Can foreigners establish a company in Vietnam? What are the investment requirements for foreign investors? What is the process for opening a foreign-owned company? Let’s explore through the following article with GLAW:
CONDITIONS FOR FOREIGNERS TO ESTABLISH A COMPANY IN VIETNAM
1. Subject Matter Conditions
- Foreigners are allowed to establish companies in Vietnam when:
- Of legal age
- Having full civil capacity
- Not subject to criminal prosecution
- Not serving a sentence
- Nationality belongs to WTO member countries
2. Industries not permitted for investment in Vietnam
Currently, there are many business sectors with restrictions preventing foreigners from engaging in business activities.
For example:
- Companies established by foreigners are not allowed to engage in the business of sending laborers to work abroad under contracts (labor supply services);
- Foreigners are not allowed to engage in inspection services and issue certificates for transportation vehicles.
3. Market access conditions for foreign investors
- Establishing a foreign-owned company in Vietnam must comply with commitment 318/WTO/CK corresponding to the scope of Vietnam’s business activities and services;
- If the invested industry falls under the list of restricted sectors for foreign investors’ market access, they must meet the legal conditions (regarding the ownership ratio of foreign investors’ charter capital in economic organizations; investment form; investment activities scope, etc.) to conduct business activities.
For example:
Packaging printing services belong to another business service sector, with restrictions on ownership ratio of charter capital and investment form:
- Ownership ratio of foreign investors’ charter capital in economic organizations: not exceeding 51%;
- Investment form: joint venture.
Construction of buildings falls under the construction service sector, with restrictions on subjects, scope of activities, specifically:
- Foreign investors: must be legal entities of a WTO member or a member state of ASEAN;
- Scope of activities: construction of high-rise buildings, construction of civil engineering works, installation and completion works, completion works for high-rise buildings, other construction works.
PROCEDURES FOR ESTABLISHING A FOREIGN-INVESTED COMPANY IN VIETNAM
There are 2 ways to open a foreign-owned company in Vietnam:
- Method 1: Establishing a company with Vietnamese capital and then transferring ownership;
- Method 2: Establishing a company directly with foreign capital.
1. Procedure for establishing a company with Vietnamese capital and then transferring ownership
The process of establishing a foreign-owned company with Vietnamese capital and then transferring ownership includes the following steps:
- Step 1: Registering the establishment of a company with 100% Vietnamese capital;
- Step 2: Carrying out procedures for transferring ownership to foreigners.
2. Procedure for establishing a company directly with foreign capital
To open a company with 100% foreign capital from the beginning, you need to follow these steps:
- Step 1: Completing procedures to apply for an investment certificate for foreign investors;
- Step 2: Registering the establishment of the company or enterprise.
If clients lack experience or want to expedite the procedure, they can consider GLAW’s services.
NOTES WHEN FOREIGNERS OPEN A COMPANY IN VIETNAM
When foreigners open a company in Vietnam, regardless of the chosen establishment method, certain requirements must be observed.
1. For companies with foreign capital transferred from Vietnamese individuals
- If it is a joint-stock company, individuals transferring ownership must submit personal income tax declaration to the tax authority within 10 days from the date of transfer. At the same time, pay personal income tax at a rate of 0.1% on the transfer value;
- If it is a limited liability company, individuals transferring ownership only need to submit personal income tax declaration within 10 days from the completion of the transfer.
2. For companies with 100% foreign capital established directly from the beginning
- If the foreign-owned company needs to distribute retail, it must obtain a permit from the Ministry of Industry and Trade;
- After establishment, the company must open an investment capital account for investors to deposit their contributed capital.
FAQs
Can foreigners establish a company in Vietnam?
Yes – Foreigners have the right to establish a company in Vietnam when meeting conditions regarding subjects, business sectors, WTO commitments, market access conditions, and investment procedures as regulated.
What is the process of establishing a foreign-owned company in Vietnam?
There are 2 ways to open a foreign-owned company in Vietnam:
- Establishing a company with Vietnamese capital and then transferring ownership;
- Establishing a company with 100% foreign capital directly from the beginning.
What are the investment procedures when establishing a foreign-owned company?
When establishing a company with 100% foreign capital, you need to go through investment registration procedures to obtain an investment certificate before applying for a business registration certificate. At each step, you will need to prepare various types of documents.
How much is the full-package service fee for establishing a foreign-owned company?
GLAW provides full-package service for establishing a foreign-owned company starting from $1000. You can contact GLAW via hotline: 0945929727 for free consultation support.
What are the post-establishment tasks for the business?
After a foreigner establishes a company in Vietnam, they need to carry out some legal procedures regarding taxes, invoices, insurance, etc., to officially commence business operations.
Price list link for services implementation Establishing a Company in Vietnam by Foreigners
