DOING BUSINESS IN VIETNAM IN 2023
Since 2003, Healy Consultants Group assists our Clients with Vietnamese business set up. Our services include i) Vietnam company registration ii) determining the optimum regulatory licence iii) multi-currency corporate bank account opening iv) employee recruitment and residence visa strategies and v) office rental and warehousing solutions.
| Compare different Vietnam entities | Fast solution LLC | Foreign-owned company | Free zone LLC | Representative office | Local company | Joint venture |
|---|---|---|---|---|---|---|
| Best use of company? | Timely secure contracts | Unrestricted industries | Manufacturing and export | Research and marketing | All purposes | Restricted industries |
| How soon can you invoice Clients\sign sales contracts? | 1 month | 4 months | 3 months | N/A | 1 month | 3 months |
| How soon can you hire staff? | 1 month | 4 months | 3 months | 3 months | 1 month | 3 months |
| How soon can you sign a lease agreement? | 1 month | 4 months | 3 months | 3 months | 1 month | 3 months |
| Travel required for business setup? | No | No | No | No | No | No |
| Recommended paid up share capital? | US$50,000 | US$50,000 | US$50,000 | N/A | US$100 | US$50,000 |
| Can secure trade finance? | Yes | Yes | Yes | Yes | Yes | Yes |
| Can bid for Government contracts? | Yes | Yes | Yes | Yes | Yes | Yes |
| Corporate bank account location? | Citibank Vietnam | Vietinbank | HSBC Vietnam | SCB Vietnam | Citibank Vietnam | Techcombank |
| Limited liability entity? | Yes | Yes | Yes | No | Yes | Yes |
| Average total engagement costs? | USD37,050 | US$25,745 | US$22,275 | US$18,990 | US$13,860 | US$19,740 |
| Average total engagement period? | 8 months | 6 months | 5 months | 4 months | 6 months | 5 months |
| Accounting and tax considerations | Fast solution LLC | Foreign-owned company | Free zone LLC | Representative office | Local company | Joint venture |
|---|---|---|---|---|---|---|
| Corporate tax rate on annual net profits? | 20% | 20% | 0-20% | 0% | 20% | 20% |
| Legally tax exempt entity | No | No | Yes | Yes | No | No |
| VAT payable on sales to local customers? | 10% | 10% | 10% | N/A | 10% | 10% |
| Monthly VAT reporting to the Government? | Yes | Yes | Yes | No | Yes | Yes |
| Must file an annual tax return? | Yes | Yes | Yes | Yes | Yes | Yes |
| Must appoint an auditor? | Yes | Yes | Yes | No | No | Yes |
| Access to double taxation treaties? | Yes | Yes | Yes | No | No | No |
| Company registration | Fast solution LLC | Foreign-owned company | Free zone LLC | Representative office | Local company | Joint venture |
| Minimum number of shareholders/partners? | 1 | 1 | 1 | 1 | 1 | 2 |
| Resident director/partner/manager required? | Yes | Yes | Yes | Yes | Yes | Yes |
| Maximum shareholding for foreigners? | 100% | 100% | 100% | 100%s | 0% | 99% |
| Minimum number of directors/managers? | 1 | 1 | 1 | 1 | 1 | 1 |
| Shelf companies available? | Yes | Yes | No | No | No | No |
| Time to incorporate a new entity? | 2 weeks | 2 months | 2 months | 2 months | 2 weeks | 2 months |
| Can easily convert to a PLC? | Yes | Yes | Yes | No | Yes | Yes |
| Can have preference shareholders? | Yes | Yes | No | Yes | Yes | Yes |
| Business considerations | Fast solution LLC | Foreign-owned company | Free zone LLC | Representative office | Local company | Joint venture |
| Can invoice customers in your company name? | Yes | Yes | Yes | No | Yes | Yes |
| Restrictions on nature of business activities | No | Yes | Yes | Yes | No | No |
| Good entity for trademark registration? | Yes | Yes | No | No | Yes | Yes |
| Can secure an import and export license? | Yes | Yes | Yes | No | Yes | Yes |
| Other useful information | |
|---|---|
| What will be included in my customer sales invoice? | (click link) |
| This country has signed free trade agreements? | Yes |
| This country is a member of WIPO/TRIPS? | Yes |
| This country is a member of the ICSID? | No |
| Government foreign investment approval required? | Yes, if > 51% foreign-owned |
| Average monthly office rental? (US$ per sq m) | US$30 |
| Minimum statutory annual salary? | US$190 |
| Average monthly US$ salary for local skilled employees? | US$350 |
| VND deposit interest rate? (1 year average) | 6% |
| US$ deposit interest rate? (1 year average) | 0% |
| Overseas remittance currency controls? | Yes |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Good |
| Crowd funding available in this country? | Yes |
| Temporary physical office solutions available? | Yes | Yes | Yes | Yes | Yes | Yes |
| Public register of company | Yes | Yes | Yes | Yes | Yes | Yes |
| You need a local resident as bank signatory? | No | No | No | No | No | No |
| Withholding tax on payments to individual shareholders? | 5% | 5% | 5% | 5% | 5% | 5% |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes | Yes |
| Withholding tax on payments to parent company? | 0% | 0% | 0% | 0% | 0% | 0% |
| Dividends received are legally tax exempt? | Yes | Yes | Yes | Yes | Yes | Yes |
| Security deposit to be kept with Government? | No | No | No | No | No | No |
| Must sign an office lease agreement? | Yes | Yes | Yes | Yes | Yes | Yes |
| Shareholders and directors documents to be attested? | Yes | Yes | Yes | Yes | Yes | Yes |
| Foreign director needs a tax number? | No | No | No | No | No | No |
| Foreign director needs a residence visa? | No | No | No | No | No | No |
| Shareholders and directors documents to be translated? | Yes | Yes | Yes | Yes | Yes | Yes |
| The entity will likely be regulated by? | MPI | MPI | MPI | MPI | MPI | MPI |
| Sponsorship by a local citizen required? | No | No | No | No | No | No |
| Company can hire local staff? | Yes | Yes | Yes | Yes | Yes | Yes |
| Maximum number of staff allowed? | No limit | No limit | No limit | No limit | No limit | No limit |
| Expatriate to local staff ratio? | None | None | None | None | None | None |
| Company can rent local office space? | Yes | Yes | Yes | Yes | Yes | Yes |
Vietnam business registration summary
- While some industries still require foreigners to form a joint venture with a Vietnamese, Vietnam has consistently liberalized its foreign investment regime and most industries now allow full ownership by foreigners;
- The most popular corporate vehicle to do business in Vietnam is the limited liability company. Such entity can be registered by a single foreigner, who can be either a corporate or an individual;
- Foreigners starting a business in Vietnam are however required to appoint a resident director (known in Vietnam as the legal representative). To comply with this requirement, our Clients often request nominee services from Healy Consultants Group;
- While there is no official capital requirement to register a foreign-invested company in Vietnam, a minimum paid-up capital of US$10,000 is always informally required. This minimum amount can reach US$100,000 and above when our Client plans to sell locally manufactured products;
- Business setup in Vietnam is a time consuming process, taking at least four months to be completed due to the need to open a capital account and to obtain an investment certificate from the Department of Planning and Investment.
