How To Make Investment In Vietnam

Investment Registration Certificate (IRC)

Foreign investors must have an investment project and obtain an Investment Registration Certificate, by submitting an application dossier to the State Investment Registration Authority.

The competent State Investment Registration Authority for a specific investment project will be determined based on the location where the foreign investor proposes to implement its investment project, which can be:

• The Management Authority of the industrial zone, export processing zone, high technology zone or economic zone;
• The Foreign Investment Division under the provincial – level Department of Planning and Investment;

The application dossier is likely to take 8 to 16 weeks to prepare (including the translation and execution of all documents) and submit. The decision to approve and issue the IRC is discretionary, whilst statutorily provided that such a decision should be made within 15 days from the date of submission of the application. If the State Investment Registration Authority refuses to issue such an IRC, it must provide a written explanation of the reasons for the refusal to the foreign investor.

Enterprise Registration Certificate (ERC)

If a new Enterprise Registration Certificate is being established together with an investment project, upon the issuance of an IRC, the foreign investor will have to apply for an ERC for the establishment of the Foreign Invested Company. Although the new laws stipulate that the licensing authority must issue an ERC within 3 working days, in practice, it may take longer.

Post-establishment procedures

Securing an ERC only marks the beginning of the legal life of a Foreign Invested Company. Once the ERC has been issued, a number of subsequent administrative formalities must be undertaken within specific time limits, ex: tax registration.

Taxation of Foreign Business

You must register for a tax code, declare taxes, pay taxes and keep accounting records according to Vietnamese tax laws.

The main types of taxes that you need to pay:

• Corporate income tax (CIT): This is a tax on the profits earned by your company in Vietnam. The standard CIT rate is 20%, but some preferential rates may apply depending on your industry, location, and investment incentives. You need to file CIT returns quarterly and annually and pay CIT accordingly.
• Value-added tax (VAT): This is a tax on the added value of goods and services sold or consumed in Vietnam. The standard VAT rate is 10%, but some reduced rates (5%) or exempted rates (0%) may apply depending on your goods or services. You need to file VAT returns monthly or quarterly and pay VAT accordingly.
• Personal income tax (PIT): This is a tax on the income earned by individuals in Vietnam. The PIT rates range from 5% to 35%, depending on your income level and resident status. You need to file PIT returns annually and pay PIT accordingly.
• Foreign contractor tax (FCT): This is a tax on payments made by Vietnamese entities to foreign contractors for goods or services provided in Vietnam. The FCT rates vary depending on your goods or services and consist of CIT and VAT components. You need to file FCT returns monthly or quarterly and pay FCT accordingly.
• Other taxes: These include taxes such as special consumption tax, natural resources tax, environmental protection tax, import-export tax, property tax, etc., depending on your goods or services.

Are you still confused and can’t know exactly what taxes need to be paid when doing business in Vietnam? GTax accounting services will assist you with this issue because we are experts in the field of tax and accounting in Vietnam.

Conditional Investment Sectors for Foreign Investors

The Investment Law 2014 lists 267 conditional investment sectors.
The specific investment conditions applicable to investment in these sectors are detailed either in specialized laws governing the particular sector or in international commitments, such as Vietnam’s WTO Commitments on Services.