporate services
- Nominee services
Application Process:
- Submit your interest here
- Our Offshore Formation Specialists will reach out to you for an in-depth discussion
- A customised proposal will be sent to you upon uncovering your needs,
- Upon the proposal confirmation, we will require the of the following information for the application
- Proof of Identity
- Proof of Residence (within the last 3 months)
- director(s),
- shareholder(s) and
- beneficial owner(s)
Once the above has been approved, we will send you an invoice for payment.
The incorporation process will commence upon receiving payment
Desfran deals directly with the authorities instead of the use intermediaries in your application process. In this way, we are able to ensure our prices remain competitive while you are ensured of utmost privacy and care in your application.