According to the provisions of current law, individuals and organizations have the right to establish their own companies if they have satisfied all the conditions of the law. The establishment of companies has become a popular activity due to the development of the market. To give you an insight into this issue, LSX legal firm would like to answer the question: “Why should you establish a company in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 47/2021/ND-CP
Why should you establish a company?
- Firstly, when opening a company, you have the right to decide, the right to manage, and the right to own your business.
- Secondly, opening a company will bring a big turning point in the process of your own business. Establishing a company to do business can help your brand and products to be known by many people, trusted, and used by many people, thereby bringing more profits.
- Thirdly, opening a company means expanding the business. Instead of just opening 1 or 2 more small retail branches, you can set up a whole company specializing in trading items, products, and services.
- Fourthly, starting a company will create jobs for many other people.
- Also, a Vietnamese company with valid legal status will enjoy benefits in accordance with Vietnamese law.
- Registering to open a company means that you operate under regulations as well as the protection of the law, and your business process becomes serious.
- Moreover, when opening a company, the law will protect the brand of products and company that you do business with. Other businesses do not have the right to take your trademark to conduct business.
Benefits of setting up a company
- When your company does business legally, it will be allowed to do business by the state and protected by law, avoiding bad things that can happen in business such as disputes.
- Having a seal used exclusively to sign and carry out transactions in sales contracts to make the purchase and sale more secure.
- When your company is established, customers will trust and feel more secure when dealing with your company, this is the common mentality of many people.
- Supported forms of capital after going into operation.
- Your company has legal status in the field of business.
- Used and circulated financial invoices.
- You will have credibility and easily promote your image to consumers.
- Create benefits for society when developing business.
Content of the company registration application form
1. The enterprise’s name;
2. The enterprise’s headquarters, phone number, fax number, email address (if any);
3. The enterprise’s business lines;
4. The charter capital (or investment capital if the enterprise is a sole proprietorship);
5. Types of shares, face value of each type and total authorized shares of each type if the enterprise is a joint stock company;
6. Tax registration information;
7. Expected quantity of employees;
8. Full name, signature, mailing address, nationality and legal documents of each partner (for partnerships) or the owner (for sole proprietorships);
9. Full name, signature, mailing address, nationality and legal documents of the legal representative (for limited liability companies and joint stock companies).
Kinds of taxes you have to pay when opening a company
Firstly, license tax when establishing a company
You must pay this tax once a year according to the charter capital; The tax rate according to the tax schedule is prescribed at the following rates:
- Level 1 registered capital 10 billion or less: license tax payable: 2 million/year.
- Level 2 of registered capital over 10 billion in license tax payable: 3 million/year.
- The level of the license tax for dependent accounting units: 1 million.
Secondly, value added tax (VAT) paid when the business generates revenue on red invoices
This tax is paid based on the revenue of goods and services sold from the red invoice and the number of goods and services revenue of the company’s purchased red invoice.
Therefore, when doing business, you will have to balance input and output costs reasonably to reduce the amount of VAT.
Thirdly, corporate income tax (CIT)
Pay at the end of the fiscal year in which the business has profits:
Your business needs to declare this tax and pay it quarterly; At the end of the year, the annual corporate income tax finalization will be paid at the rate of 20%.
If the net revenue less than zero and the business suffer a loss, then it will not have to pay corporate income tax.
Fourthly, environmental tax
This fee used for the purpose of environmental improvement and waste treatment where the business operates. If the business does not do business that affects the environment, it does not need to pay the environmental tax.
Fifthly, import and export tax
Payable only when your business relates to the field of import and export.
Lastly, land use tax
Payable only when the enterprise has leased land from the state. Every year your company has to pay land use taxes to the state.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
The company does not generate revenue from the business, but it still has to pay CIT if the company generates other legal revenue belonging to the income subject to corporate income tax (CIT).
The trademark protection title is valid from the date of issue to the end of 10 years from the filing date. Besides, when it expires, the owner can extend it further, without limiting the number of extensions.
Firstly, register the investment project
Secondly, apply for Certificate of investment registration
Thirdly, apply for the certificate of business registration
Fourthly, publish the content of the business registration
Then, registered business stamp
Next, notice of use of stamp
Equally important, open bank account
After all, the post licensing procedures
Contact LSX
Finally, hope this article is useful for you to answer the question about “Why should you establish a company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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