What does a new company need to do in Vietnam?

Newly established businesses, after completing the procedures for applying for a business license, must promptly implement what the newly established company needs to do. Otherwise, it may be detected and sanctioned by competent state agencies, affecting the development of the newly established company. So what additional activities and procedures do businesses need to do after establishment? In this article, LSX legal firm will answer the question: “What does a new company need to do in Vietnam?”

Legal grounds

• Law on Enterprise 2020
• Law on Value-Added Tax
• Circular 37/2017/TT-BTC
• Law on Corporate Income Tax
• Law on Personal Income Tax
• Circular 06/2017/TT-BTC
• Circular 93/2017/TT-BTC

Post the announcement of the establishment of the business and hang the signboard

Post the establishment announcement

According to Article 32 of the Law on Enterprise 2020, after being granted an enterprise registration certificate, an enterprise must publicly announce it on the national business registration portal according to the order and procedures and pay fees as prescribed:

“Article 32. Publishing of enterprise registration information

1. After an enterprise is granted the Certificate of Enterprise Registration, it shall announce it on the National Enterprise Registration Portal and pay the fee as prescribed by law. The announcement shall include the content of the Certificate of Enterprise Registration and:

a) The enterprise’s business lines;

b) The list of founding shareholders and foreign shareholders (for joint-stock companies).

2. Any change to enterprise registration information shall be announced on the National Enterprise Registration Portal.

3. The information mentioned in Clause 1 and Clause 2 of this Article shall be published for 30 days.”

Hanging the signboard

Right after starting operation, enterprises need to make signboards and hang them at the company’s head office address. The size of the sign depends on each company, however, it must have information about the business name, address, business code, and phone number.

According to the law, a Company signboard is a necessary condition to be able to carry out the procedure of ordering invoice printing for the first time.

Declare taxes and pay license tax

Declare and pay license tax

• Firstly, for a newly established company without having any production and business activities, the company must submit the declaration and the license tax within 30 days from the date of issuance of the business registration certificate.
• In contrast, if the new company established and has production and business activities. Then, the latest deadline is the last day of the month of an establishment according to the business registration certificate.
• Businesses established in the first 6 months of the year: must pay the license tax for the whole year
• Businesses established in the last 6 months of the year (from July 1 to the end of the year): pay 1/2 year of license tax.

License tax declaration dossier: License tax declaration for businesses according to form 01/MBAI.

Declare Value-Added Tax (VAT)

Newly established businesses declare VAT quarterly and declare according to the direct method.
After operating for the full 12 months, based on the turnover of the preceding calendar year (full 12 months) to determine VAT declaration monthly or quarterly: If > 50 billion, declare by month. If < 50 billion, declare quarterly.
If a newly established enterprise wants to declare according to the deduction method, then there must be a contract to lease the business location or an input invoice for the purchase of fixed assets, machinery, equipment, tools, and instruments. Besides, the enterprise must submit form 06/GTGT.

Declare Corporate Income Tax (CIT)

CIT shall be provisional declared on a quarterly basis, annual finalization statement, and declare final settlement up to the time of a decision on the division, separation, consolidation, merger, conversion of ownership, or dissolution of the enterprise.

• Quarterly provisional CIT declaration: The deadline for submitting a quarterly CIT declaration is the 30th day of the quarter following the quarter in which the tax liability arises.
• CIT finalization declaration: The deadline for submitting the annual tax finalization declaration is the 90th day from the end of the calendar year or the end of the fiscal year.

On the other hand, dossiers of the CIT finalization declaration include:

• CIT finalization declaration (under form No. 03/TNDN and the attached appendices)
• Annual financial statements if the financial year ends; or Financial statements up to the date of the decision on the enterprise’s separation, consolidation, merger, conversion of ownership form, dissolution.

Declare Personal Income Tax (PIT)

Newly established businesses will have to declare VAT on a monthly basis, so we will consider two cases as follows:\

• If the payable PIT amount is > 50,000,000 in the month in which the payable PIT amount is incurred, the declaration shall be made monthly.
• If the payable PIT amount is more than 50,000,000 in the month in which the payable PIT amount is incurred, the declaration shall be made quarterly.

On the other hand, companies don’t have to declare if no tax deductions appear in the month or quarter. However, they still have to submit the annual finalization declaration (form 05/KK-TNCN).

Invoice

If the enterprise declares VAT according to the deduction method:
Order to print VAT invoices. Then make the Invoice Issuance Notice: At least five (05) days before the enterprise starts using the invoice and within ten (10) days from the date of signing the issuance notice.

If the enterprise declares VAT according to the direct method:
The companies must carry out procedures to buy sales invoices directly at the tax authority (a regular sales invoice, not a VAT invoice).
Note: Newly established businesses must make quarterly reports on the use of invoices according to form BC26/AC.

Bank account

Enterprises need to open a bank account to transact with customers when they have input invoices valued at 20 million VND or more (VAT included).
Enterprises must open a bank account and notify the bank account number to the Department of Planning and Investment where the enterprises located.

Labor and Social Insurance

Newly established enterprises (especially private companies, rare for joint-stock companies and limited liability companies) with 10 or more employees should note that enterprises that sign contracts with qualified employees for the period of 3 months or more will have compulsory social insurance participation.
Also, enterprises need to contact the social insurance agency to make a dossier of payment of social insurance contributions for employees and make a salary scale according to the form of the salary scale system to submit to the social insurance agency according to the form.
Lastly, the time limit for paying social insurance premiums for employees: within 30 days from the effective date of the labor contract.

Related articles

• Advantages and disadvantages of the partner company in Vietnam
• Procedures to establish electronic components company in Vietnam
• Service of setting up a seafood production company in Vietnam

Related questions

Contact LSX

Finally, hope this article is useful for you to answer the question about “What does a new company need to do in Vietnam?”. If you need any further information, please contact  LSX Law firm: +84846175333 or Email: [email protected]

Conclusion: So the above is What does a new company need to do in Vietnam?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com