In our modern life, there are people who are too busy with work and have no time to do things like laundry, sweeping, cleaning the house. For these people, the laundry shop is such a lifesaver. Therefore, in big cities, there are more and more laundry shops in apartments and residential areas. Besides, foreign businesses also can not ignore this “fertile” market when a number of laundry chain stores have come into operation and impressed customers. Through the following article, LSX Law firm will inform you of the necessary procedures for setting up a laundry company with foreign capital
- Enterprise Law 2014
- Investment Law 2013
During the process of global economic integration, Vietnam has made efforts to improve the business investment environment for foreign investors. The evidence is the ease up of legal regulations on business conditions for many industries and fields to attract capital from abroad. Besides business lines that foreign investors can freely carry out investment activities to contribute capital to establish companies. There are still business lines that are required by law for foreign investors to meet certain conditions in order to be eligible for permission to participate in investment and business.
The dry cleaning service business is one of the conditional business lines for foreign investors, regulated by the Ministry of Planning and Investment. However, at the present time, in order to implement the policy of increasingly loosening business conditions for business lines and fields, the Ministry of Planning and Investment has removed the mandatory conditions for foreign investors investing in dry cleaning, laundry business.
However, in order to conduct business investment activities, foreign investors still have to comply with and carry out procedures for foreign investors in accordance with the provisions of the investment law. Specifically, a foreign investor can invest in two forms as follows:
First, Contributing capital to establish enterprises in Vietnam
For this form, Article 22 of the Investment Law 2014 stipulates:
” Investors may establish economic organizations in accordance with the law. Before establishing an economic organization, a foreign investor must have an investment project and carry out procedures for issuance of an investment registration certificate…”
Thus, in order to contribute capital to establish an enterprise, Foreign investors must carry out procedures for applying for an Investment Registration Certificate. The detailed steps of this procedure have been mentioned by us in the article on Procedures for establishing a foreign-invested company, you can click on the link to find out the details of this procedure. However, this is a complicated and time-consuming procedure for investors. Therefore, in order to save time and effort, foreign investors can invest in dry cleaning, laundry service business in another way.
Secondly, form joint venture with Vietnamese enterprises.
This is the case when a foreign investor buys contributed capital and shares of a Vietnamese company. For this option, a foreign-invested company, even though its members are foreign investors, doesn’t have to carry out procedures for the issuance of an investment certificate. When an enterprise does not have an investment certificate, the procedures for changing the business registration contents with the state agency are more simple. In addition, when implementing this form, there are additional advantages such as:
- Simple procedures: When an enterprise only has an enterprise registration certificate, it only has to do procedures like a typical Vietnamese enterprise;
- Not having to perform the obligation to report on project implementation, investment supervision reports, etc.;
- There is no need to carry out the procedures for updating investment information on the investment management system.
With this form, foreign investors can still fully hold the entire charter capital and take control of the business by hiring a qualified person to establish a business in Vietnam, after having been granted the Certificate of Enterprise Establishment, the foreign-invested enterprise shall redeem the contributed capital/shares of the newly established enterprise. There is no limit on the amount of capital contribution/shares that a foreign-invested enterprise can buy under current law. In the next part, we will guide you through the procedures for setting up a laundry company with foreign capital
Procedures for establishing a joint venture
Step 1: Establishing a Vietnamese company;
The company’s establishment dossier includes:
- Business registration application form;
- Company charter;
- List of members of a limited liability company or a list of shareholders of a joint-stock company;
- A valid copy of one of the following documents:
– A valid ID card or a valid Passport for individuals;
– Certificate of business registration for the organization with personal identification papers, written authorization of the authorized representative of the organization;
– Decision on capital contribution for company members, company shareholders being organizations;
– Power of attorney to perform company establishment services for organizations and individuals (if authorized)
Place of application: Department of Planning and Investment where the enterprise is headquartered.
Term: 03 – 06 working days.
Result: Certificate of business registration.
Step 2: Transfer of contributed capital to foreign investors;
- Written registration for capital contribution, share purchase, and capital contribution (Form I-6 of Official Letter No. 4326/BKHĐT-ĐTNN on receiving procedures and forms for carrying out activities under the Investment Law) private);
- A copy of the identity card, identity card, or passport for the investor being an individual; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investing organization;
- In case the investor authorizes another person to submit the application and receive the result, the person who carries out the procedures for submitting the application and receiving the result of handling the investment registration procedure must present his/her personal identification paper and the investment registration certificate. the following documents:
– Service contract between the Investor and the service organization providing the application, receiving the results and the recommendation letter from that organization for the individual to submit the application and receive the results; or
– A written authorization for the individual to submit the application and receive the results as prescribed by law.
Receiving agency: Investment registration office where the enterprise’s head office is located.
Processing time: 15-25 working days from the date of receipt of valid dossier.
Results of administrative procedures: Notification document
Hope this article is useful for you to find out more about the procedures for setting up a laundry company with foreign capital, If you need any further information, please contact LSX Law Firm: 0833102102
Frequently asked questions
So, what are the taxes that a foreign-invested company must pay?
Foreign-invested companies must pay some basic taxes such as License tax, Corporate Income tax, Value Added Tax. In addition, for specific business activities, foreign-invested companies may be subject to Special Consumption Tax, Export Tax, Import Tax, etc. In the case of paying salaries to employees, The employer is obliged to declare and pay personal income tax on behalf of the employee monthly, quarterly, or each time it is incurred.
So, Are foreign-invested companies entitled to tax incentives?
In order to attract foreign investors to invest in Vietnam; investment incentives in general and tax incentives, in particular, are constantly being updated from time to time; create favorable conditions for foreign investors with many different investment fields. Preferential taxes such as corporate income tax; v.a.t tax; import duties and some other taxes.