All You Need To Know About Business In Vietnam

Doing business in vietnam

Strategies for a long-term economic recovery

Representatives from organizations and industry associations discussed numerous solutions during the high-level meeting in order to protect the economy from the pandemic's harmful effects and develop sustainable supply chains for the new normal.

The VCCI presented 10 recommendations, some of which included facilitating information access to policies and regulations to support businesses, efficiently assisting businesses in obtaining financing, streamlining immigration and travel procedures for workers and experts, and accelerating the use of IT in administrative processes.

To eliminate trade bottlenecks and existing restrictions while also fostering a conducive environment for the flow of services and goods between contractual parties, EuroCham advised improving collaboration between the relevant authorities in Europe and Vietnam.

AmCham proposed changes to capital markets in order to encourage investment, unlock the full potential of the digital economy, speed up e-government for efficient and effective services to citizens, make the switch to cleaner energy, invest in infrastructure to support sustainable growth, create a workforce that is competitive on a global scale, and transition to a cleaner energy future.

PM Chinh reaffirmed that the government would assist all economic sectors, including infrastructure development, social security-related projects, high technology, supporting industries, smart agriculture, environmental protection, renewable energy, and private and foreign investment.

During the implementation of Resolution No. 11 on the socioeconomic development and recovery program and Resolution No. 43 of the National Assembly on fiscal and monetary policies to support the program, the PM also asked pertinent ministries and branches to take into account and incorporate the reasonable proposals and recommendations made by the delegates into their programs and action plans.

Setting up a business in vietnam

In order to ensure appropriate compliance with the laws of the nation, there are a number of significant measures that must be followed while establishing a business in Vietnam. The acquisition of an Investment Certificate, raising charter capital, and setting up the proper management structure of the firm are crucial steps in these operations.

We advise seeking expert guidance when starting a business in Vietnam because of the complicated legal procedures in the nation. This will help you navigate the setup process and will also help you understand the duties of important positions inside the organization. By doing this, you can make sure that your business is prepared for success.

Set-up Process

Obtaining an Investment Certificate (IC), also known as a Business Registration Certificate, is the first step in starting a business in Vietnam. The length of time needed to obtain an IC varies by industry and entity type since these factors affect the registrations and assessments needed:

- The time it takes to issue an IC for projects that call for registration is about 15 working days.

- IC issuance times for projects undergoing assessment are expected to change. Projects that don't need the Prime Minister's permission finish around 20 to 25 working days, while those that do take about 37 working days.

It is significant to remember that all documentation provided by foreign governments and organizations must be notarized, consular legalized, and translated into Vietnamese during the IC application process in accordance with Vietnamese legislation. Additional actions must be done after the issuance of the IC in order to complete the process and begin company operations, such as:

- Carving seals

- Registration of tax codes (within ten working days of the issuance of the IC)

- Opening a bank account

- Registration of workers

- Payment of business license taxes

- Capital contribution to the charter

- Announcing the foundation of the company publicly

Charter Capital

Charter capital is described by Vietnamese law as "the amount of capital contributed or undertaken to be contributed by shareholders in a certain period and stated in the charter of the company," with the Vietnamese government further defining it as "the aggregate par value of the number of issued shares."

Charter capital can therefore be utilized as working capital to run the business. It may be used in conjunction with loan capital or make up the entire amount of the company's total investment capital. The company charter, total investment capital (which also includes shareholder loans or outside financing), and total investment capital must all be registered with the Vietnam license-issuing authorities. Without the local licensing authority's prior consent, investors are not permitted to change the charter capital amount.

Capital contribution schedules are outlined in FIE charters (articles of association), joint venture contracts, and/or business cooperation contracts in addition to the FIE's investment certificate. Limited Liability Corporations (LLCs) must provide charter capital in accordance with the capital contribution schedules of the company structure they have chosen.

After establishing the FIE, foreign investors must open a capital bank account in a bank that has a valid license before they can move money into Vietnam. A capital bank account is a unique kind of foreign currency account created to make it possible to trace the flow of capital into and out of a nation. To conduct in-country payments and other current transactions, money can be transferred from this sort of account to current accounts.

Business opportunities in vietnam in real estate market

Vietnam's administration

The government presents one of the best possibilities for investors looking to enter Vietnam's real estate sector. It is evident that the government's actions, such as removing roadblocks and completing unfinished projects by the second quarter of 2019 and earlier, improving and streamlining the housing application process, and harshly dealing with localities that violate laws pertaining to housing and land, have given this market a strong boost. In addition, the government of Vietnam has taken prompt action to aid in the real estate market recovery, offering tax reduction policies, extending the term of land leases, lowering business taxes, and especially providing credit support packages for businesses and farmers affected by COVID-19, despite the fact that the COVID-19 epidemic is still raging and showing no signs of abating globally (250 trillion dong package).

In contrast, the government has released Decree 25/2020, which replaces Decree 30/2015, outlining the application of various regulations related to the Investor Bidding Law. Following the completion of the compensation, the government would implement the allocation of land to qualified investors as quickly as feasible and support the resettlement of the project land.

Vietnamese citizens' unmet wants

The needs of the Vietnamese people provide a second chance for enterprises. Vietnam, which is the third most populous country in Southeast Asia and the fifteenth most populous country overall, constantly exhibits a housing shortage, particularly in its major cities like Da Nang, Ha Noi, and Ho Chi Minh. Additionally, Vietnam's urbanization process is progressing quickly. The Vietnamese government claims that due to the country's rapidly increasing urban population, Vietnam must construct around 100 million m2 of new housing per month to suit the demands of urban people.

Inflows of foreign direct investment (FDI) into the real estate market kept rising

Data from the Foreign Investment Agency (2020) show that Vietnam's FDI disbursement in the real estate industry reached around $ 38 billion in 2020, an increase of more than 7% compared to the same period in 2019. Nearly $4 billion US worth of registered investment capital, or more than 10%, went toward manufacturing. This could mean that in recent years, investors, particularly foreign investors, have been encouraging long-term investment activity in the real estate market. FDI capital inflows into the real estate industry have grown significantly and abruptly, and the government's and the private sector's focus on investing in new infrastructure is also anticipated to spur the market's development of stability.

The infrastructure

Vietnam's existing infrastructure, particularly in the growing tourist provinces like Nha Trang or Da Nang, is drawing a lot of attention from both domestic and foreign real estate investors. Additionally, during the COVID-19 pandemic, domestic investment projects are supported, opening doors for the growth of the real estate sector, with Ho Chi Minh City normally moving forward with the start. building more than 20 significant transportation projects, such as the upgraded Thu Thiem 2 Bridge or the new Eastern Bus Station,...

Vietnam business culture

Understanding Vietnamese business customs is one of the main elements of commercial success in Vietnam. It could cost you a lot of money and result in missed opportunities if you don't understand.

Vietnamese society is collectivist, and family and community concerns nearly always take precedence over those of an individual or a corporation.

The significance of comprehending Vietnamese corporate culture

Each nation has its own particular culture, which has a big impact on how that nation conducts business. Vietnam doesn't stray from this pattern at all!

Understanding Vietnamese corporate culture typically makes it easier to get along with collaborators and avoid cultural obstacles.

Additionally, Southeast Asia has a rich history that may be traced back to Vietnam's traditions. Understanding these traditional, revered cultural norms will make doing business in this nation much simpler for you.

Let's go through the main points of Vietnam's business culture in the paragraphs that follow, including some typical practices and proper business etiquette.

International trade in Vietnam

At a meeting with the local People's Committee yesterday, foreign business groups praised Viet Nam and HCM City for their accomplishments in luring FDI and fostering trade, according to the Vietnam News.

Vietnam has experienced the fastest economic development in Asia (GDP increased by 6% to 7% between 2016 and 2018). Foreign investors now have a decent choice in doing business in Vietnam. The following are four legal recommendations for foreign investors doing business in Vietnam.

According to Thai Van Re, head of the city's Department of Planning and Investment, the city's GDP, which represents 21.6% of the country's overall GDP, increased by 9.6% in 2014 to VND853.5 trillion (about US$39.7 billion).

$57.4 billion, or 19.3% of the nation's overall trade, was done outside of the country.

$1.65 billion of that amount was accounted for by manufacturing, and $635 million by real estate.

Re acknowledged that slow and onerous procedures as well as immigration, tax, and customs issues were challenges to international investors.

According to Le Thanh Hai, secretary of the city's party committee, more than 5,300 FDI projects in HCM City, with a total investment of more than $36 billion, employ 22% of the city's workforce.

According to him, FDI has contributed to the development of numerous hotels, structures, offices, malls, apartment buildings, and urban areas, giving HCM City a fresh appearance.

According to him, the city's efforts to restructure its economy and economic development model have been greatly aided by the introduction of cutting-edge new technology and new business models by foreign investors.

Foreign Business In Vietnam

Vietnam is a desirable location for foreign businesses thanks to its economic openness policies, particularly in the wake of the Covid-19 outbreak. As a result, there are increasingly more international investors in Vietnam. Vietnam has rules applicable for each type of investor in being given temporary residence cards in order to establish favorable conditions for individual investors with direct capital investment or representatives of foreign organizations investing in Vietnam to live and work.

The following three categories of temporary residence cards are available to investors who are using visas and fall under the investment category sponsored by foreign investment corporations and bearing the temporary residence card symbol DT:

(ii) DT1 - Issued to foreign investors in Vietnam and representatives of foreign organizations investing in Vietnam with a contributed capital of VND 100 trillion (USD 4.5 million) or more or investing in industries, professions, or geographic areas with investment incentives determined by the government;

(ii) DT2 - Awarded to foreign investors and representatives of foreign organizations investing in Vietnam with a capital contribution of between VND 50 billion (USD 2.3 million) and under VND 100 billion, or investing in industries or trades to support development investment as determined by the government;

(iii) DT3 - Issued to representatives of international organizations investing in Vietnam as well as foreign investors with capital contributions ranging from VND 3 billion (USD 136k) to less than VND 50 billion. For investors and representatives of international organizations investing in Vietnam, temporary residency permits with a set term are as follows: Temporary residency permits with the symbol DT1 have a maximum 10-year tenure; A temporary residency card with the symbol DT2 has a maximum validity of five years; The validity period for a temporary residency card with the sign DT3 is three years maximum. International investors and representatives of foreign organizations who engage in Vietnam with less than VND 3 billion in contributed money will not be given a temporary residency card; instead, they must apply for a signed visa type DT4 that is only good for a year.

Documents proving the status of the sponsoring agency, organization, or individual; documents demonstrating the relationship between the investor and the sponsoring agency, organization, or individual; information regarding the sponsored investor; pertinent document information to determine the type of temporary residence card issued to investors; and these legal statements must all be included in the application file for a temporary residence card requested by a foreign investor.

If representatives of foreign organizations investing in Vietnam and foreign investors intend to remain in Vietnam, they must apply for a temporary residency card in accordance with the requirements, documentation, and processes set forth by Vietnamese legislation. For practical answers, it's crucial to speak with immigration law companies in Ho Chi Minh City, Hanoi, or Da Nang.