Why Vietnam

Heart of South East Asia

Vietnam is located right next to the East Sea – a commercially important “link bridge” on the world maritime map, of the 39 maritime routes currently operating in the world, there are 29 routes passing through the East Sea territory. Of the 10 largest maritime routes in the world, the South China Sea region has one route passing through and 5 related routes, on average, 250-300 ships travel through the East Sea per day. In terms of strategic location, security, maritime and economic transport, the East Sea is very important for many countries in Asia in particular and the world in general.

Global Production Base

Vietnam is located in the centre of Southeast Asia. This is a great advantage in economic development and exchanges with other countries in the region. Located on the Central India peninsula, a few countries adjacent to the East Sea, Vietnam has become a gateway of Laos, Cambodia, Myanmar and Thailand via maritime routes. Especially when the South China Sea is the crossing point of international maritime routes, this will be a great advantage in economic development and regional exchanges. From Vietnam, you also find a way to reach Singapore – Asia’s dragon within 2 hours. Being China’s neighbour, China is the largest market in the world manufacturing and high-tech industries drive economic development in Vietnam.

Alternative Option Investment

The output values of many Vietnamese products and industries, such as semiconductor, optoelectronic, information, and communication products account for more than 25% of the Asia Pacific market. Vietnam is invested by very big corporations such as LG, Samsung to set up production plants, from which products are exported to all over the world. A series of investors also came together to join the chain of production and supply of goods. Agriculture and tourism are also a strength of Vietnam. Investors are tending to move from heavy industry to agriculture, tourism and services because Vietnam has numerous islands and land and tourism resources.

Effect of Vietnam FTA

Vietnam has 16 Free Trade Agreements (FTAs) that have been or are being negotiated, helping to open the door of more than 60 economies, including 15/20 countries of G20. With a strong Supporting Industry, Vietnam is an ideal environment for investors.
In conclusion, the international ranking reports show that Vietnam’s business environment remains as excellent as it is now. Looking toward the future, Vietnam will continually create a better, friendlier environment, more conducive to business.

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Overviews of Key Features

Overview of Vietnam Companies


Type of Company

Limited Company, Joint Stock Company, Partnership Company, Private business.

Type of Ordinance

Company Co. ,Ltd

Allowed Business Activities

The company engaged in any lawful business but a specific type of business requires a particular license in Vietnam

Local Registered Office/ Agent Required

Yes

Shelf companies Available

No

Language of Documents

Vietnamese (Traditional)

Name of Company

Vietnamese & English (Must)

Common Seal

Vietnamese


Vietnam Corporate Information - Overviews of Key Features

Vietnam is located right next to the East Sea – a commercially important “link bridge” on the world maritime map.

On the Southeast Asian airline map, three of the world’s largest ports, including Singapore, Hong Kong and Kaohsiung (Taiwan), are almost two hours away from Hanoi and Ho Chi Minh City. Vietnam enjoys a healthy and independent legal system, with the average Vietnamese citizen having a high sense of awareness and respect for the law. Predictability and stability in business operations, therefore, are high. At the same time, commercial regulations are quickly adjusted in line with changing international norms and foreign investors enjoy substantial protection under the Investment Law. The population of Vietnam for the year 2018 is estimated at 94 million, of which the labour force aged 15 and over is 55.16 million, ranking 3rd in the ASEAN region in terms of the proportion of the labour force. With cheap labour costs, Vietnam can be considered a potential destination for investors.

TNC Vietnam corporate

GENERAL

Location of Jurisdiction South East Asia
Official Language Vietnamese
Political Stability Excellent
EU Savings Tax Directive Applies No
Tax on Offshore Profits Yes
Disclosure of Beneficial Owner Yes
Submit Audited Accounts Audit for financial statements is required for FDI company
Time to Incorporat 4-8 weeks

 

 

 

 

Vietnam corporate information

CORPORATE

Type of Company Limited Company, Company limited by shares, Partnership Company, private business.
Type of Law Law on enterprise
Allowed Business Activities An entity-level certificate/license may be required for certain regulated businesses (e.g. financial institutions, construction, Education, Law, Accounting & Auditing, Insurance, Wine…)
Local Registered Office/ Agent Required Yes
Change of Domicile No
Shelf companies Available No
Language of Documents Vietnamese
Name of Company Vietnamese and English also
Corporate Seal A corporate seal is mandatory

Premia TNC Vietnam

DIRECTOR

Eligibility Any person of any nationality
Minimum Number of Directors 1 (at least ONE nature person)
Disclosure to Authorities & Public Yes
Residence Required May reside anywhere
Local Director Required No
Location of Meetings Anywhere

Vietnam service

COMPANY SECRETARY

Secretary Required No

Premia TNC Vietnam

SHAREHOLDERS

Minimum number of shareholders Unlimited
Maximum number of Shareholders Unlimited
Eligibility Any person of any nationality or body corporate
Disclosure to Authorities & Public Yes
Annual General Meetings Required
Location of Meetings Anywhere

TNC Vietnam services

SHARES

Minimum Number of shares Unlimited
Maximum Number of shares Unlimited
Bearer Shares Permitted No
Classes of shares permitted Ordinary shares, preference shares, redeemable share and shares with or without voting rights.

TNC Vietnam corporate

SHARE CAPITAL

Permitted currencies VND
Minimum paid-up share capital Unlimited (if the business entity engages in activities that require a special permit or approval, the authorities may set a certain capital requirement)
Maximum share capital Unlimited
Government charge No
Recommended share capital No
Requirement to be paid-up No

Premia Vietnam services

Restrictions on Name and Activity

Investors should first select a name for the company that they will be setting up in Vietnam. The name of the company can be searched on the National portal on business registration then chose the final one to apply. Certain words that suggest specialist activity can only be used when the appropriate licenses have been obtained (e.g. asset management, construction, bank…).

Financial Statement Requirements

Annual audited financial statement is required if it is Foreign Direct Investment (FDI) company. In these cases, an appointed auditor is required, who must be registered to the Ministry of Finance with and hold a practising certificate. Vietnam companies must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors.

Annual Filings/ Requirements

  • Filing of Income Tax Return (annually)
  • Filing of Value-added Tax Declaration (monthly/ quarterly)
  • Filing of Personal Income Tax (monthly/ quarterly/ finalization)
  • Filing of Withholding Tax Return (monthly/ quarterly)

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TYPE OF COMPANIES

Vietnam Corporate Information - Type of Companies

Vietnam is located right next to the East Sea – a commercially important “link bridge” on the world maritime map, of the 39 maritime routes currently operating in the world, there are 29 routes passing through the East Sea territory. Of the 10 largest maritime routes in the world, the South China Sea region has one route passing through and 5 related routes, on average, 250-300 ships travel through the East Sea per day. In terms of strategic location, security, maritime and economic transport, the East Sea is very important for many countries in Asia in particular and the world in general.

One member Limited Company

One member Limited Liability Company is usually chosen by small-to-medium-sized foreign investors. The advantage and disadvantages are summarized as below.

Advantages

  • The liability obligation of the owner for the company’s debts is limited to the amount of his/her respective capital contribution
  • The owner of the company has all power for the entire company activitie
  • The capital transfer regime is tightly regulated sothe investor can easily control the change of owner to limit the penetration of strangers into the company
  • Capital can be transferred freely

Disadvantages

  • One member Limited Liability Company does not allow for share issuance

Joint Stock Company

Each type of company has the following natures:

  • Possess legal person status.
  • The liability obligation of each shareholder limited to capital contribution.

A Joint Stock Company is usually chosen by the foreign investors with medium size to large scale.

The advantages and disadvantages are summarized below.

Advantages

  • Joint-Stock Company normally can raise capital easily by issuing shares to the public, which is a unique feature of a joint-stock company.
    The liability of the shareholders for the company’s debts is limited to the amount of their respective shareholding.

Disadvantages

  • The management and operations of a joint-stock company are complicated because the number of shareholders can be very large, there are many people who do not know each other. So the Board of Management and Board of Directors of a joint-stock company need to ensure the benefits of the company, benefit of shareholders and benefit of employees.
  • Business and financial security capabilities are limited because the company must be public and report to shareholders; the listed companies must be widely publicized.

Branch

The branch of the company is a dependent unit of the enterprise and is responsible for implementing all or part of the functions of the enterprise, including the function of authorized representative. The business lines of the branch must be suitable for the business lines of the enterprise.

Foreign business entities registered as companies under foreign laws shall first apply for recognition as a foreign company and its establishment of a branch office in Vietnam with the Department of Planning and Investment (DPI).

Advantages

  • The branch has the right to sign economic contracts on behalf of the branch, affixing a branch seal.
  • Can operate independently in other areas/region of the company.

Disadvantages

  • Foreign investors have been operating for at least 5 years from the date of establishment or registration.
  • The license for establishing a branch of a foreign trader has a maximum term of 5 years.
  • If the enterprise registration certificate of the foreign trader mentions the limitation of the period of operating, the remaining time must be at least 1 year.
  • Branches often experience difficulty opening a bank account from some international banks.
    The head of the branch of a foreign trader must not concurrently hold the following positions:- The head of the Representative Office of another foreign trader;
    – The head of the Representative Office of the same foreign merchant;
    – The legal representative of an economic organization is established in accordance with the laws of Vietnam.

Representative Office (RO)

A representative office is one of the easiest ways to establish a legal business presence in Vietnam.

It is a form that many foreign companies take during the early development stages of investing in Vietnam. A representative office is basically a legal agent of the foreign company that is permitted to engage in price negotiations, provide quotations, participate in tenders, and sign procurement agreements. However, a representative office is not permitted to engage in income-generating business activities such as signing sales contracts, providing services, or receiving funds from clients.

Advantages

  • The most efficient form of entity to set up in Vietnam
    There are neither VAT nor corporate income tax filing, financial statement requirements for representative offices.
  • However, RO still needs to make responsible for personal income tax on the salary paid to employees as well as perform the obligations related to insurances regulated by Vietnam’s regulation.

Disadvantages

  • Cannot issue invoices to customers or import goods to Vietnam.
  • Cannot claim for a VAT refund.

 

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Do you need more information?

You may refer to these Vietnam business expansion guides to find out more:

Vietnam Company Incorporation

Guidance and important notes for new company incorporation in Vietnam.

Learn More

Vietnam Company Secretary Services

Is it mandatory to engage a corporate secretary in Vietnam?

Learn More

Vietnam Taxation System

What is Vietnam's tax system like? Understand the different types of taxes you and your business can incur.

Learn More

Frequently Asked Questions

Foreigners are allowed to register their company in Vietnam for starting a business. In most industries, they can own 100% of the shares of their business. In a few selected industries, company registration in Vietnam is only allowed in a joint venture agreement with a Vietnamese individual or corporate shareholder.

No, you aren’t. Our team can legally incorporate your Vietnam company without your presence in Vietnam.

Investors need to have a registered address to establish the company before submitting the application and it could be the virtual or shared office.