Benefits of Investors in Setting up a Business in Da Nang

Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports.

Da Nang is one of the tourist centers of the country, has rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang have infrastructure development, four types of roads are popular: high way, rail way, International airport and International sea way. Da Nang have the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to travel everywhere in Vietnam and other countries. Moreover, Da Nang’s water supply, electricity supply and communication system has developed rapidly and is increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City. Da Nang have Da Nang Port, which help investor in import/export activities easily.

The first advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms. With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism, so Da Nang which is considered as a locality with attracting investment policies in Vietnam. Examples: Procedures related to investment, investment locations, clearance and handover plan, the granting of business registration certificates and investment preference certificates shall be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center. Investors shall be exempt from all expenses related to the settlement of investment procedures apart from the payment of business registration fees according to the provisions of law. When investing in Da Nang, investors not only enjoy many preferential policy from city government but also have chance to find clients from many countries or compete with other companies in Vietnam and foreign countries.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership, these advantages has aroused, mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, ect that help investors who will invest in Da Nang have highest benefits.

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What Are Tax Obligations of a Representative Office in Vietnam?

 Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise. As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

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What Important Step-by-Step Guide to Establish Company in Vietnam?

 When foreign investors invest in Vietnam, they could establish company in Vietnam. Foreign investors have the right to choose the appropriate forms of enterprise such as a limited liability company, joint stock company, etc. with specific steps are as follows:

Step 1: Register the investment project

Investors submit an investment project registration file to the Business Registration office of the province or city or the management board of an industrial zone, an export processing zone or a high-tech zone for the approval of an investment project during the period within 15 days (without time for clarification).

Step 2: Apply for Certificate of investment registration

After approval of the investment project, investors submit a valid record to the Department of Planning and Investment within 10 days to apply for a business registration certificate.

Step 3: Apply for the certificate of business registration

After obtaining the business registration certificate, the investor shall submit the application for enterprise registration certificate to the enterprise registration office within 3 days.

Step 4: Publish the content of the business registration

After being granted the certificate of enterprise registration, the investor shall disclose information about the enterprise on the national enterprise registration portal within 30 days, including the following information:

i, Business lines;

ii, List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Step 5: Registered business stamp

The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:

– Company’s name;

– Business code.

After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.

Step 6: Notice of use of stamp:

After having stamp made, investors submit notices on use of stamp forms to the Investment registration agency.After receiving the record, the Investment registration agency issues a receipt for the enterprise, publishes the notice of the enterprise on the National Business Information Portal and issues a notice of the posting, stamp samples of enterprises, branches and representative offices for enterprises.

Step 7: Open bank account:

Investors need to open two types of bank accounts, namely the investment capital account to receive the investment amount and the transaction account for conducting daily transaction in Vietnam.

Step 8: The post licensing procedures:

For the conditional business lines:

Investors investing in conditional businesses lines as regulated in Appendix 4 of the Investment Law 2014 must apply certificate of business qualification, practicing certificates, professional liability insurance, legal capital requirements, etc. before conducting business in Vietnam.

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What Are Tax Obligations of a Representative Office in Vietnam?

 Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise. As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

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How Foreigners Could Buy Real Estate in Vietnam?

 Regulations on foreigners owning real estate in Vietnam are regulated in Civil Code 2015, Law on Land 2013, Law on Housing 2014, Decree no. 99/2015/ND- CP on guidelines the Law on Housing and related documents.

For land, foreign individuals are not eligible to use land assigned or leased by the State, recognized land use rights, received transfer of land use rights. However, a foreign-invested enterprise could be allocated or leased land by the State, recognized land use rights, or received a land use right transfer. Foreign-invested enterprises that are assigned land by the State with the collection of land use levies to execute investment projects on the construction of houses for sale or for sale in combination with lease.

For housing, foreign entities eligible for the homeownership in Vietnam include: foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization); foreign individuals who are allowed to enter Vietnam.

The foreign entities are eligible for the homeownership in Vietnam if they invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; or buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

Foreign organizations and individuals must have documents proving being the eligible subjects and meeting conditions to own houses in Vietnam. A foreign individual must have an unexpired passport bearing the entry seal of the Vietnam’s immigration authority and not given diplomatic immunity and privileges according to Ordinance on diplomatic immunity and privileges of diplomatic missions, consular offices, and representative authorities of international organizations in Vietnam. Foreign organizations must be subjects of owning houses in Vietnam which have investment registration certificate or a permission issued by a Vietnam’s competent authority for operation in Vietnam which is still unexpired at the time of housing transaction (hereinafter referred to as investment registration certificate).

A foreign entity shall not be granted a Certificate of the house and may only sell or offer it to another entity eligible to own housing in Vietnam in the case being: a foreign organization or individual receives a house as an inheritance or a gift which is located in an area in which foreign entities must not own houses, or the quantity of which exceeds the permissible limits; a foreign organization that does not operate in Vietnam, or a foreign individual who is not permitted to enter Vietnam, receives a house in Vietnam as a gift or an inheritance.

For specific situations, to avoid future dispute in house ownership arisen from the purchase, lease of property, house, land from the state, developer or other seller, or lessor it is important that the client check with property lawyers for eligibility, conditions and other relevant matters.

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Vietnam Sets to Develop E-commerce and Target 55% of the Population to Shop Online

 On May 15, 2020, the Prime Minister issued Decision No. 645/QD-TTg approving the National Master Plan on e-commerce development in the 2021-2025 period aiming to develop e-commerce business area through changing in policy, creating favourable environment, increasing government spending, and attracting investors participating and setting up business in developing e-commerce in Vietnam to transform the economy toward industry 4.0.

Specifically, the Vietnam Prime Ministers set the following goals to be achieved by 2025: 55% of the population participate in online shopping, the average purchase value is 600 USD/person/year; e-commerce revenue increases by 25%/year, reaching 35 billion USD, accounting for 10% of the total retail sales of goods and revenue of consumer services nationwide; non-cash payment in e-commerce reached 50%, of which payments made through intermediary payment service providers accounted for 80%; the average cost for delivery and final order completion accounts for 10% of the product cost in e-commerce; 70% of purchases on e-commerce applications have e-invoices.

Regarding e-commerce applications in enterprises: 80% of e-commerce websites have integrated online ordering function; 50% of small and medium enterprises conduct business activities on e-commerce trading floor, including social network with function of e-commerce trading floor; 40% of businesses participate in e-commerce activities on mobile applications; 70% of electricity, water, telecommunications and communication service providers deploy electronic contracts with consumers.

To accomplish the above objectives, the Prime Minister proposed specific groups of solutions, including: perfecting mechanisms and policies to meet the needs of e-commerce development in the context of technology revolution 4.0; improving the management and organization of e-commerce activities, online dispute resolution (ODR), fighting against commercial frauds, intellectual property violations.

The Prime Minister’s policy shows the role of e-commerce in the present era. E-commerce is one of the pioneering areas of the digital economy, where the advanced technologies of the Industrial Revolution 4.0 are widely applied to increase the efficiency of the business cycle, contribute to modernizing the distribution system, improve the competitiveness of enterprises, promote the development of the domestic market and export. Besides, identifying the overall goal when developing e-commerce in Vietnam is support and promote the widespread use of e-commerce in businesses and the community; to bridge the gap between major cities and localities on the level of e-commerce development; to build a healthy, competitive and sustainable e-commerce market; to expand consumption markets for Vietnamese goods at home and abroad through e-commerce applications; to promote cross-border e-commerce and transactions; to become a country with a developed e-commerce market among the top 3 countries in Southeast Asia.

This is an opportunity for domestic and foreign investors in the field of e-commerce as well as an auxiliary service for e-commerce to promote business and investment activities in Vietnam through establishment of companies providing services.

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What Are Conditions to Clean Up Criminal Records?

 Offenders who have completely served their penalties shall be given conditions to do business, live honestly and integrate with the community, and when they meet all the conditions prescribed by law, their conviction may be expunged and their criminal records will be cleaned. A person whose criminal record is removed is considered as having not been convicted. There are three cases of conviction expungement, including: Automatic conviction expungement; Conviction expungement under a Court’s decision; Special cases of conviction expungement.

Automatic conviction expungement applies to people convicted not for crimes of infringing upon national security and crimes of undermining peace, against humanity and war crimes when they have completed their main penalty, the probationary period of the suspended sentence, the person has served the additional penalty, other decisions of the judgment or has expired and does not commit any new crime during the periods specified below: (i) 01 year in case of a warning, fine, community sentence or suspended imprisonment; (ii) 02 years in case of imprisonment of up to 05 years; (iii) 03 years in case of imprisonment from over 05 years to 15 years; (iv) 05 years in case of imprisonment of over 15 years or commuted life imprisonment. A convict serving an additional punishment that is mandatory supervision, prohibition from residence, prohibition from holding certain positions, prohibition from doing certain jobs, deprivation of certain citizenship rights for a period longer than those specified in points (i), (ii), (iii) above, automatic conviction expungement shall be granted when he/she finishes serving the additional punishment.

Conviction expungement under a Court’s decision is applicable to persons convicted of crimes of infringing upon national security and crimes of undermining peace, against humanity and war crimes. The Court shall decide the conviction expungement of convict based on the nature of the crimes committed, the law-observing attitude, the convicted person’s labor attitude and the following conditions:

The Court shall grant conviction expungement if the convict, after serving the primary sentence or probation period as well as additional sentences and other decisions of the judgment, does not commit any new crime over the following periods: (i) 01 year in case of warning, community sentence, or suspended imprisonment; (ii) 03 years in case of imprisonment of up to 05 years; (iii) 05 years in case of imprisonment of between more than 5 years and 15 years; (iv) 07 years in case of imprisonment of more than 15 years, life imprisonment or death sentence that is commuted.

If the convict is serving an additional sentence which is mandatory supervision, prohibition from residence, or deprivation of certain citizenship rights for a longer period than that specified in points (i), (ii) above, conviction expungement shall be considered when he/she finishes serving the additional sentence.

If an application for conviction expungement is rejected for the first time, it may only be resubmitted after 01 year from the day on which it is rejected; if the application for conviction expungement is rejected for the second time, it may only be resubmitted after 02 years from the day on which it is rejected.

Where a convict shows remarkable improvements and has made reparation in an effort to atone for the crime and conviction expungement is requested by his/her employer or local authority, the court shall decide to grant conviction expungement if has served at least one third of the above period.

In order to be automatically expunge conviction or expunged conviction according to the decision of the Court, the convict must fully comply with the decisions in the judgment including the payment of court costs and not commit any new crime within the prescribed time limit. For special cases of conviction expungement, convict must have at least one-third of the time limit for conviction expungement according to regulations and the Court shall decide to expunge conviction at the request of agencies or organizations where the person works or the local government where the person resides.

The period after which a conviction may be expunged depends on the primary sentence. If the convict who has not had the conviction expunged commits a new crime which leads to a conviction under an effective judgment, the period after which the conviction may be expunged shall start over from the day on which the primary sentence has been served or the end of the probation period of the new judgment or from the deadline for execution of the new judgment. If the convict has committed more than one crime and one of which is automatically eligible for expungement, one of which is eligible for expungement under a court’s decision, the Court shall decide expungement pursuant to the prescribed time limit for conviction expungement under the Court’s decision.

A convicted corporate legal entity shall automatically have its conviction expunged if it does not commit any new criminal offence for 02 years from the day on which the primary punishments, additional punishments, other decisions of the judgment are served or from the expiration of the time limit for execution of the judgment.

Criminal record card can be obtained at authority to reveal the current criminal conviction situation or changes of situation of such conviction.

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How to Obtain Construction Practicing Licenses in Vietnam?

 The Construction Practicing License (practicing license) shall be issued to any Vietnamese citizens, overseas Vietnamese or foreigners who legally carry out construction activities in Vietnam in order to hold certain positions or operate their own construction business as prescribed in the amended Law on Construction 2020.

Holders of titles and individuals practicing construction activities who are required to possess practicing licenses as prescribed in Law on Construction include construction investment project managers, construction planning design managers, construction survey managers, construction design or design verification managers, construction supervision consultants, and managers in charge of formulating, verifying and managing construction investment costs. Any foreigner who obtained a practicing certificate issued by a foreign authority or organization and has practiced construction in Vietnam for less than 06 months shall be permitted to practise construction activities. If he or she has practised construction in Vietnam for at least 06 months, he or she is required to change the construction practicing license.

A foreigner shall be issued with the practicing license if he or she: has full legal capacity as prescribed by law and obtains a residence permit or work permit in Vietnam; has qualifications and experience relevant to requirements of the practicing certificate; passes the test in the field that is covered by the practice license applied for.

Practicing licenses shall be classified into Rank-I, Rank-II and Rank-III. In particular, a Rank-I practicing license is granted to the individual who gains a bachelor’s degree in appropriate major and at least 07 years’ experience relevant to requirements of that practicing license; a Rank-II practicing license is granted to the individual who gains a bachelor’s degree in appropriate major and at least 04 years’ experience relevant to requirements of that practicing license; a Rank-III practicing license is granted to the individual who has appropriate qualifications and at least 02 years’ experience relevant to requirements of that practicing license with respect to the holder of the undergraduate degree and at least 03 years’ experience with respect to the holder of the associate degree or intermediate diploma.

The competence authority in Vietnam to grant practice licenses: the construction-specialized agencies directly under the Ministry of Construction shall grant Rank-I practicing licenses; The Department of Construction issues Rank-II, Rank-III practicing license and recognized socio-professional organizations grant Rank-II, Rank-III practicing license to individuals who are their members and members.

An application for issuance of the construction practicing license for the first time includes: An application form enclosed with the applicant’s 02 color 4 x 6 cm and white background pictures which are taken within the last 06 months; Qualification(s) granted by a legal training institution in accordance with the type or rank of the certificate applied for; Decisions on task assignment (responsibility assignment) issued by an organization to an individual or written confirmation of completed typical tasks provided by the legal representative of the investor, in case the individual runs his/her own construction business, a contract and record on commissioning of listed typical tasks are required; Legal residence-related documents or work permit issued by a Vietnam competent authority, applicable to foreigners. The above documents must be notarized, legalized, authenticated then translated with certified true copies into Vietnamese or included in a file that contains color photos of originals or copies presented together with the originals for comparison. Besides, satisfactory test result in case the test is done before the date of submission of the application for the practicing license.

For application of the practicing license, the applicant shall submit an application form for issuance of the practicing license, electronically or by post or in person, to the issuing authority. From the date on which the satisfactory application is received, the issuing authority shall issue the construction practicing license within 20 days in the case of issuance of the license for the first time. In the case the application is unsatisfactory, the issuing authority shall notify the applicant in writing once within 05 days from the date on which the application is received.

The practicing license of a foreign individual, its effective period shall be determined according to the period specified in the work permit or temporary resident card issued by a competent authority but not exceed 05 years.

The above are provisions on the process of granting construction practicing licenses for foreign individuals working in Vietnam under the amended Law on Construction 2020. The amended Law on Construction 2020 takes effect from January 1, 2021.

ANT Lawyers, a law firms in Vietnam with offices in Hanoi, Da Nang, Ho Chi Minh city could assist clients with application process.

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How Foreigners Could Buy Real Estate in Vietnam?

 Regulations on foreigners owning real estate in Vietnam are regulated in Civil Code 2015, Law on Land 2013, Law on Housing 2014, Decree no. 99/2015/ND- CP on guidelines the Law on Housing and related documents.

For land, foreign individuals are not eligible to use land assigned or leased by the State, recognized land use rights, received transfer of land use rights. However, a foreign-invested enterprise could be allocated or leased land by the State, recognized land use rights, or received a land use right transfer. Foreign-invested enterprises that are assigned land by the State with the collection of land use levies to execute investment projects on the construction of houses for sale or for sale in combination with lease.

For housing, foreign entities eligible for the homeownership in Vietnam include: foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization); foreign individuals who are allowed to enter Vietnam.

The foreign entities are eligible for the homeownership in Vietnam if they invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; or buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

Foreign organizations and individuals must have documents proving being the eligible subjects and meeting conditions to own houses in Vietnam. A foreign individual must have an unexpired passport bearing the entry seal of the Vietnam’s immigration authority and not given diplomatic immunity and privileges according to Ordinance on diplomatic immunity and privileges of diplomatic missions, consular offices, and representative authorities of international organizations in Vietnam. Foreign organizations must be subjects of owning houses in Vietnam which have investment registration certificate or a permission issued by a Vietnam’s competent authority for operation in Vietnam which is still unexpired at the time of housing transaction (hereinafter referred to as investment registration certificate).

A foreign entity shall not be granted a Certificate of the house and may only sell or offer it to another entity eligible to own housing in Vietnam in the case being: a foreign organization or individual receives a house as an inheritance or a gift which is located in an area in which foreign entities must not own houses, or the quantity of which exceeds the permissible limits; a foreign organization that does not operate in Vietnam, or a foreign individual who is not permitted to enter Vietnam, receives a house in Vietnam as a gift or an inheritance.

For specific situations, to avoid future dispute in house ownership arisen from the purchase, lease of property, house, land from the state, developer or other seller, or lessor it is important that the client check with property lawyers for eligibility, conditions and other relevant matters.

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What Are Rights and Obligations of Foreigners Owning Properties in Vietnam?

 According to the current Vietnamese law, the ownership of houses in Vietnam by foreigners has changed significantly towards more openness. However, home ownership of foreigners and Vietnamese citizens are still different.

Foreign house ownership is allowed in commercial housing construction projects only (i.e., only in newly formed residential areas), not an area of national defense and security purpose. In case of house donation or inheritance of house not subject to this regulation, the foreigner only receives the value of that house.

The foreigners combined may not buy, rent and purchase, receive, inherit and own more than 30% of apartments in an apartment building; or not more than 250 houses of separate houses including villas, row houses in an area whose population is equivalent to a ward-administrative division

In an area whose population is equivalent to that of a ward, if there is a commercial housing construction project for sale or lease-purchase, the quantity of detached houses that may be owned by foreigner is specified below: where the quantity of detached houses of an project is fewer than 2,500, foreigner may own up to 10% of the houses of such project; where there is only one project whose quantity of detached houses is equivalent to 2,500 houses, foreigners may own up to 250 houses of them; where there are two or more projects where the total quantity of detached houses does not exceed 2,500 houses, foreigners may own up to 10% of the houses of each project. In case a house is donated or inherited in excess of the number of houses under this regulation, only the value of that house is entitled.

The foreigners are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not more than 50 years from the date of issuance of the Certificate and have can be extended further according to the Government’s regulations if the need arises; house ownership period must be specified in the Certificate.

In case a foreign individual marries a Vietnamese citizen or an overseas Vietnamese, he/she can own a stable, long-term house and has the same rights as a Vietnamese citizen.

The foreign organization are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not longer than duration stated in their Certificate of investment, including extension duration, the duration of the homeownership shall be determined from the day on which the organization is granted the Certificate and stated in such Certificate.

In addition, foreign organizations and foreign individuals permitted to enter Vietnam have the same obligations as Vietnamese citizens but must comply with the following provisions:

If the homeowner is a foreign individual, he/she is entitled to lease house for lawful purposes provided that he/she notifies the agency of district in charge of housing where the house is located of housing lease as prescribed in regulations of the Minister of Construction and pays taxes on housing lease as prescribed before leasing houses. If a foreign individual gets married to a Vietnamese citizen or an oversea Vietnamese, he/she qualifies for stable and long-term homeownership and has all rights of homeowner similarly to Vietnamese citizens.

If the homeowner is a foreign organization, its house is/are only provided for their employees but it is not allowed to use their house for lease, offices, or other purposes.

The above are provisions on rights and obligations of foreign organizations and individuals when owning properties in Vietnam. For specific matters, please consult with property, real estate lawyers for legal advice for the property transaction from deposit agreement, house sales and purchase agreement, and registration of ownership with authorities for certificate of land use right, or house owership certificate of to avoid property disputes in Vietnam, where the house ownership, land use rights are restricted for foreigners.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang, will help customers conveniently drafting contracts, Debt Recovery, Set up business, Foreign invest, Real estate ....

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What Rights Shareholder Holds in Joint Stock Company?

 Shareholders are individual or organization that owns at least one share of the joint-stock company and also are owner of the joint-stock company. Along with these roles, their interests are tied to business operations although they may not directly manage the day-to-day company affairs. In order to implement governance, the powers and responsibilities of each interest group such as shareholders, the board of directors, managerial personnel, etc. should be assigned based on the statutory principles and procedures.

According to the regulations on shareholders in the Law on Enterprise 2020, the rights of shareholders can be categorized into the following groups: economic rights, governance rights, information rights, and litigation rights.

Economic rights

Economic right is the right to gain all pecuniary interest with respect to the shares. The purpose of starting a business or investing in securities comes mainly from earning income or gaining profits. Economic rights accordingly include:

-Right to entitlement to dividends

-Right to transfer ownership

-Priority right to acquire the newly issued shares

-Right to entitlement to a portion of the assets after dissolution or bankrupt

-Appraisal Right

Among these above rights, right to entitlement to dividends and right to transfer ownership are the fundamental economic rights of a shareholder.

Dividend of common shares is determined according to the realized net profit and the dividend payment from the company’s retained earnings. Despite right to entitlement to dividends, shareholders are still subject to a number of limitations in law and in fact. Dividend entitlement is determined by the General Meeting of Shareholders based on the recommendation of the Board of Directors, after the company has fulfilled tax obligations and other financial obligations, contributed to reserve fund, paid for previous losses and met the solvency for all due debts and other property obligations. Dividend is not required to be distributed annually. Depending on the business situation, the General Meeting of Shareholders may decide to retain profits for reinvestment.

Besides dividend entitlement from the company’s operating results, shareholders can also gain profits by share transfer. This kind of investment is popular with respect of shares or securities of public companies, investors do not aim for corporate governance rights as well as dividend, they intend to earn benefits by the difference of the market values of stocks, especially when the stock value increases.

Governance rights

Modern corporate governance has two principles, one is to separate ownership and governance and to separate governance and management. It means that the major shareholders should not hold senior managerial positions in the company and Chairperson of the Board of Directors should not be assigned to other senior managerial positions such as General Director and/or Director.

Shareholders may be an individual or organization which they have their own different interests, goals and abilities. The separation between ownership and management makes the situation of whom the owner is and how the share get transferred not to affect the business operation. In the meantime, the separation helps gather professional managers to implement target intended by the company. According to the laws, members of the Board of Directors of a public company concurrently holding several executive titles must be reduced to the minimum to ensure the independence of the Board of Directors, specially the Chairperson of the Board of Directors shall not be the Director/General Director in a public company as of August 1st, 2020. There are no similar rules applicable to joint stock companies which are not public company.

Attendance, speaking and voting at General Meeting of Shareholders are fundamental in governance right of common shareholders, applicable to all shareholders holding at least one share. ty. In principle, being a shareholder who holds shares of the company regardless of the number has equal rights to attend and vote at the General Meeting of Shareholders. By the General Meeting of Shareholders, the shareholders holding a certain number of shares can impact decisions on some matters such as election, dismissal, and removal of members of the Board of Directors and Controllers, amendment and supplementation of internal documents, major transactions, and others as stipulated in law on enterprise or charter. In addition to the above rights, the majority shareholders also have a number of other rights related to governance as follows:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Call a General Meeting of Shareholders

-Request Board of Controllers to inspect each specific matter relating to management, governance of company affairs if necessary

-Recommend matters to be included in agenda of General Meeting of Shareholders

-The shareholder or group of shareholders holding at least 10% of the total number of common shares (charter may require a smaller percentage) is entitled to nominate candidates for the Board of Directors, Board of Controllers

Information rights

Shareholders have the right to access documents and information of the company. In addition to the basic documents such as the charter, list of shareholders, meeting minutes and resolutions of the General Meeting of Shareholders, shareholders have the right to access to reports related to the business affairs.

However, some information is only reviewed by shareholders who own required percentage of share:

-Access and extract information on full name and contact address as specified in list of shareholders having voting right and list of shareholders having right to attend General Meeting of Shareholder; request to adjust his/her inaccurate information

-Access, extract and scan charter of company, meeting minutes of General Meeting of Shareholder and its resolution

-Access, extract and copy partial or whole list of involved persons and their contracts, transaction of which the company is other party, interests of Board of Directors, Controllers, Directors or General Directors and other managerial positions of company

-Access and extract minutes and resolutions of Board of Directors, annual or mid-year financial reports, reports of Board of Controllers, contracts and transaction approved by Board of Directors and other documents, excepting for documents related to company’s know-how and trade secrets (applicable to shareholder and group of shareholders who own at least 5% of total number of common shares, the charter may require a smaller percentage)

-Access profit and loss statements, financial reports, governance and management assessment reports; inspection reports of Board of Controllers (applicable to shareholder who own shares at least 1 consecutive year, the charter may require a smaller percentage)

Different to common joint stock company, a public company must announce fully, accurately and promptly the periodic and extraordinary information on business, finance and governance. Other information must be announced if it influences share price and investment decisions of shareholders and investors.

Litigation rights

The Law on Enterprises has provided a mechanism to request the Court or Arbitration to rescind the resolution of the General Meeting of Shareholders or sue the managerial personnels when they fail to fully and properly implement their tasks, including:

The shareholder or group of shareholders holding at least 5% of the total number of common shares (charter may require a smaller percentage) is entitled to:

-Request to rescind resolutions of the General Meeting of Shareholders when the orders and procedures of calling the meeting and making resolution of the General Meeting of Shareholders seriously violate the regulations of the Law on Enterprises and company’s charter

-However, the resolution of the General Meeting of Shareholders adopted by 100% of the total number of voting shares is legal and effective even when the orders and procedures of calling the meeting and adopting such resolution violates regulations of the Law on Enterprises and company’s charter.

-Request to rescind resolutions of the General Meeting of Shareholders when its provisions violates the laws or company’s charter

-The shareholder, group of shareholders holding at least 1% of the total number of common shares is entitled to:

-Sue members of Board of Directors, Directors, General Directors separately or jointly under certain circumstances

The Chairperson of Board of Directors or the Director or General Director usually acts as the legal representative of the company, representing the company to perform rights and obligations arising from the company’s transactions, representing the company to take proceedings before the court or arbitrator. However, when their interests conflict with those of the shareholders, shareholders have the right to initiate a lawsuit claiming benefits or compensation. The Law on Enterprise also permits shareholders to sue on behalf of the company when the above managerial personnels commit violations, causing damage directly to the company and indirectly to shareholders.

Not all shareholders have the right to sue for the above managerial personnels, only those who own at least 1% of the total number of common shares. This restriction makes sense with respect of public companies, in order to eliminate unfair competition actions conducted by minority shareholders who is controlled by the rival companies because amount of 1% in public company is not a small number.

Similar to a lawsuit against a manager, shareholder or group of shareholders is also required to own at least 5% of the total number of common shares to request rescission of the resolution of the General Meeting of Shareholders if there is violation on substantive law and procedural law. Accordingly, all resolutions of the General Meeting of Shareholders violating the substantive laws or the company’s charter are rescinded at the request of shareholders, but only serious procedural violations may be rescinded. There is no specific instructions for serious procedural violations at this time, the assessment will depend on personal perspective of the court and arbitrator.

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Startup Company in Vietnam

 From 2015 onwards, the wave of small and medium-sized startups in Vietnam has been developing rapidly. This development is followed by government’s support in forming legal corridors, scheme to favour startup ecosystem and encourage science and technology organizations, research institute, technology incubator, etc. To be deemed as a startup, an individual or business must start their own business along with an innovative idea. Currently, startup is the legal term as recognized under the laws, especially on Law on Small and Medium Enterprises Assistance 2017.

For clarification, small and medium startups are small and medium enterprise (“SME”) established to implement its business ideas based on the utilization of intellectual property, technology and new business models and are able to grow rapidly. These enterprises are in the stage of getting a business up and running, attaches to science and technology or find out new business models, provide products and services to new market segmentation, growth rapidly and make a difference to domestic and foreign enterprises.

Directive 9/CT-TTg dated on February 18th, 2020 of the Prime Minister requires relevant ministries and agencies such as the Ministry of Planning and Investment, Science and Technology, etc. to implement solutions, remove barriers and resolve difficulties, issue policies to create favorable conditions for startups. These include the proposal to amend the Law on Investment in the direction of facilitating foreign investors to establish, contribute capital, purchase shares, or contributed capital of startup investment funds in Vietnam. Before establishing an economic organization, the foreign investor must have an investment project and carry out the procedures for issuance or amendment of the Investment Registration Certificate, except for the establishment of small and medium-sized startups and startup investment funds in accordance with the Law on Small and Medium Enterprises Assistance. Although the Law on Small and Medium Enterprises Assistance 2017 and guiding decrees have taken effect, it is not clear what procedures the foreign investors are required to do to set up a SME startup. It is necessary to wait for specific instructions for startup formation.

Moreover, according to the Law on Investment 2020, startup investment projects are included in the beneficiaries of investment incentives as recently added. Technology and intellectual property exploitation are two of subjects which are considered as startup projects. The technology sector, before the Law on Investment 2020 takes effect, has achieved a number of tax incentives for eligible enterprises, for example: enjoying enterprise income tax at rate of 10% for 15 year or tax exemption for four years, 50% reduction of taxable for the next nine years, not subject to value added tax. Furthermore, SME startups selected for SME support project are entitled to enjoy the following assistances: (i) consultation on intellectual property, intellectual property utilization and development; (ii) procedures for technical regulations and standards, quality measurement, testing and improvement of new products and business model; (iii) technology uses and transfers; (iv) training, information, trade promotion and commercialization; (v) use of technical facilities, incubators, and common working areas according to Decree No. 39/2018/ND-CP.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang, will help customers conveniently drafting contracts, Debt Recovery, Set up business, Foreign invest, Real estate ....

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Marriage and Divorce in Vietnam

 Vietnam family laws covers all legal matters concerning marriages and divorces, including marriage registration procedures, and divorce procedures, matters concerning separate or joint ownership assets and property, child custody, child support, and dispute on related matters.

Vietnam marriage laws have developed during the past 40 years and are still connected with changes in the thinking of the Vietnamese society and are thereby not exempt from future amendments that might appear simultaneously with the changes in Vietnam’s fast emerging society. The legal fundamental basis for marriages in Vietnam is the Marriage and Family Law. Some of the main points that are included in this law’s mission are for contributing to build and protect the marriage and family regime as well as to protect legitimate rights and interests of family members. The essential legal provisions of the Vietnam marriage law requires and determines: a required marital age for male is at least 20 years and female 18 years; marriages must be voluntary, progressive, monogamous marriages in which husband and wife are equal; marriages between partners of different nationalities, religions etc. are respected and legally protected but marriages between married people, people without civil act capacity, between the same direct blood line or within three generations, between (former) adoptive parents and children or parents- and children-in-law and stepparents and stepchildren, are forbidden. Although the marriage between persons of the same sex is not forbidden any more but the State shall not recognize it.

Furthermore, marriage or remarriages must be registered with the competent State bodies (registration offices) where either of the marriage partners resides. Vietnamese citizens living abroad shall refer to overseas Vietnamese diplomatic missions or consulates for services. Unless otherwise provided by law, the provisions of the Marriage and Family law also are also applicable for foreigners involved in Vietnamese marriages. In case a treaty to which the Socialist Republic of Vietnam is a contracting party contains provisions different from those of this Law, the provisions of such treaty prevail.

The registration procedures might differ in some points for foreigners because of the documents required from their home countries. Papers issued, granted or certified by competent foreign agencies for use in the settlement of cases and matters of marriage and family shall be notarized, legalized, except cases eligible for exemption from consular legalization under treaties to which the Socialist Republic of Vietnam is a contracting party or on the principle of reciprocity. Foreigners must demonstrate that they are eligible for marriage in compliance with the law of their home countries. According to the Vietnam Marriage and Family law, foreigners enjoy the same rights and obligations like Vietnamese and Vietnam provides protection for the legitimate rights and interests of Vietnamese living abroad in marriage and family relations in accordance with the law. In the case of a marriage between a foreigner and a Vietnamese, each one must abide by the legislation of his/her country on the marriage conditions. The law also bans marriages whereby foreigners take advantages related to human trafficking, sexually abuse against women.

The law on marriage and family has brought a positive change to the role of the family in Vietnamese society and the traditional values ​​of marriage and family. These legal provisions have contributed to the protection and perfection of a progressive marriage and family regime by creating legal standards that keep pace with the times but also respect long-standing traditional values ​​of Vietnam. However, Vietnam still lacks complex mechanisms to deal with all those involved and another problem is that some clauses are overlapping and are not clear enough to address outstanding issues such as: cohabitation system such as husband and wife, separated or surrogacy. Prenuptial agreements, premarital agreements or similar marriage contracts are not recognized in Vietnam. However, agreements on joint assets, or division of assets during marriage are recognized but certain procedures have to be followed.

Lawyers at ANT Lawyers have experience with registration of marriage, divorce procedures or dispute matters of assets, properties in Vietnam.

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Why Da Nang is a Place for Setting up Business?

 Da Nang has been creating flexible policies, good environments attracting foreign investors setting up company, building factory, and developing service business.

Da Nang is a social and economic center of central area of Vietnam with the role as the center of industry, trade and tourism and service. It is a seaport city, an important transport hub for the transit of domestic and international transportation. Presently, Da Nang has been rising as a comprehensive and sustainability developing city.

With the advantages of geographical location, people and nature, the leader of Da Nang is planning to build the city becoming a major tourist center of the country, developing tourism industry with entertainment centers and luxury resorts in Vietnam.

In practice, Da Nang has been reducing administrative procedures, creating favorable conditions for investors in obtaining certificate for investment. In the meantime, the city also supports investors understanding the information and maintaining direct dialogue mode with businesses leaders and managers in order to promptly assist any difficulties encountered by investors in the process of project implementation. Da Nang’s leaders are famous in being proactive in providing the latest information about the law in investment, especially information on the process of changing investment certificate… to facilitate the investment plan of the investors whom are investing in Da Nang. For investment projects in infrastructure construction using ODA capital, the city has been quickly implemented the clearance and compensation in time to hand over the project site to the investors as planned.

To ensure the tourism environment and sustainable development, the city focuses on attracting projects in high technology industry, supporting industry and services with high added value i.e. information technology, education, healthcare and logistics…, especially favouring clean and quality projects rather than large projects but are likely to cause environmental issues.

Along with economic development, Da Nang also has activities and measures for environmental protection by investing in building projects to protect and improve the environment such as: modernization the sewer and wastewater treatment system (JICA), building east-west economic corridor (ADB)… to ensure sustainable and long term development of the economy.

An important element for economic development is the local security. Da Nang has done a great job in maintaining public security in order to guarantee investors a stable and safe political, social environment for investors.

It can be seen that Da Nang converges suitable elements and really is a promising land for investors both domestic and international, to invest in entertainment, real estate, tourism, IT, healthcare, education services.

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How To Determine The Child Custody in a Divorce?

 Upon divorce, in addition to dispute over property division, child custody dispute is also popular. How to determine the child custody in a divorce depends on many factors and the parties are suggested to consult with dispute lawyers in Vietnam in civil matters. The following does not try to give legal advice but a brief opinions on the matters of concern for reference.

According to Vietnamese law, after a divorce, parents still have rights and obligations of looking after, caring for, raising and educating minor children or adult children losing their legal capacity or having no working capacity and no property to support themselves. The law always prioritizes agreement right of both parties. Accordingly, husband and wife shall reach agreement on the person who directly raises their children and on his and her obligations and rights toward their children after divorce. If they fail to reach agreement, the Court shall appoint one party to directly raise the children, based on the children’s benefits in all aspects. If a child is full 7 years or older, his/ her desire shall be considered. In addition, a under-36-months child shall be directly raised by the mother, unless the mother can not afford to directly look after, care for, raise and educate the child or otherwise agreed by the parents in accordance with the interests of the child.

In reality, opinion of the children is only regarded as orientation and reference for the Court to consider making decision, not as completely decisive meaning. The Court shall base on interests of the children to appoint one party to directly raise him/her, according to: living, current education of the children, occupation of the direct caretaker, accommodation condition after divorce, income, child care time… and some other elements of each party. Accordingly, the person being entitled to directly raise the children must prove themselves to provide the most favorable environment for normal development requirements of the children and have enough conditions for ensuring both economy and mental health. The person being entitled to directly raise the children must prove themselves to have enough material conditions (stable income, property, and accommodation…), mental condition (having enough time to be with the children, care for, raise them, always put the children at the forefront…) to make the children have more stable life and more developed than living with the other party. In addition, one of the parties can provide additional evidence to prove that the other party does not have enough material conditions and mental condition to raise the children or often has behaviors of violence, unstable income…

In case of request of a parent or individual, organization being entitled to request (Next of kin; The state management agency in charge of families; The state management agency in charge of children; The women’s union), the Court may decide to change the person directly raising a child. The change of the person directly raising a child shall be settled if there is one of the following grounds: (i) The parents agrees on change of the person directly raising a child in the interests of this child; (ii) The direct caretaker no longer has sufficient conditions to directly look after, care for, raise and educate the child. Like divorce settlement, desire of full-7-years or older child shall be considered in case of changing the person directly raising a child. Seeing that both parents fail to have sufficient conditions to directly raise a child, the Court shall decide to assign this child to a guardian.

Obligations and rights of indirect caretaker after divorce: (i) Respect the child’s right to live with the direct caretaker; (ii) Support this child; (iii) Visit and care for this child without being obstructed by any person after divorce. Direct caretaker is entitled to require the Court to restrict the right of the indirect caretaker if the latter takes advantage of his/her visit to and care for the child to prevent or adversely affect the looking after, care for, raising and education of this child.

In accordance with obligations and rights of indirect caretaker, direct caretaker also has obligations and rights toward indirect caretaker after divorce: (i) require the indirect caretaker to fulfill the obligations; (ii) require this person and family members to respect his/her right of raising the child; (iii) The direct caretaker and family members shall not prevent indirect caretaker from visiting, caring for, raising and educating this child.

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Mergers and Acquisitions

 Business and legal issues today are intertwined as never before.

The increasing globalisation of competition, the rise of emerging markets including Vietnam, the persistence of volatility, and the sharp increase in global regulatory scrutiny are some of the many factors that have led to an increase in strategic transactional activity—including acquisitions, disposals, mergers, strategic alliances, restructurings, spinoffs, IPOs, and joint ventures in Vietnam.

From a business point of view, today’s environment is more complex, more competitive, and more fast-paced than ever. From a legal point of view, it has never been more important to get the due diligence, tax, structuring, compliance and contracts right, from start to finish. And in this competitive environment, timing is more critical than ever.

That’s why it makes sense to work with a legal network whose service offering is embedded within the powerful capabilities, sector exposure, and footprint of a global business services leader. One who can quickly mobilise a co-ordinated, integrated, highly effective team to help you gain maximum value from your deal.

Innovative, business-focused legal solutions

ANT Lawyers’ legal services bring the best of both worlds to your strategic transactions.

We offer a wide array of integrated legal capabilities, along with deep cross-border deals experience, and the international and Vietnamese proficiency of M&A-focused corporate lawyers,

Whether you are working on the sell side or the buy side, cross-border or nationally, or on a small, midsize or large deal, we offer a full complement of transaction-focused legal services, including world-class due diligence, tax and legal structuring, contract negotiation, regulatory documentation, and advice on management-team incentive schemes.

One network, one global team: A seamless, co-ordinated approach

Our M&A lawyers work alongside leading practitioners from other divisions in tax, transactions, human resource services, corporate finance, investment funds and financial services regulation. Working as a single team, we can bring you innovative, integrated, commercially focused solutions to some of the most challenging business issues a company can face.

From letter of intent to the closing of the transaction, we maintain a rigorous focus on two things: the successful execution of every aspect of your deal, and capturing the maximum value for your organisation.

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10 Questions to Ask Before Setting up Company in Vietnam

 Foreigners are encouraged to make investment in Vietnam through direct investment by Setting up company in Vietnam.

However there are restrictions in some cases in regard to investment capital, investment area, special licenses required. The investor is suggested to consult with a law firms in Vietnam for advice and service offering.

Before setting up business in Vietnam, ask yourself the following questions:

1. Which business should I invest in Vietnam?

There are non-conditional investment areas and conditional investment areas. Establishing company in the non-conditional investment areas are more simple than in conditional investment areas. Investment in IT services, manufacturing, management consulting, business promotion are a few samples of non-conditional investment areas. Example of conditional investment areas are real estate, trading, travel agencies, freight forwarding… which are more complicated with investment conditions. Investment conditions might also be changed over the time depending on the WTO commitments which Vietnam enters.

2. What should I name the business in Vietnam?

The company in Vietnam has to have Vietnamese name, and English name. The company could also have abbreviated name. The name of the company in Vietnam indicates the structure of the company, the business lines, and the name that differentiate against other businesses. For instance, the company could be named Alpha consulting limited liability company.

3. Where should I register the address of the business in Vietnam?

Not every address could be used to register a company. The address has to be an address of a house with leasing agreement or office building which owner has license to operate as office building.

4. What is the legal structure of the company?

Depending on the number of investor contributing capital, company could be set-up as one member limited liability company or two ore more member limited liability company or joint stocks company.

5. How much capital is required to set-up a company in Vietnam?

The investment amount depends on the business plan and is subject to the approval of the provincial Department of Planning and Investment evaluating application dossier. In some business areas like real estate, banking and finance, minimum capital is required. In general for non-conditional investment area, the law does not specify the minimum capital to establish a company in Vietnam however the State agencies that evaluate investment plan could reject the investment project which are not feasible. Bank statement in foreign banks could be used to prove sufficient fund of investment capital.

6. Whom will be legal representative and work permit in Vietnam?

The investor will need to appoint the legal representative in Vietnam to oversee the business performance and take legal responsibility in Vietnam. If the legal representative is an expatriate, whom is a capital contributing member or owner of a limited liability company or a member of the Board of Management of a shareholding company which is registered to operate in Vietnam, he or she will be exempted from work permit in Vietnam. Otherwise, he or she will need to have a work permit to work in Vietnam legally. The work permit holder would then apply for temporary residence card to live in Vietnam as long as the work permit allows.

7. How long does it take to set-up a company in Vietnam?

It depends on what type, scale, and whether or not conditions are required. For a simple minimum capital without conditions to set-up, it would take 30 working days. For setting up company in conditional investment areas i.e. trading company in Vietnam, time would be lengthen due to the involvement of a number of State agencies approving the investment project and it would take 60 working days. For setting up company in other investments in areas requiring conditions to meet, time might be taken depending on the type of conditions and the government agencies evaluating the conditions of investment.

8. Whom will be granting the investment license in Vietnam?

For most of the investment projects, the provincial state agencies with the approval of the Department of Planning and Investment (DPI) will be granting the Investment Certificate in Vietnam. However, depending on the type, scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the case of trading company, ministry of trade and commerce, ministry of finance, provincial people’s committee will be reviewing the investment application dossier as well.

9. What are the tax liability in Vietnam?

Major taxes in Vietnam are corporate income tax, import and export tax, value added tax, and personal income tax in Vietnam. In some special areas, there are other taxes. The corporate income tax is currently at 22% and will reduce to 20% beginning 2016. Export is mostly encouraged as such the export tax is 0 however there are special cases when export tax is larger than 0. Import tax varies according to tariff. Value added tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal Income tax varies according to income level and is applicable from VND 9,000,000 above.

10. What are mandatory reports submissions requirement in Vietnam?

Companies are required to keep accounting books, prepare and submit tax reports on monthly, quarterly and annually. Foreign companies are also required to have financial audit taken before the financial year end. The financial year in Vietnam is from January to December and the deadline to submit financial report is March 30th for the previous year. Other reports are required to be submitted at other State agencies.

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