HOW FOREIGNERS COULD WORK IN VIETNAM LEGALLY

Foreigners working in business set-up in Vietnam are expatriates which are normally required work permit in Vietnam.

As the Vietnam law’s restrictions to encourage employment of local employee over foreign employee, normally, the employment of an expatriate is limited to a managerial position or to a position which Vietnamese employee are not yet qualified.

There are exemption of work permit in Vietnam as following cases:

A capital contributing member or owner of a limited liability company which is registered to operate in Vietnam;
A member of the Board of Management of a shareholding company which is registered to operate in Vietnam;
A chief of a representative office or of a project of an international organization or a non-governmental organization in Vietnam;
The foreigner enters Vietnam for less than three months to offer services;
The foreigner enters Vietnam to work for less than three months or to handle an emergency case and that cannot adequately be addressed within Vietnam;
A lawyer who has received a Certificate for the practice of law in Vietnam granted by the Ministry of Justice;
The foreigner is a student studying and working in Vietnam;
An intra-corporate transferee working in Vietnam;
The foreigner provides expert and technical consultancy services or undertakes other tasks with respect to research, formulation, evaluation, monitoring and assessment, management and implementation of a program or project using official development aid (“ODA”);
The foreigner has a media license issued by the MOFA;
The foreigner is appointed by a competent authority of a foreign country to teach at an international school which is managed by a foreign diplomatic office or an international organization in Vietnam;
The foreigner a volunteer;
The foreigner has a master’s degree or higher or similar qualifications and provides consultancy, teaching, or conducts scientific research at a university or vocational college for a period not exceeding thirty (30) days; or
The foreigner implements an international agreement signed by a Vietnamese government authority, a provincial body or a central socio-political organization.

In order for an expatriate to be exempted from a work permit, the employer must file an application with the provincial labor authority.  Chairman of the provincial People’s Committee will be consulted and if approval, he/she will issue a written consent to each employer regarding the employment of expatriate.

In order to ensure compliance in immigration, labor employment, foreign owned enterprises are suggested to consult with employment lawyers in Vietnam.  We at ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City would be able to assist clients in employment matters and could be reached at email: ant@antlawyers.vn or office tel: +848 35202779.

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HOW FOREIGN INVESTORS COMPLY WITH REPORTS SUBMISSIONS IN VIETNAM

Foreign investors setting up business in Vietnam have to comply with statistics report submissions according to Vietnam laws.  To ensure compliance, corporate lawyers should be consulted to ensure compliance with reports applicable to foreign owned enterprises in Vietnam.

As the current regulation, foreign owned enterprises are obliged to submit monthly, quarterly, six month and annual reports to the Vietnam Department of Statistics or State agency for foreign direct investment of respective province or city.

Monthly reports are applicable to businesses and projects operating in the industry: mining, processing industry, electricity, gas, water supply, waste disposal, water treatment, information and communications, real estate, transport, warehousing, trade and services.

Quarterly reports are applicable to businesses and projects operating in agriculture, forestry and fisheries, construction;

All foreign owned enterprises have to report every 6 months on employment and income of the employee;

On annual basis, all foreign owned enterprises have to submit reports on the identification information of the business; financial indicators reflecting business results including revenue by business lines, taxes, fees, expenses, and profit; and capital investments made during the year by investment sources and investment category.

We at foreign investment practice of ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City would be able to assist clients in regulatory and licensing matters relating to the investment and the operation of the foreign investor enterprises in Vietnam.  We could be reached at email:ant@antlawyers.vn or office tel: +848 35202779.

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WHERE FOREIGN INVESTORS OBTAIN INVESTMENT LICENSE IN VIETNAM?

To set up a business in Vietnam through foreign direct investment, foreign investors need to register the investment license from Vietnam Ministry of Planning and Investment (MPI).

Depending on investment business lines, investment conditions, scale of the projects, where investment project is located, other Vietnam State authorities would be involved.  MPI in Vietnam takes charge of developing legislation, guiding, consulting and coordinating with other State authority in regard to all investment in Vietnam.  Foreign investors apply for investment license at MPI which is acting as the contact point.  People’s Committee will be the government body that administer investment activities within its city or province and issue the investment license to the foreign investor.

In case the foreign investor setting-up  a business within an industrial zone, the management board of an industrial zone will have authority over the investment licensing process. For investment project which is larger than VND 300 billion (around USD 14.2 million) or in conditional investment area, MPI and other ministries will be involved in the evaluation process to recommend to the Prime Minister for approval.  Other ministries involved in investment project licensing would be Ministry of Trade and Commerce and Minsitry of Finance for settting up a trading company in Vietnam; Ministry of Science and Technology for investment in high-tech projects in Vietnam; Ministry of Education and Training for setting up education institute; Ministry of Health for investment in hospital in Vietnam, etc to ensure they are complying with the specific industry’s regulations.

At ANT Lawyers, a law firm in Vietnam with law offices in Hanoi and Ho Chi Minh City, we are able to assist clients in licensing and post-licensing matters to help clients with all questions and services in setting up and maintaining the company in Vietnam. We could be reached at email: ant@antlawyers.vn or office tel: +848 35202779.

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HOW FOREIGN ENTITY COULD SET-UP A BRANCH OFFICE IN VIETNAM

A foreign business entity or a foreign trader is allowed to set-up a branch in Vietnam to conduct business activities.

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam.  A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself.  The Vietnam Department of Industry and Trade will be approving the establishment of a branch in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to as the “Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its licence for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the Branch.

1. Rights of the Branch

• To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.
• To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.
• To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.
• To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.
• To remit profits abroad in accordance with the law of Vietnam.
• To have a seal bearing the name of the branch in accordance with the law of Vietnam.
• To conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

2. Requested conditions for establishment the Branch in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the Branch in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

• Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;
• Having been operating for at least five years after its lawful establishment or business registration.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department  after the foreign company meets all of conditions as Vietnam legal requirements.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

At ANT Lawyers, a law firm in Vietnam with offices in law office Hanoi and Ho Chi Minh City, we are available to assist clients in licensing and post-licensing matters to help clients with all questions and services in setting up and maintaining the company or other form of business entities in Vietnam. We could be reached at email:ant@antlawyers.vn or office tel: +848 35202779.

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HOW TO ESTABLISH A COMPANY IN VIETNAM

Foreign investors may invest in the form of 100% capital to establish a limited liability company, joint stock company, partnership company or other forms in investment in Vietnam.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates.  Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier for establishing a company in Vietnam shall comprise:

• Registration/Request for issuance of Investment Certificate;
• A report on financial capability of the investor;
• Draft of the company’s charter;
• List of members of company: a) copy of the people’s identity card, passport or other lawful personal certification, for individual members; b) copy of the establishment decision, business registration certificate or other equivalent document, for member organizations; copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives. Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;
• Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;
• The joint-venture contract or Business Cooperation Contract (BCC);
• Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days.  The extra time might be needed in case the investment area is conditional or the State government needs to examine the investment project.  Minimum capital, special licenses or other conditions might be required in certain investment projects.

At ANT Lawyers, a law firm in Vietnam with law offices in Hanoi and Ho Chi Minh City, we are available to assist clients in establishing foreign owned company in Vietnam.  We could be reached at email: ant@antlawyers.vn or office tel: +84 912 817 823.

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HOW FOREIGNERS COULD WORK IN VIETNAM LEGALLY

Foreigners working in business set-up in Vietnam are expatriates which are normally required work permit in Vietnam.

As the Vietnam law’s restrictions to encourage employment of local employee over foreign employee, normally, the employment of an expatriate is limited to a managerial position or to a position which Vietnamese employee are not yet qualified.

There are exemption of work permit in Vietnam as following cases:

A capital contributing member or owner of a limited liability company which is registered to operate in Vietnam;

A member of the Board of Management of a shareholding company which is registered to operate in Vietnam;

A chief of a representative office or of a project of an international organization or a non-governmental organization in Vietnam;

The foreigner enters Vietnam for less than three months to offer services;

The foreigner enters Vietnam to work for less than three months or to handle an emergency case and that cannot adequately be addressed within Vietnam;

A lawyer who has received a Certificate for the practice of law in Vietnam granted by the Ministry of Justice;

The foreigner is a student studying and working in Vietnam;

An intra-corporate transferee working in Vietnam;

The foreigner provides expert and technical consultancy services or undertakes other tasks with respect to research, formulation, evaluation, monitoring and assessment, management and implementation of a program or project using official development aid (“ODA”);

The foreigner has a media license issued by the MOFA;

The foreigner is appointed by a competent authority of a foreign country to teach at an international school which is managed by a foreign diplomatic office or an international organization in Vietnam;

The foreigner a volunteer;

The foreigner has a master’s degree or higher or similar qualifications and provides consultancy, teaching, or conducts scientific research at a university or vocational college for a period not exceeding thirty (30) days; or

The foreigner implements an international agreement signed by a Vietnamese government authority, a provincial body or a central socio-political organization.

In order for an expatriate to be exempted from a work permit, the employer must file an application with the provincial labor authority.  Chairman of the provincial People’s Committee will be consulted and if approval, he/she will issue a written consent to each employer regarding the employment of expatriate.

In order to ensure compliance in immigration, labor employment, foreign owned enterprises are suggested to consult with employment lawyers in Vietnam.  We at ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City would be able to assist clients in employment matters and could be reached at email: ant@antlawyers.vn or office tel: +848 35202779.

Read More

HOW FOREIGN INVESTORS COMPLY WITH REPORTS SUBMISSIONS IN VIETNAM

Foreign investors setting up business in Vietnam have to comply with statistics report submissions according to Vietnam laws.  To ensure compliance, corporate lawyers should be consulted to ensure compliance with reports applicable to foreign owned enterprises in Vietnam.

As the current regulation, foreign owned enterprises are obliged to submit monthly, quarterly, six month and annual reports to the Vietnam Department of Statistics or State agency for foreign direct investment of respective province or city.

Monthly reports are applicable to businesses and projects operating in the industry: mining, processing industry, electricity, gas, water supply, waste disposal, water treatment, information and communications, real estate, transport, warehousing, trade and services.

Quarterly reports are applicable to businesses and projects operating in agriculture, forestry and fisheries, construction;

All foreign owned enterprises have to report every 6 months on employment and income of the employee;

On annual basis, all foreign owned enterprises have to submit reports on the identification information of the business; financial indicators reflecting business results including revenue by business lines, taxes, fees, expenses, and profit; and capital investments made during the year by investment sources and investment category.

We at foreign investment practice of ANT Lawyers, a law firm in Vietnam with offices in Hanoi and Ho Chi Minh City would be able to assist clients in regulatory and licensing matters relating to the investment and the operation of the foreign investor enterprises in Vietnam.  We could be reached at email:ant@antlawyers.vn or office tel: +848 35202779.

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WHAT FOREIGN INVESTORS NEED TO KNOW ABOUT TAXES IN VIETNAM

Foreign investors whom set-up company in Vietnam always face challenges to understand the tax system in Vietnam. The below briefly explains type of taxes in Vietnam for regular enterprises. In special cases, foreign enterprises are suggested to consult with tax lawyers in Vietnam before establishment and during the operation to ensure compliance.

Major taxes which enterprises including both local and foreigners are subject to are corporate income tax, import and export taxes, and value added tax, and their employees are subject to personal income tax. Other taxes might be applicable depending on nature of business, such as natural resource tax, special consumption tax, and foreign contractor tax.

Corporate income tax (CIT) is governed under Vietnam Law on Corporate Income Tax. CIT is calculated by multiplying assessable income with the CIT rate. Assessable income is the difference between sales revenue and deductable expenses. In general, CIT tax rate in Vietnam is currently 22% and will be reduced to 20% starting Jan 1st, 2016.

Export and Import tax are governed under Vietnam Law on Export tax and Import tax. Export of finished goods is encouraged and export tax is 0%. Import tax will be as import tax tariff published by the government unless exempted for reasons of import to process for export, import to create fixed assets other other cases as the laws regulated.

Value added tax (VAT) is governed under Vietnam Law on Value added tax, applicable to goods and services sold in Vietnam. VAT is calculated by multiplying taxable price and VAT rate. The most common VAT rate is 10%. The rate level of 5% and 0% are applicable in certain cases.

Personal income tax (PIT) is governed under Vietnam Law on Personal income tax. Tax payers are resident, which taxable income includes income generated both inside and outside of Vietnam; and non non-resident, which taxable income includes income generated from Vietnam, regardless of the place where it is paid or received.

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INVESTMENT INCENTIVES FOR IT AREA IN VIETNAM

Vietnam is attracting investors from around the world to make investment through setting up IT service company in Vietnam.

Since 2010, Vietnam has initiated and invested more resources in the information technology which has been realized as an area that could create a competitive edge for Vietnam.  Recently, the Vietnam government has put a legal frameworks to attract more investment in this area, with the issuance of Decree No.154/2013/ND-CP, taking effect from Jan 1st, 2014 guiding particularly on management of the focused information technology areas.

Accordingly, the enterprises at focused information technology areas will enjoy tax benefits i.e. income tax rate of 10% within 15 years, in some specific cases, extended to 30 years; exempt 50% within 5 continuous years. They are exempted the import tax when importing goods to build fixed properties, manufacture such as machines, equipment, parts, assembles.

Besides, these enterprises may enjoy convenient conditions in customs procedure, incentives in export tax, investment credit, import credit and favorable policies for enterprises business in high technology area.

The focused information technology area must have at least 2,000 employees specialized in information technology; in case of emphasizing in software manufacture, digital content, information technology service, 1,000 specialized employees will be employed at least. 

If you need help to set up IT company in Vietnam, please contact us at ant@antlawyers.vn or call + 848 35202779.

ANT Lawyers is a Vietnam law firm with international standards, recognized by IFLR1000 on Financial and Corporate practice. We are an exclusive Vietnam member of Prae Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services as following to multinational and domestic clients.

Commercial

Dispute Resolution

Debt Recovery

Employment

Foreign Investment

Intellectual Property

International Trade and Taxes

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ADDING FOREIGN SUBJECTS TO OWN RESIDENT HOUSES IN VIETNAM

The Draft Law on House (amended) has currently taken lots of attentions of not only investors but residents. One of the significant amendments is provision on house ownership of foreign organizations, individuals.

According to Articles 161, 162, 163 of Draft Law, there are 3 cases that the foreigners may own resident houses in Vietnam as following:

1. Foreign organizations, individuals invest the construct resident houses according to projects for sale, lease, hire-purchase sale.
2. Foreign owned enterprises, branches, representative offices of the enterprises without business in real estate, foreign investment funds and branches of foreign banks permitted to operate in Vietnam are entitled to buy, donate, inherit the commercial houses in projects of resident housesdevelopment, new urban areas, tourism real estate.
3. Foreign individuals who are allowed to enter Vietnam, not belong to incentive rights, diplomatic or consular immunity.

However, subjects at section 2 and 3 are eligible to own houses in maximum term of 70 years, from the issuance date and can extend according to laws at that moment. They are not allowed to buy and own social houses, just buy and own commercial houses. They are also eligible to own unlimited number of commercial houses in commercial resident house development projects, new urban area or tourism real estate. These new provisions will become important points for real estate market in Vietnam. Especially, the foreign individuals are allowed to enter Vietnam, entitled to buy and own resident houses in Vietnam. It’s expected to make a big change in real estate in Vietnam when the new Law on House (amended) is adopted. ANT Lawyers,your lawyers in Vietnam.

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