F-Legal

Trade and trade-related activities in Vietnam

2018-02-01T21:27:00.002+07:00

Commodity trade is one of the most global popular activities. Let’s see how the trade activities of foreign traders are classified under Vietnamese regulations.

1. Import and Export

The right to export means the right to purchase goods in Vietnam for export, including the right to have one's name written in the exports declaration in order to carry out, and take responsibility for, export-related procedures. Export right does not include the right to purchase goods from non-traders for export, unless otherwise provided for by Vietnamese law or treaties to which Vietnam is a contracting party.

The right to import means the right to import goods from abroad into Vietnam for sale to traders who have the right to distribute such goods in Vietnam, including the right to have one's name written on the import goods declarations for execution and take responsibility for import-related procedures. Import right does not include the right to organize or participate in the distribution system in Vietnam except otherwise provided for by Vietnamese law or international treaties to which Vietnam is a contracting party.

Find out how to open an import-export company in Vietnam in this Article.

2. Distribution

Distribution includes wholesale, retail, agency sales and franchising activities.

(i) Wholesale distribution means the activity of selling goods to wholesalers, retailers and other traders and organizations; excludes retail distribution

(ii) Retail distribution means the activity of selling goods to individuals, households and other organizations for use for consumption purposes.

The difference between wholesale and retail activities lies in the buyer. If a trader sells goods to a buyer who then sells that it to another party, it is the wholesale. If the goods is sold to the buyer, who will directly use or consume the goods, then it is retail. For instance, a trader sells a big machine to a factory, the factory will use that machine to produce goods, the factory is end-user. This is a retail distribution activity.

Find out how to open an wholesale and retail company in Vietnam in this Article.

(iii) Franchising is an activity, in which a trader that grants commercial rights, including also the secondary franchisor in relation to the secondary franchisee. Commercial right is right granted to the franchisee by the franchisor that also requests the franchisee to undertake by itself the business of supplying goods or providing services within a system set up by the franchisor and associated with the franchisor's trademark, trade name, business slogan, business and advertising logo.

(iv) Traders may act as agents to buy and sell goods of foreign traders through agency contract.

3. Commercial assessment services

4. Logistics services, except those as committed in applicable international treaties;

5. Goods leasing (financial leasing not included), except leasing of construction equipment with operators;

6. Trade promotion services, except advertising services;

7. Trade intermediation services;

8. E-commerce services; and

9. Bidding organizing services for goods/services.

Forms of business in Vietnam

2017-11-16T19:05:00.006+07:00

Enterprise

Enterprise means an organization that has legal entity status its own name, assets, office, and is registered in accordance with Vietnam Law on Enterprise to do business

There are many types of enterprise under Law on Enterprise, such as: Joint Stock Company, Limited Liability Company, Partnership, etc. Find out more different between types of enterprise in Vietnam in this Article.

Establish an enterprise is the most popular choices of foreign investors when doing business in Vietnam. Since investors will have a legal entity with fully rights to conduct the business. A Foreign Direct Investment (“FDI”) Enterprise is considered as a Vietnamese Enterprise, and to be treated equally with local enterprises.

Steps to setting up an FDI Enterprise:

Step 1: Ask for investment policy (apply in few very special cases)

Step 2: Ask for Investment Registration Certificate (minimum 15 working days)

Step 3: Ask for Enterprise Registration Certificate (minimum 3 working days)

Mergers and acquisitions (“M&A”)

M&A is a special investment method in which investor no needs to set up new enterprise. By the capital contribution or share purchase in an existing domestic enterprises, foreign investors can become shareholders or members of Vietnamese enterprises. They may have right to management if the ownership ratio reaches the required level. Subject in some cases to ownership limitations which vary depending on the industry sector. Find out more investment condition in this Article.

Step to do M&A

Step 1: Due Diligence (apply in some cases)

Step 2: Negotiate the price and sign M&A contract

Step 3: Register purchase share in Department of Planning and Investment (minimum 15 days)

Step 4: Amend the current Enterprise Registration Certificate of the Target Company (minimum 3 days)

Representative Office (“RO”)

Foreign traders with business relations or investment projects in Viet Nam may apply to open representative offices in Viet Nam. In general, it takes minimum 7 working days to register for a RO establish license. This is a very common form of registered legal presence in Viet Nam, particularly those in the first stage of a market entry strategy

It should be noted that a RO may not conduct commercial or revenue - egenerating activities (i.e. the execution of contracts, receipt of funds, sale or purchase of goods, or provision of services). A RO is only permitted to:

• Act as a liaison office;

• Conduct market research; and

• Promote its parent company’s business and investment opportunities. Thus representative offices can provide a wide range of ancillary support to their foreign-based parent companies.

Branch

This is not a common form of foreign direct investment and is only permitted in a few sectors (i.e. banking, law firm, audit firm…). A branch is not an independent legal entity. Branches of foreign companies are different from representative offices in that a branch is permitted to conduct commercial activities in Viet Nam.

Business Cooperation Contract

A BCC is a cooperation agreement between foreign investors and at least one Vietnamese partner in order to carry out specific business activities. This form of investment does not constitute the creation of a new legal entity. The investors in a BCC generally share the revenues and/or products arising from a BCC and have unlimited liability for the debts of the BCC.

Public And Private Partnership Contract

A Public and Private Partnership (‘PPP’) contract is an investment form carried out based on a contract between the government authorities and project companies for infrastructure projects and public services. PPP contracts include Build-Operate-Transfer (‘BOT’), Build-Transfer (‘BT’), Build-Transfer-Operate (‘BTO’), Build-Own-Operate (‘BOO’), Build-Transfer-Lease (‘BTL’), Build -Lease-Transfer (‘BLT’) and Operate-Manage (O&M) contracts.

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Invest in Vietnam - Why no and why now?

2017-11-13T18:08:00.002+07:00

Vietnam is a promise land for young labor force, with 35% of population under 30s. Most of them have well-educated (graduated from universities, colleges), quite active, and love to drink milk-tea. They also can speak English and prefer to work for foreign companies Average income in Vietnam is about $ 2,000/year. Therefore, you can hire the most talented people there to work for your startup project for less than $ 500 - 700 per month. Obviously, many people with degrees and well - experienced are willing to do the jobs with a salary of $ 1000.

Renting an office in Vietnam is very cheap. Some startup companies work in offices for less than $ 300/month. As for $ 1000/month, you can have a modern office in central Hanoi or Ho Chi Minh City, or you may even have a villa similar to the one in The Social Network.

I am proud and confident to say that Vietnam has a culinary background that can satisfy anyone with lots of choices for unique, delicious and nutritious dishes. Ten people came to Vietnam, all ten complimented the excellent Vietnamese food.

Former USA President Barack Obama ate Bun Cha in Hanoi

Traditional Vietnamese foods

In recent years, the world has faced many problems such as economic crisis, terrorism, natural disasters, political turmoil ...

Vietnam, a peaceful country, has not yet faced any catastrophe. There have been no reports of earthquakes and terrorism in Vietnam in recent years. Even Vietnam is almost unaffected by the financial crisis and the global economy.

West Lake in Hanoi

Moreover, the market here is open and less harsh than other places. All fields in Vietnam are almost new, you will not have to compete with other competitors in the same industry. The fact is that companies like Grab or Lazada are doing very well in Vietnam is proof for this.

Viet Nam has a stable social-political environment since the government has committed to creating a fair and attractive business environment for foreign investors. The Vietnamese government is very focus in building a sustainable ecosystem and developing it for Startups. The Vietnamese government always considers small and medium size enterprises as the center and driving force for economic development. The range of business conditions is gradually being removed. Many investment incentives are available in order to attract investors come to Vietnam

APEC 2017 has been held in Vietnam

Vietnam is a large market with 92 million population. A rising middle class’s creating a breakthrough in the consumer future market. Vietnam has young population, who highly Internet penetration, fast adaptability new technology. So this is still a potential market, stimulating investors to pour money into

Youth Vietnamese in a coffee shop

The available geographic features makes Vietnam a paradise under the earth

Furthermore, doing business in Vietnam gives you a lot of opportunities to travel. Vietnam has 4000 years of history and more than 1000 km of coastline, you can enjoy 4 seasons in a year, all forms sightseeing excursions, from artificial to scenic spots such as Ha Long Bay, Nha Trang or Sapa.

Travel brings a lot of inspiration and it helps your company connect better together, creating a firmer belief in the company. This even launches creativity in people, helping them think more, be creative and more productive in their work.

Why lock yourself and your team inside the boring office instead of enjoying both work and life?

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Conditional business for foreign investors in Vietnam

2017-11-11T13:02:00.001+07:00

Identifying the conditions to do a specify business is the most complex part during the preparation step to invest in Vietnam.

The legal basis to identify investment conditions

Vietnamese competent authorities are based on these legal documents to identify investment conditions for foreigner investors

1. Vietnam's WTO Commitments On Services And Goods

2. Trade Agreements (FTAs) including both collective FTAs as a member of ASEAN, and bilateral FTAs (such as FTAs with the EU, Japan, Chile and Eurasian Economic Union).

3. Law On Investment 2014 and Guidance Decrees

4. Specialized legal documents (Construction Law, Real Estate Trading Law, Commercial Law....)

5. Decisions of Prime Minister, Decisions of local People's Committee...

Principles when applying investment conditions

A foreign investor that makes investment in various business lines must fulfill all conditions applied to these business lines;

A foreign investor that is regulated by international agreements on investment that provide for different investment conditions may apply the investment conditions provided for in one of such international agreements and must fulfill the foreign investor’s rights and obligations under the selected international agreement.

Regarding sectors and sub-sectors excluded from commitments or not specified in Vietnam’s WTO Schedule of commitments and other international agreements on investment, if investment conditions applied to foreign investors are already provided for in Vietnam’s law, such Vietnam’s law shall apply;

Where a foreign investor in a territory that is not a WTO member makes investment in Vietnam, such investor shall apply the same investment conditions as investors in WTO members, unless otherwise prescribed by law and international agreements between Vietnam and such WTO members;

Regarding sectors and sub-sectors excluded from commitments or not specified in Vietnam’s WTO Schedule of commitments and other international agreements on investment, if investment conditions applied to foreign investors are also not provided for in Vietnam’s law, the investment registration authority shall consult with the Ministry of Planning and Investment and relevant Ministries;

How to apply

1. Investors can not invest on prohibited business lines under article 6 Investment Law of Vietnam:

Business in drugs prescribed in Appendix 1 to this Law;

Business in chemicals or minerals of types prescribed in Appendix 2 to this Law;

Business in specimens of wild fauna or flora included in Schedule 1 of the Convention on International Trade in Endangered Species and specimens of species of endangered and rare wild fauna or flora in Category 1 with the natural origin as prescribed in Appendix 3 to this Law;

Business in prostitution;

Purchase or sale of humans, tissues or parts of the human body;

Activities relating to asexual reproduction

2. Investors can definitely invest on business sectors which Vietnam has opened market (none) if investors meet with investment requirements

Check out the list of services which Vietnam has opened for foreign investors here

3. Investors may invest on business sectors which Vietnam has not committed to open market (unbound) in case relevant authorities accept their investment project.

This procedures often takes long times and unsure about result. Because the result depends on business sectors, government policies at that moments...

List of business lines in Vietnam

In fact, CPC (Central Product Classification) system of WTO will be applied to determine foreign investors' business sector. This CPC codes are shown on Investment Registration Certificate. Then CPC codes will be convert into Vietnam national system economy when apply for Enterprise Registration Certificate. For your reference, this is the list of business lines in Vietnam. In general, the four-number codes are official applied.

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Capital to open company in Vietnam

2017-11-07T15:39:00.000+07:00

Planning to start a business in Vietnam? You're probably wondering just how much money you're going to need. This article I will explain the capital of company from the legal point of view

What is the minimum capital for a FDI company in Vietnam

There is no requirement for minimum capital under current regulations. In fact, Vietnamese authority agencies will consider capital level depends on each investment project. One thing for sure that you can not open company without money. Department of planning and investment ("DPI") will ask you prove that you have financial ability to implement a feasibility investment project. The "feasibility" will depend on what business, size, location of business... Here is some example for your information (they are not applicable in anytime and any case):

- Information and technology project: 10.000 - 15.000 USD for minimum
- Consulting project: 10.000 USD for minimum
- Trading project: 50.000 - 100.000 USD for minumum
- Construction project: 50.000 - 100.000 USD for minumum .....

Assets contributed capital

- Cash

Cash is the most popular asset which used to contributed capital. You can use Vietnamese Dong ("VND") or freely convertible currencies (such as: USD, EUR, KRW, JPY...). Foreign currency shall be converted to VND under exchange rate at the time contribute the capital

- Gold

- Intellectual property rights, technology, know-how

Constitutional Law and Enterprise Law of Vietnam has recognized intellectual property rights, technology and know-how as the assets contributed capital. However, because they are intangible, so it is difficult to determines real value of that property. Since Ministry of Finance Vietnam has not issued any regulation to guide how to appraisal intangible properties. Therefore, investors CAN NOT contribute capital by intellectual property rights, technology and know-how so far.

- Other fixed assets

Other estates and real estates such as: machines, equipments, cars, motorbikes, houses..., can capitalize in company as the fixed assets. Previously, assets contributed to an company upon its establishment shall be valued by its members or founding shareholders on the principle of consensus or by a professional valuation organization. If these assets are valued by a professional valuation organization, the value of the assets contributed as capital shall be accepted by a majority of members or founding shareholders.

Investors shall transfer of ownership of assets contributed as capital.

For assets with registered ownership or value of land use rights, the capital contributor shall carry out the procedures at a competent state agency to transfer the ownership of such assets or the value of land use rights to the company. The transfer of ownership of assets contributed as capital is not subject to registration fee;

For assets the ownership of which is not subject to registration, capital contribution shall be made by handing over assets contributed as capital, certified with a minutes.

Required documents to prove finance ability of investor

Bank statement of individual investors that show he has balance in account that is equal or more than his registered capital. This document shall be original and translate into Vietnamese

Audited Financial Statement of company in 2 latest fiscal years, in case investor is organization. They need to be certified and consular authentication at Vietnam Embassy in incountry of investor. Two certified and legalized copies shall be required.

Duration to contribute capital

Investors shall make full payment for the capital they have registered to purchase within 90 days since the date the investment registration certificate is granted. In order to do that, company needs to open a Foreign direct investment capital account at a Commercial Bank in Vietnam

Name of company in Vietnam

2017-11-04T14:57:00.000+07:00

First thing, your business needs a name! The name of your business has an impact on how clients, partners and investors view you. In today’s small world, it’s a world-wide decision. How to come up with a good legal name under Vietnamese law? Here is some instructions for you

For FDI company, there are two different kinds of name that you need to distinguish: "Name of Investment Project" and "Name of Company". Law does not require these two names need to be similar.

Name of Investment Project

This name is shown on Investment Registration Certificate ("IRC"). There is not any special requirement for name of investment project, except that name shall not be copied from name of other investment projects or name of companies' which are existing.

In general, investors like same name for investment project and company, but it is not compulsory. Later, investors can change the name of investment project by the procedure for amend IRC within 15 working days. Therefore, let's feel free to create your unique and impress investment project name.

Name of company

This name is shown on Enterprise Registration Certificate ("ERC") and used as the official name in transactions with government, tax department, banks, business partners, clients... Unlike investment project name, there are many conditions that apply for name of company.

A company has three different names. Here is an example:

- Company name in Vietnamese: CÔNG TY CỔ PHẦN FABULOUS

- Company name in English: FABULOUS JOINT STOCK COMPANY

- Brief name: FABULOUS JSC

Company name in Vietnamese

This name has structure in three parts:

CÔNG TY (COMPANY) + TNHH/CỔ PHẦN (TYPE OF COMPANY) + ABCXYZ (PROPER NAME)

The group "CÔNG TY TNHH" (LIMITED LIABILITY COMPANY) or "CÔNG TY CỔ PHẦN" (JOINT STOCK COMPANY) is compulsory, indefeasible and always be written in Vietnamese

Proper name can be creative by investors, but it needs to follow some rules:

Name shall be created from Latin letter, Vietnamese alphabet, numerals and symbols ("-", "&"...). For example: Chinese, Japanese, Korean symbols... or "ö", "ü", "ä", "å"... are not allowed to use. This proper name may have meaning or without meaning.
Prohibited naming company that is: Using names which are identical or confusingly similar to the name of a registered enterprise in Vietnam; Using the name of a state agencies...; Using words, phrases and symbols which contravene national historical traditions, culture, ethics and fine customs
Prohibited naming company which can confusingly similar with famous trademarks in all over the world (such as Google, Coca-cola, Gucci...) or violate other registered trademarks
Before deciding to naming you company, you should check the existing name on the Vietnam National Business Registration Portal and Vietnam Industrial Property Digital Library and domains name

Company name in English is translated from Vietnamese name. The proper name of an enterprise may be kept unchanged or translated according to its meaning

Brief name is abbreviated from Vietnamese name or English name

Keys to have a good company name:

Unique and unforgettable

Avoid unusual spellings

Easy to pronounce and remember

Keep it simple

Make some sense

Give a clue

Favor common suffixes

Types of company in Vietnam in Vietnam

2017-10-29T20:22:00.000+07:00

Companies in the Vietnam do not all operate in the same way. A company’s classification depends, among other things, on how many people own the company and the extent to which those people are responsible for the company’s liabilities. The distinction between the different types has important ramifications for the legal status of the company, particularly with regards to ownership and management system. Here, I would like to introduce you the list of company types, its features under Vietnam Enterprise Law 2014 and what they mean for your business

Individual Business Household

This type of business is the smallest size and only apply for Vietnamese citizens. Therefore, foreign investors are not allowed to open Individual Business House (see Article 6.1, Decree 78/2015/ND-CP)

Private Enterprise

Private Enterprise is an enterprise owned by one individual who shall be liable for all activities of the enterprise to the extent of all personal assets. Enterprise law does not prohibit foreign investor set up Private Enterprise. The point is that, the owner shall be unlimited liability for all debts of enterprise. However since it is foreign owner, most of his or her personal assets are in other countries. So what is the mechanism to protect creditors in this case?

In fact, there is no administrative procedures which guides to set up Private Enterprise for foreign investors so far. So Department of Planing and Investment (DPI) will deny the your application dossier which choose type Private Enterprise

Single Member Limited Liability Company ("Single Member LLC")

If the investor is only one individual or only one organisation, type of enterprise, mandatory, shall be Single - Member LLC. The features of this company types are: only one owner, not allowed to issue shares, and the owner may enjoy limited liability, and company has has a status of a legal person. This means that the company’s liabilities are the legal responsibility of the company and the owner will not be liable for the company’s debts. No personal liability will arise for the owner in addition to the full capital already contributed or in the the value of the guarantee pledged.
Since this is one owner company, the owner has full rights to decide all matters of company by issue the decision, without any meeting or decision of other non-member, such as: contents of Company Articles, business plans, appoint directors, restructuring company, enjoy profit, dissolving company.... Single - Member LLCs also have fewer corporate formalities and greater tax flexibility. The company owner (the President) can be the director (legal representative) or hiring other man to be company's director.
However, it can not raise fund by issue shares or invite other investors to become members of company (otherwise, it needs to convert type of company into Multiple - Member LLC or Joint Stock Company). The owner can not withdraw contribute capital (except few special cases).
You can find more information of Single - Member LLC in THIS ARTICLE.

Multiple - Member Limited Liability Company ("Multiple - Member LLC")

If the number of investors are only TWO and NO MORE. Once again, your company shall be in the form of Multiple - Member LLC. In case there are 3 investors or more, investors can consider between Multiple - Member LLC or Joint Stock Company ("JSC")

In Multiple - Member LLC, the number of members are from 02 up to 50 people and has a status of a legal person. The members may enjoy limited liability. This means that the company’s liabilities are the legal responsibility of the company and the members will not be liable for the company’s debts. No personal liability will arise for the members in addition to the full price of the shares already purchased. Company can easily raise fund by increasing the contributed capital of members or raising the contributed capital of new members. The Members' Council shall be composed of all members and is the highest decision-making body of the company. Members can quit company by transfer his/her capital contribution in the partnership to another person

If there are more than 50 members, company shall convert to JSC form. Multiple - Member LLC are not allowed to issue shares or join the Stock Market. The advantages of Multiple - Member LLC, however, are huge. For example, it has simple management structure; members can easily come in or go out company without difficult rules like in JSC. So if your business may have stable members amount and no need to call capital from public, Multiple - Member LLC would be the best choice!

Joint - Stock Company ("JSC")

JSC is a company whose stock is owned jointly by the 3 or more shareholders and has a status of a legal person. So in order to set up JSC, you need at least 3 investors and unlimited maximum. The shareholders may enjoy limited liability in the scope of contributed capital. This type of company is really suitable for medium or big size enterprise. The shareholders who are these first men establish company, are called founding shareholders. They have some exclusive rights, such as, their names will stay forever in company record as the founding shareholders; in the first 3 years of company, they will be prioritized to buy other shareholder's shares in case that shareholder wants to transfer shares... JSC can be organized as a normal enterprise; or can be a public company by joinning Vietnam Stock Market, in this case company may call the big capital from the public...

A JSC has quite complex and complete manager structure, in general, which is General Meeting of Shareholders, General Assembly, Supervisory Board and Directors or General Director. The attendance rate of General Meeting of Shareholders shall be at least 51% of shareholders. The resolutions of the General Meeting of Shareholders shall be adopted when the number of shareholders representing at least 51% of the total number of votes of all shareholders attending the meeting is approved by the shareholder... You can find more information of JSC in This Article.

Partnership Company, Public JSC, Business Cooperation Contract

A Partnership Company ("PC") is a form of enterprise set up by at least two partners and has a status of a legal person - a PC is akin to a limited liability partnership in other jurisdictions. A PC must have two general partners and may also have limited partners (literally, “capital contributing members”). General partners are liable for 13 Forms of Doing Business in Vietnam all obligations of the PC with their own property, while limited partners are only liable to the extent of their capital contribution. To date, PCs have not been a common vehicle for foreign investment in Vietnam

Public JSC is a JSC that was issued shares to public, or stock listed, or has very huge shareholders quantity. This company's type is the biggest one and it is not suitable for start-up business, so I don't write in detail about Public JSC.

A Business Cooperation Contract ("BCC") is a contractual relationship akin to a partnership which does not create a new legal entity but which is licensed to engage in business activities in respect of a specific project in Vietnam. BCCs are most commonly used in the oil industry, where production sharing contracts have traditionally been structured as BCCs, and in telecommunications and advertising projects. This is changing as LLCs and JSCs are being allowed into these fields

How to choose the right type of company for your start-up business

Here is the things that you should consider:

(i) Procedures, costs to set up and operate company

If only based on type of company, there is no big difference on price, dossiers, time and procedures to set up company
To operate company, the Single - Member LLC has the simplest structure. The Multiple - Member LLC has member council and advisory board, so it will more costly than Single - Member LLC. JSC is the most expensive cost to operate, since it has complex structure. Basically, a JSC has a General Meeting of Shareholders, General Assembly, Supervisory Board and Directors or General Director. For example, fees to have a meeting, then send invitation letters, rent place for meeting... such things are not cheap and need to do regular...

(ii) The number of investors

Some investors would like to set up and manage business by themselves, and do not want the participation of other investors. Later when the business develops and need more capital, inevitably, company will have more owners. The statutory number of investors is very important aspect. For example, even though you are very like the JSC model, but your business just can has 1 investor maximum, you can not set up JSC no matter how much you like it.

(iii) The operation manager structure

Type of company leads to the type of operation manager structure, the separation between ownership rights and management rights. The more separative between ownership rights and management rights, the more chance owner will lose the control to company. If company has many owners, the manager structure will be more complicated. In case, the owner doesn't want relinquish management rights, single-member LLC is the best choice. Multiple-member LLC has more members and it needs to have Member Council, and supervisory board is compulsory when company has more than 11 members. In general, JSC has many owners and manager boards to share and control the management rights. The strictly distinction between ownership rights and management rights is the outstanding features of JSC compares with other company's types.

(iv) Shares transferability and sell company

The owners may freely want to shares transfer or sell company to others, without notification or acceptance from another owners. From this point of view, JSC is the most suitable type. The ordinary shareholders can freely transfer shares to others (except few restriction to founding shareholders within first 3 years). Members of Multiple - LLC just can transfer their capital for the third parties after offer for sale capital for members of company. Transfer capital in single - member LLC often leads to 2 cases, convert type of company or sell company and change all the Articles of company

(v) Ability to raise capital

A company can not just be dependent on owners' equity. When new stage comes, company needs to raise capital from many sources, in general, that is loan from bank and/or issue shares. There is no limit on bank loan under laws apply to all companies, as long as company meets the conditions of bank. Only JSC can issue shares, so JSC has the most choice to raise capital

(vi) Taxes

Enterprise income tax affects to devided profit of investors. However, general enterprise income tax is applied to profit of all types of company. So the different of company's type doesn't make the different of tax

Location to open company

2017-09-27T17:52:00.001+07:00

Find office space then for your business not only to have a place to work, but also as a specific office address in Vietnam is required by the government for the business licenses application

Choose location in the Industrial Zone

In general, manufacturer/producer prefer to choose location for business in Industrial Zone. Because the professional infrastructures are already available, reasonable rent fee, outstanding investment incentives...

In order to have a location in an Industrial Zone, investors shall sign a long-term leasing contract (at least 5 years). Moreover, they need to invest on fire protection system and plan for environmental protection.

Provincial Industrial Zones Authority is the licensing and management unit of enterprises operating in industrial zones

Binh Xuyen Industrial Zone

Choose location outside the Industrial Zone

1. Under Vietnamese Laws, apartment buildings are not allowed to locate company, since it violates the purpose of apartment building that is for living only.

Office in apartment building is illegal

2. In case you rent office in a building, it shall be an office building. You need to ask lessor provide legal documents which show that building has office leasing function (construction license, investment license...)

Bitexco Finacial Tower in Ho Chi Minh City

A typical office in office building

3. Houses are allowed to locate business office there

4. A legal address may use as the headquarters of many companies, as long as each company has its own independent space

I don't encourage you use virtual/fake address to register your company there, because that may not be approved by competent authority. Even if yes, later your company may have some legal troubles with that fake location. For example, local police or tax staff may often comes there to inspect headquarter.

Provincial Department of Planning and Investment is the licensing and management unit of enterprises operating outside the industrial zones

Memorandum of understanding ("MOU")

Your mission is choose the good location for your business purpose. You can find it by self or use service of real estate agent. Each business type is required different legal conditions for location. For instance, location for restaurant or factory... shall be able to design the fire protection system. Since those conditions are very huge, you can contact me to have consultation on what location's condition requires for your business type.

THEN, negotiation terms and conditions of leasing MOU.
Notice legal status of lessor:

+ If lessor is individual and not own any business license, your company can not have any deduct from rent location money for tax purpose.

+ If lessor is individual business households, it shall has a license which have business scope: leasing real estate. Later, your company can have deduct from rent location money for tax purpose. But lessor also has to pay tax for tax department.

+ If lessor and owner is company, that company shall has business registration certificate with business scope: leasing real estate. If lessor is subleasing party. Third party needs to provide main contract with owner, therein shows that it allows sublet rights. It also needs to have business license certificate with business scope: leasing real estate (sublet).

NEXT STEP, sign the leasing MOU and pay deposit. The official leasing contract will be signed after you have company. This is the list of documents that you need to take from lessor:
- Main version of MOU, at least 03 original copies
- Certificate of land use right/and ownership of housing, at least 03 notarized copies
- Enterprise registration certificates of lessor (if any), at least 03 notarized copies
- Main leasing contract, in case you sign contract with 3rd party (if any), at least 03 notarized copies

Sample of Vietnam Certificate of land use right/and ownership of housing

Consular Authentication under Vietnamese Law

2017-09-26T18:13:00.001+07:00

When doing administrative procedures in Vietnam such as: investment, work permit… you will be asked by service staffs or state agencies for Consular Authentication with documents what you bring from foreign countries (Business license, Financial statement, Judicial Records, Degrees…). Hereafter, I will explain you what Consular Authentication is and how to do it.

Consular authentication means the competent Vietnamese agencies' certification of stamps, signatures and titles on foreign papers and documents for being recognized and used in Vietnam. Simply, they will be pasted a label and stamped, signed by Vietnam Consular Agency, look like this:

Consular authentication is simply certification of stamps, signatures and titles on papers and documents, not covering certification of contents and forms of papers and documents.

Some of documents will not be consular authentication if following one of these cases:

i. Documents containing modifications or erasures without proper correction as required by law;

ii. Documents containing contradictory details;

iii. Forged or unduly issued or certified papers and documents according to law;

iv. Documents bearing non-original signatures or stamps (photo copy documents are not accepted);

v. Papers and documents with contents infringing upon the interests of the Vietnamese state.

Next part I will give you direction how to have that Consular Authentication ("CA") stamp:

- First step, prepare documents need to do CA. If those documents are origin versions, it's very good. If you can not use origin versions, you should do the notarial certificate, it means do copies in notarized office with confirmation of public notary

- Second step, apply for Consular Seal of documents' origin country

* If you are in foreign country: Take documents to your Ministry of Affair, ask for Consular Legalization, then your document will have consular stamp and signature.

* If you are in Vietnam, please notice that most of cases can't ask for consular seal of Origin Country's Embassy in Vietnam. For example, Embassy of South Korea, Japan, China in Vietnam will refuse handling dossier ask for consular legalization. It means you have to send documents back to origin country and do like first way. So before come, you should call to check that whether they do consular legalization service. In my clients' experience, few Embassies and Consulates provide consular legalization service such as: Sweden, Mongolia, Germany, Singapore...

- Third step, apply for Vietnam Consular Authentication

* If you are in foreign country: take those documents to nearest Vietnamese Embassy, consular staff will guide you how to do CA. Time and price will depends on each country. For example, in Vietnamese Embassy in Germany will complete CA within 1 month, Vietnamese Embassy in China will do within 2 weeks...

* If you are in Vietnam, you need bring documents to one of these address:
- Consular Department - Vietnam Ministry of Foreign Affairs: 40 Tran Phu, Ba Dinh Dist, Hanoi City

- External Relation Office in Ho Chi Minh City: 6 Alexandre de Rhodes, Ben Nghe Ward, Dist 1, Ho Chi Minh City

State fee: 30.000 VND/document. Time: 5-7 working days

I also can do very quickly Consular Authentication in Hanoi and HCMC, please contact me to know price and time. Thank you!

Health check paper for work permit

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In order to do work permit for foreign labor in Vietnam, health check document is a compulsory part in dossier. This health check should do by no one but by yourself, because you need to go to hospital, do all requirement tests (example: blood test, urine test, X-ray,...). There are 02 ways to have a legal health check under Vietnamese laws:

* First way: do health check in foreign country:

You can do health check in foreign country's hospital, of course no problem. You can use this way when you are still in other country and your company wants to do your work permit before you fly to Vietnam. Remember this health check paper is only valid within 12 month from the issued date, it also needs to have your picture therein and conclusion of doctor like: "Mr/Ms..(your name).. is healthy enough to work". Next step, you need to do Consular Authentication and translate to Vietnamese, delivery it to Vietnam => done

* Second way: do health check in Vietnam

If you want to do health check in Vietnam, of course you should be in Vietnam already and go to Vietnam's hospital with a local person. Advantage of this way that is no need to do consular authentication and translate documents to Vietnamese. You should spend 1-2 days and 100~200 USD, price depends on each hospital. Remember prepare 2 portrait pictures of you size 4x6 cm, later hospital will use them to paste into document. You only can come to one of hospital in this below list to health check (update for September, 2017). In general, International Hospitals are more expensive but good services, fast and comfortable. Vietnam Hospitals are cheaper, but it often takes you long time to queue and sometimes doctors and staffs can't speak good English.

Ho Chi Minh City:

1. Cho Ray Hospital

201B Nguyen Chi Thanh, District 5, HCMC

Tel: +842838554137 - 38554138 - 38563534

2. Thong Nhat Hospital

No.1 Ly Thuong Kiet, Ward 7th, Tan Binh District, HCMC

Tel: +842838642142

3. FV Hospital (France - Vietnam Hospital)

6 Nguyen Luong Bang St., Saigon South (Phu My Hung), Dist.7, HCMC

Tel: +842854113333

4. University Medical Center HCMC

215 Hong Bang Str, Ward 11th, Dist.5, HCMC

Tel: +84283855 4269 / +84283952 5355

5. Columbia Asia International Clinic

08 Alexandre de Rhodes Street, Ward Ben Nghe District 1, HCMC

General Line: +8428 3823 8888 Customer Care: +8428 3823 8455 Japanese Desk:+8428 3829 0485 Contact from Mobile (VN): +842838238888 / +842838238455

6. Van Hanh General Hospital

781/B1-B3-B5 Le Hong Phong Street, Ward 12th, District 10, HCMC

Tel: +84238632553

7. An Sinh Hospital
10 Tran Huy Lieu Street, Ward 12th, Phu Nhuan District, HCMC
Tel : +842838457777

8. People Hospital 115
527 Su Van Hanh, Ward 12th, Dist 10, HCMC
Tel: +842838652368

9. Trung Vuong Hospital
266 Ly Thuong Kien, Ward 14th, Dist. 10, HCM
Tel: +842854484949

10. Thu Duc General Hospital
No. 29, Phu Chau Str., Tam Phu Ward, Thu Duc Dist, HCMC
Tel: +842837295503

11. Phuoc An Medical Center - 3th (Closed)

12. Vinmec Central Park International Hospital
208 Nguyen Huu Canh Street, Binh Thanh District, HCMC
Tel: +842836221166

13. Vigor Health
Miss Ao Dai Building, 21 Nguyen Trung Ngan Street, Ben Nghe Ward, District 1, HCMC
Tel: +842839115315

14. International SOS Vietnam Clinic
167A Nam Ky Khoi Nghia St, Dist. 3, HCMC
Tel: +84283824 0777

15. Viet Gia Clinic
166 Nguyen Van Thu, Da Kao, Dist. 1, HCMC
Tel: +842839118485

16. City International Hospital
No 3, 17A Str., Binh Tri Dong B Ward, Binh Tan Dist., HCMC
Tel: +842839118485

Hanoi City

1. E Hospital
89 Tran Cung, Nghia Tan ward, Cau Giay Dist, Hanoi
Tel: 024.37543650 - 024.37561351

2. Saint Paul Hospital
12 Chu Van An, Dien Bien Ward, Ba Dinh Dist, Hanoi
Tel: +84 24 3823 3075

3. Bach Mai Hospital
78 Giai Phong Str, Phuong Mai Ward, Dong Da Dist, Hanoi
Tel: +84 24 3869 3731

4. Hanoi French Vietnam Hospital
No. 1 Phương Mai Str, Dong Da Dist, Hanoi
Tel :+84 24 -3577-1100

5. Hong Ngoc Health Check-up Center
B1F zone, Keangnam Landmark 72, Pham Hung Str, Ha Noi
Tel: +84 243927 5568 ext 0

6. Thu Cuc International General Hospital
No. 286 Thuy Khue Street, Buoi Ward, Tay Ho District, Hanoi
Tel: +84 904 519 080

7. Trang An Hospital
59 Lane Thong Phong, Quoc Tu Giam, Hanoi
Tel: +84 243732366

10. Duc Giang Hospital
54 Truong Lam, Duc Giang Ward, Long Bien dist, Hanoi
Tel: +84 243 8272075

11. Dong Da General Hospital
192 Nguyen Luong Bang, Dong Da, Hanoi
Tel: +84 24 85822392

12. Vietlife Clinic
14 Tran Binh Trong, Hoan Kiem Dist, Hanoi
Tel: +84 243942 5666/ 0243942 3666

7 reasons why you should invest in Vietnam

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Each investor has own reasons to invest in Vietnam. Hereinafter I will refer the micro reasons that are advantage you will have when decide invest in our country

1. ECONOMIC STRENGTH

Vietnam remains one of the fastest-growing Asian economies with high GDP growth in recent years, based on the power of FDI & the private sector.

Vietnam’s economy is well on the way to being a multi-sector model operating according to market mechanisms. Over the last decade the economy has recorded an average GDP growth rate of 7.2 percent per annum, ranking top in the Asia-Pacific region. The private and FDI sector enjoy very favourable conditions created by the Enterprise Law and Investment Law of 2014, which institutionalizes the freedom of all individuals to conduct business in areas not prohibited by law and removes a large number of administrative obstacles that hampered enterprises.

Although Vietnam’s economy was affected from the international economic crisis and the internal irrational macroeconomic setbacks such as high inflation rate, trade deficit and budget overspending, the economy recovered rapidly, with GDP growth rate of 6.21% in 2016. Vietnam became a lower middle income country with its GDP per capita exceeding USD 2,215 in 2016.

The Government has put forward some key solutions to the national socio - economic development plan for 2016, including inflation curbing and macroeconomic stabilization; economic restructuring and administrative reform; improved workforce quality and social welfare etc. with the goal to attain the GDP growth rate of about 6.3 percent, and the reduced trade deficit and CPI (consumer price index) of under 5 percent.

2. YOUNG AND COMPETATIVE WORKFORCE

Vietnam has a population of 95.54 million people (15^th largest in the world) expected to grow to 100 million in 2020 with an annualgrowth rate of 1.2%. Over 50% of the population is 25 years or younger. Possessing, highly skilled, young workers with an extraordinary work ethic and literacy rate of more than 90%, the Vietnamese are equipped with a high levelof education and are prepared to serve in high skilled industries likeinformation technology, pharmaceuticals and financial services, at a more competitive cost than other countries in the region.

Vietnamese is the official language. The modern written language uses theVietnamese alphabet, a Romanized representation of spoken Vietnamese.

While English is increasingly favored as a second language, other languages used to a lesser extent in Vietnam are Korean, Japanese, French, Russian, Chinese…

3. GEOGRAPHIC LOCATION & BIG MARKET

Located in the cradle of Southeast Asia, Vietnam’s advantageous geographic location can serve as a launch pad and home base for what is already the largest collection of people on earth (the combined populations of ASEAN along with China, Japan, South Korea and Chinese Taipei account for over 2 billion people).

Vietnam occupies the eastern coastline of the Southeast Asian peninsula, and shares land borders with China to the north, and Laos and Cambodia to the west. Its coastline provides direct access to the Gulf of Thailand and the East Sea.

Vietnam has a land area of 331,114 square kilometers. Most of the country is hilly or mountainous, with flat land representing only about 20 percent. The primary topographical features in the north are highlands and the Red River Delta and the south includes the central mountains, coastal lowlands and the Mekong River Delta.

Vietnam has a beautiful long sea coast of 3,444 km, which is an ideal condition for development of maritime industry, trade and tourism in particular and for its emergence as a shipping centre for and the world in general.

Hanoi, the capital of Vietnam, is located in the north of the country and Ho Chi Minh City, the largest city in terms of population and economic activity, is situated in the south. Other major cities include Hai Phong, Da Nang, Hue, Vinh, Quy Nhon, Nha Trang, Can Tho, and Da Lat…

Diverse geographical structure together with hills, highlands and coastal areas are suitable for comprehensive economic zones.

4. NATURAL RESOURCE

Since it began offshore oil exploration in the 1970s, Vietnam has become a net exporter of crude oil, while gas and petroleum reserves, coal reserves, and the harnessing of hydropower electricity provide other readily available sources of power. Minerals located in Vietnam include iron ore, tin, copper, lead, zinc, nickel, manganese, marble, titanium, tungsten, bauxite, graphite, mica, silica sand, and limestone. In addition, Vietnam has played a significant role in the exportation of agricultural products to the world markets as the world’s largest exporter of pepper, second largest exporter of coffee and rice, and third largest exporter of cashews, among other products.

5. SAFE DESTINATION AND STABLE POLITICS

In a region of the world where some countries remain vulnerable to political and economic instability, Vietnam has benefited from its stable government and social structure, making it an ideal place for capital investment. After 40 years of peace and development, Vietnam has become one of the reliable investment destinations for many countries due to its political stability and consistency. One of the most important factors for FDI enterprises to choose to invest in Vietnam is security.

Vietnam is a one-party state run by the collective leadership of the Communist Party Secretary-General, the Prime Minister (PM) and the President. Policy is set every five years by the Party congress and adjusted twice a year by plenary meetings of the Central Committee. The Government and other state organs are responsible for implementing policy. The National Assembly has the power to approve and revise the Constitution and Laws, make important decisions on national matters (policies on internal and foreign affairs, socio-economic factors, political factors, security factors, operations of state bodies), and supervise all operations of state bodies.

The President, as Head of State, represents The Socialist Republic of Vietnam on internal and foreign affairs. The Government is the highest administrative state body of The Socialist Republic of Vietnam, and responsible for executing and managing political, economic, cultural, social, national defence, security and foreign affairs of the state bodies. Ministries are responsible for the execution of state power in the certain industry or sector. People’s Committee (province, district, and commune) governs management affairs within its administrative location, manages, directs, operates daily activities of local state bodies and executes policies of the relevant People’s Council and higher state bodies.

6. SUPPORTIVE GOVERNMENT POLICY

Attracting foreign direct investment (FDI) has always been a key part of Vietnam’s external economic affairs. Vietnam already has many comparative advantages and a strong investment climate, but we are working hard to become even more appealing to foreign investors. We are doing so by vigorously renovating the business and investment climate, and by recognizing that the FDI sector is an integral part of the economy – essential to restructuring the economy and raising national competitiveness.

The Vietnamese government is continuing to revitalize its business and investment climate. One way it is doing this is its work on three “strategic breakthroughs”: putting in place market economy institutions and a legal framework; building an advanced and integrated infrastructure, particularly transport; and developing a quality workforce. These should all be completed by 2020.

The government remains determined to fulfil it’s the rest of treaty obligations like EVFTA. Vietnam views the success of FDI enterprises as its own success. As such, the government is committed to ensuring a stable socio-political environment, protecting the legitimate rights and interests of investors, and creating an enabling environment for FDI enterprises in the country.

In the medium and long term, Vietnam will continue in its efforts to attract and efficiently use FDI inflows to advance socio-economic development. The country will target “high quality” FDI inflows, focusing on FDI projects that use advanced and environmentally friendly technologies, and use natural resources in a sustainable way. It will also target projects with competitive products that could be part of the global production network and value chain.

In term of corruption prevention, all ministries and central and local agencies have to strictly implement rules and regulations on the prevention and combating of corrupt activities, particularly the regulation that public officials have to make reports on their income and assets.

7. DOING BUSINESS IS GETTING EASIER EVERY YEARS

Vietnam has made numerous amendments to their regulations to make investing in Vietnam more transparent. In terms of ease of doing business, Vietnam ranked 82 out of 190 countries in 2016. Compared to the previous year, the ranking improved by 9 positions. This rise was the result of improvements in some processes of doing business. For example, the government made the procedures of getting electricity and paying taxes easier, according to the World Bank report. Based on their economic models, Trading Economics predicts Vietnam to rank 60 by 2020. Hence, the future prospects of ease of doing business in Vietnam are very promising.

Source: http://fia.mpi.gov.vn/news/76/Literate-Competitive-workforce

Welcome to F-Legal

2017-09-22T18:16:00.001+07:00

You are in my blog for investor who interest to invest in Vietnam, especially in Ho Chi Minh City and Ha Noi City
Why me, Fiona?
After few years work, fortunately, I have been liked by most of my clients. As their feed back, I can explain them difficult legal regulations in easy way and very fast understanding. I also do license very quickly and match with deadline.
Furthermore, I work as individual right now, with selection clients. So I will handle your case from start to end, you don't need to contact with other people. I don't need a big system of staffs because I will do by myself everything. Therefore, my price is much cheaper than you use service of a law firm, and you still have got same final results what you need with qualified consultation 😊

Sincerely

Fiona Nguyen