Start Business in Vietnam: Tips and Tricks

Vietnam with population over 98 million people, prospering middle class, and consistent economic growth is becoming more and more attractive to foreign investors. In addition to this, it has young and well-educated workforce and trade agreements with numerous countries. It also contributes a lot to the country’s market attractiveness.

Simultaneously with it people in Vietnam are becoming especially interested in imported commodities like food and beverages, healthcare, and others. It means that there are numerous opportunities to launch and expand business in this country.

In this article we are going to tell you how to start business in Vietnam and give some tips to do it successfully.

Company Registration

It is extremely vital to choose the right entity and register your company when starting any business in Vietnam.

There are 5 legal entities that are available to establish in Vietnam: limited liability company (LLC), joint-stock company (JSC), branch, representative office, and shelf company.

Limited Liability Company:

It will require 1-3 months to open a business with this type of legal entity. It is allowed to have 100% foreign ownership with number of owners limited to 1-50 members. LLC has simpler company structure in comparison with JSC (Joint-stock Company).

Joint-stock Company:

As it is in LLC, 100% foreign ownership is allowed. The differences are the setup time and number of owners. You will have to spend more than 3 months to establish it and have minimum 3 owners. Apart from LLC, JSC has no maximum in terms of their number.

Branch office:

It is used to establish a presence in Vietnam, can issue a VAT invoice, generate profits, and get into contracts and agreements. In case with branch office license tax applicable. It has more complex setup procedure in comparison with representative office.

Representative office:

It is used to establish a presence in Vietnam as well. VAT invoice issuance, contracts or agreements signing, and profits generation are not allowed. License tax is not applicable. Representative office has relatively simple licensing process and is quite easy to shut down.

Shelf Company:

You can set up Shelf Company in 1-2 days and start to run business immediately. It can get approval from bank, gain new clients and secure business contracts faster.

Compliance with tax policy

After company registration, you must comply with several Vietnamese tax regulations and laws.

It is recommended to take professional assistance to meet all the requirements. Here are some general advice for your reference:

• Report your tax regularly: once a month/quarter/year.

• You will probably have to pay such taxes such as company income tax (CIT), value-added tax (VAT), business license tax, and labor taxes.

• Be transparent and effectively communicate within the company in terms of tax compliance.

• VAS (Vietnamese Accounting Standards) are the main accounting system in Vietnam. You need to regularly follow its requirements.

Employment Regulations

If you want to hire foreigners, they must apply for a work permit and residency visa (or business visa). This will allow them to stay and work legally in Vietnam.

Foreigners will have to obtain a work permit if they are going to work in the country during more than 3 months. It is valid for 12 months and can be renewed. Foreigners that plan to work for less than 3 months need a business visa. However, they will have to get a sponsorship letter from a local firm.

Awesome products Co. is a Vietnamese distributor that can help you to start business in Vietnam and sell your products here. We offer such services as comprehensive FMCG marketing support including merchandising, promo activities, and on-shelves promotions. Awesome products Co. can also help your company to enter major marketplaces in South East Asia, Europe, and North America. We have a rich experience of selling our brands on Lazada, Shopee, Tiki, Sendo, and Amazon in different countries.

Contact us and start your business in one of the most promising countries in Southeast Asia!