Question: We are U.K based company and we wanted to expand our operation across border and we have started our operation in China last year and now we are interested in Vietnam. We are dealing foodstuff product as well exporting cotton. we wanted to know from you company that what are law requirements for opening a company in Vietnam and what are the benefits for the foreign investor and also tell us that what kind of company that we should open over there and how flexible the law for different types of company like (company,joint stock company,etc)
Answer: This is reference to your email below. I am Lawyer of SB Law. I was entrusted to provide you legal advice regarding to the matter hereinunder.
We understood that you intend to setup a foreign invested company in Vietnam for dealing with foodstuff and cotton and now studying procedure for opening company, benefit of foreign investor etc.
For your ease of reference, please find our comments as follows:
(i) Setting up foreign invested company: You shall be required to obtain an Investment Certificate from the competent authority. It shall take you about 15 working days from submission of application dossier to the competent authority for obtaining the Investment Certificate. For several special case, before obtaining Investment Ceritificate, you shall be required to obtain in-principal approval from authorities. After obtainment of Investment Certificate, you shall be required to obtain Certificate of Business Registration for Foreign Invested Company. This step shall take you about 5 working days to complete.
(ii) Benefit of foreign investor: Depending on specific business activities and/or location of the company, foreign investor is entitled to investment incentive such as Corporate Income Tax Exemption, Deduction or Deduction of land lease price etc. In case of change of law, Investment Incentive granted to Foreign Investor under the old law can be remained. After paying all tax applicable under Vietnam Law, Foreign Investor is entitled to transfer there benefit to abroad.
(iii) Foreign Invested Company can be structured as Limited Liability Company or Joint Stock Company. If you choose Joint Stock Company, it shall require at least 03 Shareholders. According to our practical experience, Limited Liability Company is generally favored in case Foreign Investor would like to setup wholly foreign owned company. However, in case of joint venture with local partner, Joint Stock Company is more favored due to the the Shareholder may freely transfer its shareholding after 03 years from the year of incorporation.
For providing you more detailed advice, please answer us following questions:
– What is your proposed business activities in Vietnam?
– Will you joint venture with a local partner?
– Which City would you like to setup the company in Vietnam?
– How much will you invest into Vietnam?
We do hope that the above information is helpful for you. If you have any further inquiry, please feel free to contact us.