Mục lục . Content
Pursuant to:
Law 59/2020/QH14 on Enterprises (Law 59),
Law 61/2020/QH14 on Investment (Law 61),
Law 14/2008/QH12 (amendment 2020) on Corporate income tax (Law 14),
Law 107/2016/QH13 on Export and Import duties (Law 107),
Law 45/2013/QH13 on Land (Law 45).
The establishment a new company in Vietnam has following provisions:
1. Preparation for establishment
1.1. Who are foreign investors ?
[Clause 19 Article 3 of Law 61: Foreign investors means an individual holding a foreign nationality or an organization established under foreign laws and carrying business investment activities in Vietnam.]
1.2. The following organizations and individuals do not have the right to establish in Vietnam
[Clause 3 Article 17 of Law 59:
– Minors, people with limited legal capacity, incapacitated people, people having difficulties controlling their behaviors; organization that are not juridical persons;
– People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence […];
– Juridical person that are banned from business operation […] by decision of the court.
1.3. What fields are foreign investors allowed to do business in Vietnam ?
– [Clause 1 Article 5 of Law 61: Investors are entitled to carry out business investment activities in the business lines that are not banned [..] by Law. However, regarding conditional business lines, investors must satisfy business investment conditions as prescribed by law.]
– Banned business lines [click here]
– Conditional business lines [click here]
1.4. What documents must foreign investors prepare ?
[Article 33 of Law 61:
– Passport of investor being an individual, Operating license of investor being an organization.
– Documents proving investor’s financial capacity:
+ For individual: Bank document confirming the balance in investor’s bank account.
+ For organization: The investor’s financial statement for the last 2 years or commiment of a parent company (or a financial institution) to provide financial support.
The amount of investment capital need to prove: equal or more than the amount of investmentcapital of the company to be established.
– Document to prove investor has rented a place for company’s headquarter, or the place where the project will be implemented:
+ Lease agreement, and
+ Documents proving the lessor’s rights to lease the place (if the investodoes not request the Vietnamese government to lease land to implement the project).
Note: Do not rent an apartment (that is used for residential purposes) for the company’s headquarter.
– Other documents depend on the investment fields, scale, location of the project.
1.5. Other options for investor
– Types of enterprise:
Investor can choose one of the popular types of enterprises as follows:
+ Single-member limited liability company (01 member max),
+ Multi-member limited liability company (from 02 to max 50 member),
+ Joint stock company (unlimited shareholders).
– Charter capital:
Investor can choose the amount of charter capital suitable to fields, scale of project. However, required capital amount is applied to the conditional business lines.
2. Processing the establishment
2.1. Documents to submit [Article 33 of Law 61:
– Documents instructed in item 1.4 above;
– Proposal for the investment project including the following main contents: investors, investment objectives, investment scale, investment capital, location, plan for raising capital, duration and schedule of the investment project, proposal for land use (if any), demand for labor, proposal for incentives, …
2.2. Approval time
Approval time depending on the investment fields, amount of investment capital, investment location. Normally, approval time is 25 working days.
2.3. Competent authority
Which authority approves will depend on investment fields, amount of investment capital, investment location. Normally is Provincial Department of Planning and Investment.
2.4. Step of establishment
– Step 1: Apply for approval investment project to be granted the Investment Certificate.
– Step 2: Apply for approval to be granted the Business Registration Certificate.
3. Post-Establishment work
– Making the company seal and Director seal.
– Registering of digital signature.
– Opening a company bank account .
– Choosing accountant or accounting service.
– Registering to use e-voices.
– Hanging the company signboard (including: company name, address, tax identification number, phone number, email).
4. Investment Incentives
– Corporate income tax incentives
[Article 13, Article 14 of Law 14:
+ The corporate income tax rate of 10% shall apply for 15 years and exemption for 4 years, reduction 50% for the next 9 payable years to: new investment projects in geographical areas with specially difficult conditions and in economic zones and high-tech zones, projects on high-tech;
+ The corporate income tax rate of 10% shall apply for 10 years and exemption for 4 years, reduction 50% for the next 9 payable years to the sectors of education and training, vocational training, medical health, sports, environment, agricultural project on high-tech.]
– Exemption from import tax on goods imported to form fixed assets, raw material [under Clause 11 Article 16 of Law 107] to projects with fields and locations eligible for investment incentives by law;
– Exemption from land rents [under Clause 1 Article 110 of Law 45] to projects with fields and locations eligible for investment incentives by law.
– Exemption from licensing charges for newly established company [under Point c Clause 1 Article 1 of Decree 22/2020/NĐ-CP].