Vietnam 100% Foreign-Owned Company |
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A 100% foreign-owned company is an appealing option for many international investors in Vietnam, since it ensures full foreign management control. However, despite new laws introduced in 2006 to encourage foreign investment, entrepreneurs should be prepared for inconsistent regulations, bureaucratic challenges and licensing delays. The following information will help you determine whether a 100% foreign-owned Vietnamese company is the optimum corporate structure to fulfill your business objectives. |
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| Advantages of a 100% foreign-owned company | ||||||||||||||||
| 1. | A 100% foreign-owned company offers international entrepreneurs good access to local Vietnamese markets while retaining full control of their business. |
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| 2. | The Vietnamese government encourages 100% foreign investment in projects using the latest technologies, as well as export-orientated projects. |
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| 3. | The Vietnamese government offers tax incentives to 100% foreign-owned companies, including temporary tax holidays for some projects. If foreign investors reinvest their distributed profits, they are entitled to a refund of any profit tax already paid in respect to the amount of profit reinvested. |
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| 4. | The Vietnamese government recently abolished its double pricing system, whereby foreign-invested companies were required to pay higher statutory fees than Vietnamese-invested companies. |
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| 5. | A 100% foreign-owned company is exempt from duties when importing i) materials imported as the fixed assets of a company (e g machinery, manufacturing equipment etc); and ii) raw materials imported to be used in the production of export-orientated goods. |
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| 6. | A 100% foreign-owned company requires a minimum of one shareholder and one director. |
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| 7. | Vietnam joined the World Trade Organisation (WTO) in January 2007, under which it is obliged to protect the intellectual property rights of foreign investors. |
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| 8. | Healy Consultants can help clients obtain Vietnam residence visas for expatriate staff for a 100% foreign-owned company. |
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| 9. | Healy Consultants can open a corporate bank account in Vietnam for a 100% foreign-owned company. |
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| Disadvantages of a 100% foreign-owned company | ||||||||||||||||
| 1. | Entrepreneurs find Vietnam a difficult place to do business because of inconsistent regulations and costs, as well as bureaucracy. |
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| 2. | There are restrictions on the activities of a 100% foreign-owned company. According to Vietnam’s WTO Commitments, foreign investors who set up a company Vietnam can own 49% foreign ownership for foreign investment in the securities businesses until it is lifted in 2012, 51% foreign ownership for warehouse services and freight transport agency services until it is lifted in 2014 and 51% foreign ownership for maintenance and repair services of household equipment, which will be phased out entirely in 2012. |
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| 3. | A 100% foreign-owned company is taxed at a maximum rate of 25% on profits sourced in Vietnam and overseas. The corporation tax applicable to business establishments conducting exploration and exploitation of oil and gas and other valuable and rare natural resources is between 32% and 50%. Preferential corporation tax of 20% and 10%, in the form of incentives, apply if the enterprise meets specific criteria. |
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| 4. | A 100% foreign-owned company is required to submit audited annual financial statements. |
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| Healy Consultants fees for a 100% foreign-owned company | ||||||||||||||||
Our fees for a 100% foreign-owned company in Year 1 range from US$11,000 to US$21,000 depending on the corporate structure chosen and the range of professional services required from Healy Consultants. These fees include i) government License fees ii) virtual office fees iii) corporate bank account opening and iv) residence and employment visas. |
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| Contact Us | ||||||||||||||||
For additional information on a 100% foreign-owned company, email email@healyconsultants.com or call (+65) 6735 0120. |
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