Client: We will like to set up a 100% owned branch office in Vietnam to conduct our business locally. Is this possible?
What is the requirement of local directors, restriction on trade activities of foreign owned branch offices and the tax payable?
Lawyer: This is reference to your email below. I am Lawyer of SBLaw. I was entrusted to provide you legal advice for setting up wholly foreign owned branch in Vietnam for trading activities.
According to Vietnam Law, foreign enterprise can establish its own branch in Vietnam for trading activities.
However, in practice, according to our experience, upon receipt of application for setting up foreign owned branch, the competent authority shall guide you to setup Wholly Foreign Invested Company for conducting trade activities.
We therefore would like to send you our legal service proposal for setting up Wholly Foreign Invested Company (FIC) for your reference.
Upon establishment of FIC in Vietnam for trading goods, FIC shall pay following tax:
(i) Business License Tax: Depending on the registered Investment Capital of the FIC, the business license tax shall be from 50USD to 150USD/per year.
(ii) Corporate Income Tax: 20% of taxable profit of the FIC.
(iii) Import duty for imported goods. It shall be based on origin and type of goods.
(iv) Value Added Tax: From 5-10% of goods or value as consumed by FIC.
We do hope that our information is helpful for you. In case you have any further question on this matter, please feel free to contact us.
We are looking forward to hearing from you soon.
