Things to know when foreigners open a company in Vietnam

by BichNgoc

Over the years, Vietnam has become one of the special countries attracting investment from all over the world. Every month, thousands of foreign-invested enterprises are newly established in Vietnam. Investors can come from all over the world, typically countries from East Asia such as Korea, Japan, China, ASEAN countries, and from the US and Europe. With an increasingly dynamic environment, attractive hiring and labor policies. Vietnam has become one of the countries attracting the highest number of foreign investors in the region. Today, LSX Lawfirm will give you an article about: “Things to know when foreigners open a company in Vietnam:, as follows:

Law on investment 2020

When foreigners open a company in Vietnam

Accordingly, Foreign investor means an individual or organization as defined by the Law on Investment.

  • Firstly, “Investor” means an organization or individual that carries out business investment activities. Investors include domestic investors, foreign investors and foreign-invested business organizations.
  • Secondly, “Foreign investor” means an individual holding a foreign nationality or an organization established under foreign laws and carrying our business investment activities in Vietnam.
  • Thirdly, “Domestic investor” means an individual holding Vietnamese nationality or a business organization whose members or shareholders are not foreign investors.
  • Then, “Business organization” means an organization established and operating in accordance with Vietnam’s laws. Business organizations include enterprises, cooperatives, cooperative unions and other organizations that carry out business investment activities.
  • Finally, “Foreign-invested business organization” means an organization whose members or shareholders are foreign investors.

Things to know when foreigners open a company in Vietnam

Forms of investment when foreigners open a company in Vietnam

1. Investment in establishment of a business organization.

2. Investment in the form of capital contribution or purchase of shares or stakes.

3. Execution of an investment project.

4. Investment in the form of a business cooperation contract.

5. New forms of investment and types of business organizations prescribed by the Government’s regulations.

You can refer to article related to “Things to know when foreigners open a company in Vietnam’: Can foreigners set up businesses in Vietnam?

  • Direct investment:
    Investment in the form of establishing an economic organization with 100% foreign investment capital or establishing an economic organization with foreign investment capital (under 100% foreign capital).
  • Indirect investment:
    Investment in the form of capital contribution, share purchase, purchase of capital contribution to economic organizations in Vietnam.

Thus, the Investment Law 2020 compared to that of 2014 adds a new form of investment, which is “Implementation of an investment project and does not stipulate that the PPP contract is an investment form”.

PPP contract stands for Public Private Partnership, is an agreement agreement between the State and the private sector in investment, infrastructure development and public service provision. Accordingly, part or all of the work will be transferred by the State to the private sector for implementation with the support of the State.

BCC contract stands for Business Cooperation Contract, is a contract signed between members of the Investor, in order to cooperate in business to share products and profits without establishing economic organizations.

Things to know when foreigners open a company in Vietnam

Firstly, Schedule of WTO Commitments.

Secondly, Nationality of Foreign Investor.

Thirdly, about choosing the form of foreign investment.

Fourthly, Sequence of basic foreign investment procedures.

Fifthly, Documents and papers Foreign investors need to prepare.

Sixthly, Issues on registration of investment capital, contributed capital, charter capital for company establishment.

Finally, some other issues related to foreign investment.

Related questions about “Things to know when foreigners open a company in Vietnam”

Are foreign-invested companies eligible for investment incentives?

Yes. However, foreign-invested companies are only entitled to the same investment incentives as Vietnamese enterprises.

What taxes must a foreign-invested company pay?

Like Vietnamese-owned enterprises, foreign-invested companies also have to pay some basic taxes as follows: Value-added tax, license tax, corporate income tax, import-export tax (if any) import and export activities). etc.

When is the establishment of a foreign-owned company required to issue an investment certificate?

When investors contribute capital at the beginning of company establishment from 1% to 100% of charter capital and when foreign investors purchase capital contribution, buy shares in Vietnamese companies operating in every field.Things to know when foreigners open a company in Vietnam

Contact LSX Lawfirm

Finally, hope this article is useful for you to answer the question about: “Things to know when foreigners open a company in Vietnam”. If you need any further information, please contact  LSX Law firm : +84846175333 or Email: hoangson@lsx.vn

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