Can foreigners establish a company in Vietnam? What are the investment conditions for foreign investors? What is the process for setting up a foreign-owned company? Let's explore these questions with Anpha in the following article.
Conditions for foreigners to establish a company in Vietnam
1. Subject eligibility conditions
Foreigners are allowed to establish a company in Vietnam if:
2. Restricted business sectors for foreign investment
Currently, many business sectors have specific regulations restricting foreign participation in commercial activities.
For details, refer to the list of sectors not open to foreign investors.
Examples:
- Foreign-owned enterprises are not permitted to engage in labor supply services, such as sending Vietnamese workers abroad under contracts.
- Foreigners are not allowed to operate inspection and certification services for transportation vehicles.
3. Market access conditions for foreign investors
- Foreign-invested companies in Vietnam must comply with Commitment 318/WTO/CK, aligning with Vietnam's permitted business scope and services.
- If the business sector falls under the restricted market access list for foreign investors, specific legal conditions must be met, including: Ownership ratio of foreign investors in economic organizations; Investment forms permitted; Scope of investment activities allowed.
Examples:
Packaging Printing Services, classified under "Other Business Services," with restrictions on capital ownership and investment forms.
- Foreign ownership limit: Cannot exceed 51%.
- Investment form: Must be a joint venture.
Construction Services, classified under "Construction Services," with restrictions on investor eligibility and operational scope.
- Foreign investors: Must be a legal entity from a WTO member or an ASEAN member country.
- Scope of activities: Includes high-rise building construction, civil engineering projects, installation and finishing works for high-rise buildings, and other construction activities.
For more details on market access conditions for foreign investors, refer to the National Foreign Investment Information System.
Procedures for establishing a foreign-Invested company in Vietnam
There are two ways to establish a foreign-invested company in Vietnam:
- Establishing a company with vietnamese-owned capital, then transferring ownership;
- Directly establishing a company with foreign capital from the beginning.
1. Procedures for establishing a company with vietnamese-owned capital, then transferring ownership
The process of setting up a foreign-invested company by initially using Vietnamese-owned capital and then transferring ownership includes the following steps:
Step 1: Register the company with 100% Vietnamese-owned capital;
Step 2: Carry out the capital transfer procedure to a foreign investor.
>> See more: Setting up an FDI company by contributing capital to a Vietnamese company
2. Procedures for directly establishing a company with foreign capital from the beginning
To establish a company with 100% foreign capital, follow these steps:
Step 1: Apply for an Investment Registration Certificate for the foreign investor;
Step 2: Register the establishment of the company or enterprise.
>> See more: Applying for an investment certificate in Vietnam.
If you lack experience or want to expedite the process, you can refer to Anpha's services:
For free consultation and quick support, contact Anpha directly.
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Important notes for foreigners setting up a company in Vietnam
Regardless of the establishment method chosen, foreign investors must comply with certain requirements:
1. For companies transferred from Vietnamese owners
- For Joint Stock Companies (JSC): The individual transferring shares must submit a Personal Income Tax (PIT) declaration to the tax authority within 10 days from the transfer date. A PIT rate of 0.1% is applied to the transfer value.
- For Limited Liability Companies (LLC):The individual transferring capital only needs to submit a PIT declaration within 10 days after completing the transfer.
2. For companies with 100% foreign capital from the beginning
- If the company engages in retail distribution, it must obtain a business license from the Ministry of Industry and Trade.
- After establishment, the company must open an investment capital account for the investor to deposit their capital contribution.
FAQs about foreigners establishing a company in Vietnam
1. Can foreigners establish a company in Vietnam?
- Yes. Foreigners are allowed to establish a company in Vietnam if they meet the requirements regarding eligibility, business sectors, WTO commitments, market access conditions, and investment procedures as regulated.
2. What Is the process for establishing a foreign-Invested company in Vietnam?
- There are two ways to open a foreign-invested company in Vietnam:
Establishing a company with Vietnamese capital and then transferring ownership
Directly establishing a company with 100% foreign capital from the beginning
3. What are the investment procedures for establishing a foreign-invested company?
- For a 100% foreign-owned company, you must first apply for an investment registration certificate, and only after that can you apply for a business registration certificate. Each step requires preparing several documents.
>> See details: Investment registration certificate application.
4. How much does a foreign-invested company formation service cost?
5. What needs to be done after establishing a company?
- After establishing a company in Vietnam, foreign investors must complete legal procedures related to taxes, invoices, and insurance for official business operations.
Contact us at 0984 477 711 (Northern) - 0903 003 779 (Central) - 0938 268 123 (Southern) for assistance.
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