Improving Business Environment and Enhancing National Competitiveness in 2018 | ANT Consulting

After four years of implementation of resolutions 19-2016/NQ-CP, 19-2017/NQ-CP, 19-2018/NQ-CP of the Government, business environment and competitiveness of Vietnam have continuously improved.

According to the research, in 2017, the business environment, enhance competitiveness has achieved positive results; National competitiveness increased 5 levels compared to 2016 (increased from 60/138 to 55/137); business environment increased 14 levels (increased from 82/190 to 68/190 economy); Innovative innovation improved 12 levels, reaching the rank of 47/127 economy. These are the highest rankings that Vietnam has achieved so far.

Continuing to follow the assessment objects of World Bank’s business environment, the enhance competitiveness of the World Economic Forum, World Intellectual Property Organization, etc., to achieve the targets set for 2020, the quality of a business environment of Vietnam is on par with the average of ASEAN 4.

The target for 2018 will improve the business environment index from 8 to 18, which focuses on improving business start-up and dispute resolution. Complete the abolition, simplification of investment conditions, business. Limit the specialized inspection according to goods and products; strongly transform the way state management from pre-inspection to post-inspection. Improve the application of information technology in administrative procedures and online services. Enhance the competitiveness of the tourism industry, logistic services to facilitate and reduce business costs.

In order to achieve the above objectives, resolution 19/2018/NQ-CP provides basic solutions and assigned tasks to each agency and coordinated implementation to achieve the targets set in 2018, bringing Vietnam’s ranking to the top of the charts. Accordingly, ministries and agencies shall develop action plans, define specific objectives, tasks and responsibilities, monitor and evaluate them. Carrying out reform of administrative procedures and application of information technology in public services; to carry out the inspection, examination and audit in a uniform manner, avoid overlapping, affecting the operation of enterprises, create a competitive environment, promote transparency and market development of testing and inspection services, inspection, certification.

Specific mandates for ministries: Ministry of Planning and Investment (focusing on activities related to enterprises); Ministry of Justice (elaborate a plan on improving the law on contracts and civil dispute resolution by non-court proceedings); Ministry of Finance (dealing with tax issues, improving tax index, business start-up index); Ministry of Transport (offering solutions, reducing costs, developing logistics infrastructure) and other ministries such as the Ministry of Culture, Sports and Tourism; Ministry of Public Security; Ministry of Industry and Trade and other ministries such as Ministry of Science and Technology, Ministry of Information and Communication; Ministry of Natural Resources and Environment; Ministry of Health, Ministry of Construction; Ministry of Agriculture and Rural Development … to coordinate to achieve the objectives set out in the resolution.

These are the policies which Vietnam government has been focusing on and will legalize in regulations to implement in practice.

Read More

Business Conditions for Condominium Management Training Service

On July 1st 2016, the Government issued Decree No. 79/2016/ND-CP guiding the business of training service, improving the professional knowledge, management profession and operation of condominium.

Accordingly, organizations and individuals providing the above services must fully satisfy the 05 following conditions:

– First, the organization was established and operating in Vietnam; has the function of vocational training or college, university or postgraduate education as prescribed.

– Second, has a facility and classroom to ensure sufficient seat for students and location for students to practice on professional knowledge and practice.

– Third, has syllabus or teaching materials consistent with the training framework program that was promulgated by the Ministry of Construction.

– Fourth, has a minimum of 40% of the teachers on the payroll or a contract of indefinite term (has social insurance contribution) in accordance with the training framework program under the guidance of the Ministry of Construction.

– Fifth, being recognized by the Ministry of Construction or the agency authorized by the Ministry of Construction as qualifying for business of condominium management training service.

In addition, this Decree also provides for conditions for business of real estate brokerage practice training service as follows:

– First, the organization was established and operating in Vietnam; has the function of vocational training or college, university or postgraduate education as prescribed.

– Second, has a facility and classroom to ensure sufficient seats for students and location for students to practice on knowledge of real estate brokerage and administration of real estate trading floors.

– Third, has syllabus or teaching materials consistent with the training framework program that was promulgated by the Ministry of Construction.

– Fourth, has a minimum of 30% of the teachers on the payroll or a contract of indefinite term (has social insurance contribution) in accordance with the training framework program under the guidance of the Ministry of Construction.

Decree No. 79/2016/ND-CP officially takes effect upon signing.

Read More

Legal Procedures Post Licensing in Vietnam

After establishing a company in Vietnam, the compay has to perform a number of legal procedures for compliance purposes.

First, they have to declare the license tax. The tax declaration should be submitted to tax authorities. If the taxpayer has a branch in the same province, the tax declarations of the branch should be submitted to the taxpayer’s tax authority. On the other hand, if the taxpayer has a branch in another province, the tax declarations of the branch should be submitted to the tax authority of the branch. In case when the taxpayer does not have a permanent business location, the tax declaration should be submitted to the sub-department of taxation where the business is located or where the taxpayer resides. License tax is submitted annually and if the taxpayer has declared and paid license tax, he is not required to submit license tax declaration in the next year if the amount of license tax payable is not changed. In case the taxpayer amount of license tax payable in the next year is changed, a tax declaration shall be submitted by December 31st of that year.

Second, the enterprise has to conduct the VAT (value added tax) declaration. The taxpayer that has just begun his business shall declare VAT quarterly. In the next calendar year after 12 months of business, VAT declarations shall be declared whether monthly or quarterly depending on the revenue from the sale of goods and/or services in the preceding calendar year (12 months). VAT shall be declared monthly or quarterly throughout the calendar year and the 3-year period. For example, the first stable period begins on October 1st, 2014 and ends on December 31st 2016.

Third is the CIT declaration (corporate income tax). The CIT declaration should be submitted to the supervisory tax authorities. According to business results, the taxpayer shall make the quarterly tax payment within 30 days of the quarter succeeding the quarter in which tax is incurred; they shall not submit the provisional CIT declaration quarterly.

The fourth is the invoice printing. Before placing the first order for invoices, the company must send a written request for permission to use ordered invoices to the supervisory tax authority. Before the business uses invoices for its sale of goods and services, except for invoices purchased from or provided by the tax authority, the business has to send a notice of invoice publication together with a sample invoice to the tax authority.

Every quarter, sellers of goods and services shall submit the invoice using a report to the tax authority, even when there are no invoices that have been used during the period. The report of the first quarter shall be submitted by April 30th, second quarter by July 30th, third quarter by October 30th, and fourth quarter by January 30th of the next year. If no invoices are used during the period, the quantity of used invoices in the report shall be zero (0).

The fifth is the bank account. The opening of a bank account to conduct transactions with customers is necessary because according to the ministry of Finance, the invoice value of 20 million VND or above should be transferred through the bank. Within 10 days from the day that enterprise opens a bank account, the company has to notify the bank account number to the competent tax agency.

The sixth also the last one is labour and social insurance. If the contract between enterprise and employee has a duration of over 3 months, it is subjected to compulsory social insurance.

Read More

Renewal of License for the Establishment of Branches Office in Vietnam

The extension of the license for the establishment of a foreign trader’s branch in Vietnam shall be following the regulation of the commercial law and the relevant guiding decrees and circulars under Vietnam laws.

Preparation of dossiers for extension of license for the establishment of branches includes:

-Application for extension of license for the establishment of branches, made according to the form set by the Ministry of Industry and Trade, signed by a competent representative of the foreign trader;

-A copy of the business registration certificate or equivalent paper of the foreign trader that is translated into Vietnamese and certified by a Vietnamese diplomatic mission or consulate abroad consular legalization in accordance with the law of Vietnam;

-Copies of audited financial statements or documents certifying the fulfillment of tax or financial obligations in the latest fiscal year or papers of equivalent value issued by competent agencies or organizations (where the foreign trader established) to prove the existence and operation of the foreign trader in the latest financial year, it must be translated into Vietnamese and authenticated in accordance with the provisions of Vietnamese law;

-A copy of the license for the establishment of the branch.

The order and procedures for extension of the license for the establishment of the branch at a competent agency shall be as follows:

-A dossier for extension of the license for the establishment of the branch must be submitted within 30 days at the latest before the license expires;

-Foreign traders submit applications directly or via post or online (if applicable) to the Ministry of Industry and Trade;

-Within 03 working days from the date of receipt of the dossier, the Ministry of Industry and Trade shall check and request the supplement if the dossier is incomplete and invalid. Requests for supplementary records are made at most once during the process of processing applications;

-Within 05 working days from the date of receipt of the complete and valid dossier, the Ministry of Industry and Trade shall renew the branch establishment permit. In case of non-renewal, the reasons therefor must be clearly stated in writing;

-In case the extension of the license for the establishment of the branch is not governed in specialized legal documents, the Ministry of Industry and Trade shall send a written request for comment to the specialized management ministry within 03 working days from the date of receipt of a complete and valid file. Within 5 working days from the date of receiving the Ministry of Industry and Trade’s written request, the specialized managing ministries shall clearly state whether they agree or disagree with the license extension. Within 5 working days after receiving the opinions of the specialized management ministry, the Ministry of Industry and Trade shall extend or not extend the branch establishment permit to the foreign trader. In case of non-renewal, the reasons therefor must be clearly stated in writing;

-Within 15 days from the date of extension of the license for the establishment of the branch, the Ministry of Industry and Trade shall publish on the website of the Ministry.

Read More

Simplifying the Procedure for Foreigner to Reside in Vietnam

For foreigners wishing to come to Vietnam to work and reside temporarily, they need to either set-up a company in Vietnam or work for others. The owner of the company does not need a work permit but still needs to apply for a temporary residence card.

However, the foreign employee will need the employer to sponsor the work permit in Vietnam before applying for a temporary residence card. A recent draft law on entry, exit and residence of foreigner in Vietnam has been proposed with some changes. The draft regulates many open provisions on entry-exit procedure, temporary and permanent residence conditions for foreigners to reside in Vietnam. ANT Lawyers always follows the new updates about administrative procedures in Vietnam to provide our client with the best service.

The new draft law details conditions for granting the temporary residence card for foreigners working in Vietnam, raising the term of this card from 3 year to 5 year. The foreigners’ category expands to scientists and specialists residing in Vietnam for the purpose of attracting international talents, the foreigners who don’t have any type of document proving nationality, and have resided in Vietnam before the year 2000. The foreigners holding temporary residence cards must change cards periodically 10 years at the issuing offices. The draft law does not allow the foreigners to change the entry purpose, but allows them to supplement the purpose of belonging persons in some specific cases such as in terms of diplomatic representative offices, consulates, international representative offices of the United Nations and students at universities, colleges, schools.

For more information or requirements of legal services to obtain a temporary residence card in Vietnam, we could assist. 

Read More

Students learn how to start up business

HCMC - Corporate executives pointed out at a business seminar in HCMC on Monday that feasible ideas and the daring will be among the important factors students should possess if they want to set up their own businesses and develop their personal brands after graduation.

Duong Thu Huong, director of public relations and operations at IDG Ventures Vietnam, asked more than 200 students at the seminar to identify what they would want based on their ideas and then try their best to make it a reality.

Nguyen Minh Triet, chief executive officer of Strategy Asia Group, shared Huong’s view, saying that business start-up was to start a journey. “You must select a direction and make every effort to achieve the targets you set for the journey,” Triet told participating students at the “Building a Corporate Career: Developing Personal Brand and Leadership in a Big Game” session of the “Re-Invest Yourself” seminar.

Triet said a company should have a clear development strategy and targets. “Different approaches are needed to reach different goals,” he said and advised young people to set up businesses in the fields where they have experience and know-how to gain a certain advantage.

Huong of IDG Ventures Vietnam warned business start-up was not an easy job because young people were required to have practical ideas appropriate for their personal capacities.

However, she said that many opportunities were awaiting youths to set up new businesses and investment funds were also ready to help translate their business ideas into reality.

Huong told the Daily that IDG Ventures Vietnam would invest in new feasible business ideas and the investment capital would depend on the scale of the project.

Triet of Strategy Asia Group said failure was common when doing business but stressed the lessons from this failure was what that mattered most for successful business people. “Failure is necessary for us to achieve success.”

Nguyen Cong Ai, director of tax and corporate services at KPMG Vietnam, said failure drew people to reality and helped them work harder to get more success. “The biggest failure in life is that we do nothing when we fail,” Ai told the seminar.

Triet of Strategy Asia Group said personal brand development was like building a company. “We must have a proper strategy and set the target to achieve.”

Read More

The 66th Asian Business conference in Danang

On July 4th, 2019 the People’s Committee of Da Nang organized the 66th Asian Business Conference about business cooperation between Vietnam and Japan. Representatives of 60 Vietnamese enterprises and 130 enterprises from Japan attended showing intersts in economic cooperation.

The representatives of Japanese companies provided many useful information about business investment cooperation opportunities in the fields of information technology, high technology, health, education …After 45 years from the establishment of diplomatic relations, Japan has become one of the Vietnam’s leading partner in many areas, becoming the largest ODA provider, and the second largest FDI investor in Vietnam.

Japan is leading countries investing in Da Nang with more than 180 projects and the total investment capital is nearly 890 million USD, focusing on the fields of industrial production, high technology, services, real estate and travel. The Da Nang’s enterprises in supporting industries, IT, textiles, fisheries, education … are always willing to cooperate with Japanese partners to expand markets, access technology and new management systems.

It is obvious that Japan is one of strategic partners, a key market with strong financial and public potential, including high-tech industry, information and communication technology and supporting industries as well as services and education sectors. The city government always strives to create favorable conditions for Japanese investors to establish and implement effective projects, as well as implement solutions to improve the city’s investment environment such as infrastructure construction, high-tech parks and centralized information technology zones, planning new industrial parks with attractive investment preferential policies, promoting administrative procedure reforms and focusing on human resource training qualified, skilled … to meet the demand of the investors.

The Conference creates opportunities for interaction and discussions between Vietnamese enterprises and Japanese enterprises, between Da Nang city and investors in the area of manufacturing, construction, healthcare, tourism, education, science and technology.

Read More

Where Foreign Investors Obtain Investment License in Vietnam?

To set up a business in Vietnam through foreign direct investment, foreign investors need to register the investment license from Vietnam Ministry of Planning and Investment (MPI).

Depending on investment business lines, investment conditions, scale of the projects, where investment project is located, other Vietnam State authorities would be involved. MPI in Vietnam takes charge of developing legislation, guiding, consulting and coordinating with other State authority in regard to all investment in Vietnam. Foreign investors apply for investment license at MPI which is acting as the contact point. People’s Committee will be the government body that administer investment activities within its city or province and issue the investment license to the foreign investor.

In case the foreign investor setting-up a business within an industrial zone, the management board of an industrial zone will have authority over the investment licensing process. For investment project which is larger than VND 300 billion (around USD 14.2 million) or in conditional investment area, MPI and other ministries will be involved in the evaluation process to recommend to the Prime Minister for approval. Other ministries involved in investment project licensing would be Ministry of Trade and Commerce and Minsitry of Finance for setting up a trading company in Vietnam; Ministry of Science and Technology for investment in high-tech projects in Vietnam; Ministry of Education and Training for setting up education institute; Ministry of Health for investment in hospital in Vietnam, etc to ensure they are complying with the specific industry’s regulations.

Read More

Which Authority Approves Business Setting up in Vietnam?

Investment projects in Vietnam could be evaluated and approved for business setting-up at the top level of the government, at ministerial levels or at the provincial levels.

The licensing authorities for setting up business in Vietnam have been divided to distribute workloads at different state agencies with aim to speed up the process and attract more quality investment projects in Vietnam.

In practice, the process for establishing companies or executing investment projects in Vietnam would take from one month for simple projects, three to six month for areas categorized under conditional investment areas, requiring sub-licenses, or additional time for more complicated projects. At the provincial levels, there might be inconsistency between cities and provinces due to different interpretation of laws. For investment projects with difficulty to manage, the provincial levels would need to consult with the technical department of central government agencies, as such the time taken to process the investment certificate would be lengthened.

Understanding the mechanism and the work division of Vietnam authorities that evaluate and approve business licensing at different government agencies would help foreign investors to smoothen the process and improve their experience in Vietnam.

It is notable that the government level will be focusing on significant projects, in special areas with large investment capital with impact on social economic situations. Most of the investment licensing procedures will be carried out at the provincial levels where the investment projects exist.

The following will point out directions for foreigners to approach respective agencies based on the particular area of interests, scale, and nature of the investment. However, to avoid delay and increase effectiveness, it is advisable that the foreign clients would consult with Vietnam law firms to help advise and represent them in preparing and executing the investment in Vietnam.

I. Projects evaluated and granted investment licensing at government level

Depending on the business nature, industry sector, investment scale, and investment policy, the Vietnam Prime Minister, on behalf of the government will evaluate and approve investment licensing for setting up business.

1. The investment project in Vietnam the government will evaluate and approve regardless of funding, the scale of investment are in the following areas:

a) Development and commercialization of airports and air transport;

b) Development and commercialization of national port;

c) Exploration, mining and processing of oil and gas; exploration and exploitation of minerals;

d) Radio, television;

e) Casino;

f) Production of cigarettes;

g) Establishment of university level educational institute;

h) Establishment of industrial zones, export processing zones, high-tech zones and economic zones.

2. Although investment projects which do not fall under the cases listed above, but the government of Vietnam also evaluates and approves investment project with investment capital of VND 1,500 billion (around USD 75 mil) upwards regardless of funding and in the following areas:

a) Sales of electricity, mineral processing, metallurgical;

b) Construction of railway infrastructure, roads, inland waterways;

c) Production, sales of wine and beer.

3. Further, the government of Vietnam also evaluates and approve investment projects with foreign investment in the following areas:

a) Maritime transport;

b) Establishment of networks and provision of postal services, courier, telecommunication and internet; network setup and signal transmission;

c) Printing and distribution of newspapers; publication;

d) Establishment of independent scientific research.

4. Where the investment projects specified in the above cases are in the plan which the Prime Minister has approved or authorized other agencies to approve, and that the investment projects meet the conditions prescribed by law and treaties to which Vietnam Nam is a member, the agency granted investment certificates perform the procedure for issuance of investment certificates is not required to submit to the Prime Minister to decide on the investment policy.

5. Where the investment projects specified in the above case is not in the plan which has been approved by the Vietnam Prime Minister or authorized other agency to approve, and that the projects do not meet the conditions for market access provisions in international treaties which Vietnam is a member, the agency granted investment certificates shall consult with other of relevant industries and submit to the Prime Minister for investment policy decision.

II. Projects evaluated and granted investment licensing at ministerial level

1. The Vietnam Ministry of Planning and Investment shall evaluate and approve licensing for investment projects in the form of BOT, BTO, BT.

2. Other ministries will be evaluating and granting licenses for investment in some sectors.

a.Vietnam Ministry of Commerce and Industry shall evaluate and approve licensing for investment project in oil and gas sector;

b. Vietnam State Bank shall grant licensing for financial institutions;

c. Vietnam Ministry of Finance shall be responsible for issuing licenses for investment projects of insurance businesses.

III. Projects evaluated and granted investment licensing at provincial levels

1. Department of Planning and Investment shall be the single point of contact that receive the application and evaluate the investment plan of the foreign investors wishing to establish business in Vietnam for projects

a. Outside of Industrial Zone, Industrial Processing Zone;

b. Infrastructure development project for Industrial Zone, Industrial Processing Zone which management board of industrial zone and industrial processing zone are not yet established.

2. The management board of Industrial Zone, and Industrial Processing Zone:

a. For investment projects within the Industrial Zone, and Industrial Processing Zone which are not under the authority of the Prime Minister;

b. Infrastructure development project for industrial zone and industrial processing zone.

Read More

Which area of business foreign investors could invest in Vietnam?

Recently, Vietnam has been an attractive investment destination to foreign investors thanks to the social-economic innovation policy from the early 80s of the twentieth century to the present. The economic, political and social situation always keeps stability and achieves remarkable developments, establishing trade relations with most countries in the world. Especially, Vietnam Government has been focusing efforts to improve the investment and business environment, which is favorable for not only domestic investors but also foreign investors. The Government has been issuing policies to improve the business environment, support business development and take decisive actions through resolutions and legal documents.

In addition to continuing to implement incentive policies to attract foreign investment such as corporate income tax exemption and reduction, import tax exemption for a number of industries, exemption from rent and land use,...the Government is also committed to reform administrative procedures to simplify procedures, create the best conditions for investors, and opening the economy for foreign investors.

Foreign investors, when investing in another country, must identify their business lines and areas of business, and consult with experts or Vietnam lawyers whether that business line is subject to any special conditions. There are areas without conditions of investment, but there are also industries that are restricted from doing business under strict conditions, and even prohibiting business in specific professions on purpose.

In Vietnam, the investors of Vietnamese are free to do business in areas which are not in the list of prohibited activities. For foreign investors, the business lines allowed to invest are considered based on Vietnam's WTO Commitments on Trade in Services and the Agreements signed between Vietnam and other countries. After that, business conditions in each specific industry to foreign investors will be applied.

General conditions applied to domestic and foreign investors are that investors are entitled to carry out business investment activities in industries and trades which are not prohibited by laws. The industries and trades banned from business investment include: trading in narcotic substances; trading in some toxic chemicals, precursors, minerals; trading in specimens of wild plants and animals according to the provisions of Appendix 1 to the Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of endangered, precious and rare wild animals and plants of Group I originated from nature according to the provisions of the Investment Law; trading in prostitution; buying and selling people, tissues, body parts; business activities related to asexual reproduction on people; and trading in firecrackers.

Apart from the above-said prohibited business and investment lines, the remaining industries and trades are divided into conditional business lines and common business lines. For common business lines, investors can freely invest without barriers. By contrast, conditional business lines impose conditions that must be met if organizations wish to invest. Understanding the business lines is the first step for investors to enter the Vietnam market and consulting with Vietnam lawyers would help investors make informed decisions for their business plan in Vietnam.

Read More

Why Investors Should Set-up Business in Phu Quoc?

The improvement in infrastructure system along with the preferential policies have stimulated investors to come to Phu Quoc to set-up company and do business.

Phu Quoc, an island in Kien Giang of Vietnam is in the top of three islands having tourism potential in Southeast Asia comparable to Phuket in Thailand and Bali in Indonesia. Phu Quoc has become a magnet for attracting huge investment flows from foreign investors in the area of real estate, entertainment, casinos, restaurant or food and beverage service business.

Phu Quoc has temperate weather throughout the year. There are also fresh and friendly forests – sea ecology and the modern transport system on the island with an international airport and international hospital. Moreover, many infrastructure projects and international schools are under construction, which are necessary and favorable conditions to invite and attract investors to Pearl Island for doing business.

Capital inflows to Phu Quoc have really exploded after the “knots” in investment were removed. The new airport went into operation that can welcome larger aircraft and serve more flights, in which there are more international direct flights from China, Singapore, Russia and Cambodia. The 51km long radial route on the island has been basically completed; the road around the island and the branch roads are also being deployed. The power grid was pulled from the mainland to the island, replacing the very high cost gasoline power in the past.

The real estate and tourism consultants all agree that Phu Quoc fully convergent elements of an attractive beach for tourists with year-round sunshine, many beautiful beaches such as Long Beach, Truong Beach, Khem Beach and immense virgin forest. Moreover, Phu Quoc has a strategic location with just 1-2 hours flight to the key tourism markets in Southeast Asia.

Both investment and tourism in Phu Quoc have entered the acceleration phase. By the end of July 2015, Phu Quoc had attracted nearly 200 investment projects, including 136 projects that are being implemented in the area of over 5,100 ha with total registered capitals of 6.5 billion USD. Just one part of those projects become reality then it will make Phu Quoc to become a leading tourist destination in Vietnam, ahead of Da Nang and Nha Trang, competing with the top destinations in the area as Phuket and Bali.

Some of the largest Vietnam corporations such as Vingroup, Sun Group, CEO Group, BIM Group are implementing huge projects that could alter the appearance of the island. In which the giant in the real estate sector – Vingroup has invested projects as: Vinpearl Resort on an area of 300 ha in Long Beach, the combining of golf course and safari zoo on an area of more than 2,000 ha, and the 80 ha commercial complex.

The improvement in infrastructure system along with the preferential business and legal environments i.e. favourable land rental rates, corporate income tax, exemption of visa for foreign tourists make Phu Quoc island of Kien Giang, Vietnam a new attractive place for investment.

Read More

“Golden Opportunity” To Welcome FDI Movement

There are “golden opportunities” for the world to know Vietnam and invest in Vietnam, with a special advantage of “strategic trust”, a safe investment destination and ready to welcome shifting capital flows. But taking advantage of opportunities or not depends on the actions of Vietnam.

There is no doubt that there is a wave of foreign investment moving away from China into Southeast Asia, including Vietnam.

Vietnam company formation

Vietnamese Media Search

In fact, the trend of shifting investment from China into Vietnam has started to become stronger since last year, after the US – China trade war became more and more complicated. The Covid-19 pandemic has accelerated this trend. Not only the administration of President Donald Trump, but also many European countries, including Japan have also called and announced their willingness to support their companies to move production out of China to reduce dependence on this economy.

Perhaps, because of that, for the first time, Apple is stepping up the production of AirPods wireless headphones in Vietnam, the number can be up to millions of products. And not only headphones, but many other important components are also expected to be manufactured in Vietnam, helping Apple no longer have to rely heavily on suppliers from the Chinese market. Recently, Apple Vietnam has announced the recruitment of many important technical personnel, and the move is thought to be made to better monitor the production of these components in Vietnam.

Both Microsoft, Samsung, LG and many other large and small corporations are also investing in Vietnam market.

Speaking at the Prime Minister’s meeting with businesses, representatives of European, Japanese, Korean and US businesses… in Vietnam have confirmed their interest in Vietnam’s investment destination.

In the first four months of 2020, foreign investment in Vietnam tended to decline, but according to the Deputy Minister of Planning and Investment, Vietnam was still a lucky market, as one of the few countries in the world still recorded positive investment flows. If Vietnam early controls the epidemic and the positive macroeconomic prospects return from the third quarter, it may benefit from the shift of foreign investment flows.

Read More

Vietnam is ready to attract investment after the pandemic

The Covid-19 pandemic is spreading strongly around the world, affecting the world economy. A number of countries, with efforts to prevent, gradually control the spread of the disease and are entering the stage of economic recovery after the epidemic, including Vietnam.

With efforts in disease prevention, since mid-April 2020, Vietnam has basically prevented the pandemic which form the basis for attracting investment and developing production. Among Southeast Asian countries, it is forecasted that Vietnam will still be the country with the highest GDP growth rate in 2020, so investing in Vietnam is an opportunity for both domestic and foreign investors to apply for investment registration, set up company and factory.

On May 9th, 2020, the Government of Vietnam proposed economic development plans and plans to attract investment in Vietnam after the pandemic. The Government has launched many measures to support businesses such as reducing corporate income tax for small and micro enterprises; exemption from agricultural land use tax; adjusting export and import tax to support the operation of enterprises. In addition, the Ministry of Finance will also study and propose to delay the deadline for holding the General Meeting of Shareholders by 3 months (until before September 30), reducing the deadline for information disclosure of treasury stocks (from 7 days to 1-2 days left); increase the credit limit for securities industry; allowing enterprises with foreign direct investment (FDI) if eligible to be listed on the stock market.

Currently, Vietnam’s prestige and position are highly appreciated by the international community for its success in the prevention of pandemics, which shows that Vietnam is a desirable destination for international investors in the situation. Besides, the spread of pandemic in many countries around the world are complicated. In addition, the Covid-19 pandemic has created new awareness in changing consumer tastes, trading with remote principles, limiting exposure, developing new online businesses based on digital economy, pharmaceutical chemicals, e-logistics, etc. this case will give international investors many market opportunities when investing in Vietnam.

In order to seize the opportunity to welcome the wave of investment in Vietnam, the Government of Vietnam has devised many plans to attract and support investment, in order to help foreign investors can shift their investment to Vietnam in this time for applying for investment registration and business registration, to set up company and factory. In the coming time, with the prevention efforts and the plan to attract investment, Vietnam is expected to be a safe destination both for the health and economy of international investors.

Read More

How to Set up Foreign Owned Company in IT and Computer Related Service?

Information technology and computer related service have played an extremely important role in life as well as in business activities on global scale. The industrial revolution 4.0 has comprised of many technologies and IT and computer service take a big part of such. The laws of Vietnam and the international commitments to which Vietnam is a party have no restrictions on foreign investors in terms of both the form of investment and the proportion of capital contribution in business in this field. Further, Vietnam prioritizes and encourages development in the field of IT and computer services which is considered attracting high level of intelligence and green business. The investors have grown confidence in Vietnam’s increasingly improved legal systems to protect the Intellectual Property rights in trademark and copyright to protect the company and individuals to exploit economic benefits in IT and computer related service areas.

Business consultants in Vietnam

Establish company in Vietnam

Vietnam company formation

IT is the core foundation of smart city, intelligent transport system, intelligent education. Computer services and related services include: consulting services related to computer hardware installation, software implementation services, data processing services, database services, services maintenance and maintenance of office machinery and equipment, including computers and other computer services.

Under Vietnam’s WTO commitments, foreign investors are allowed to set up 100% foreign-invested enterprises to conduct business in IT and computer services and related services. At the same time, it is allowed for computer service business enterprises to set up branches when there is a need to generate additional business activities at locations outside the head office of the enterprise.

To establish an enterprise with 100% foreign invested capital, investors need to apply for an Investment Registration Certificate in accordance with the Law on Investment 2014 and an Enterprise Registration Certificate in accordance with the Law on Enterprise 2014.

A dossier of application for an Investment Registration Certificate comprises: a written request for implementation of an investment project; copy of identity card, citizen identity card or passport for individual investor and copy of establishment certificate or equivalent document certifying legal status for institutional investor; investment project proposal; copies of the latest 2-year financial statements or commitment of financial support of the parent company or financial institution or guarantee of investor’s financial capacity or documents explaining the financial capacity of the house invest; a copy of the location lease agreement or other documents certifying that the investor has the right to use the project location. If the project uses technologies on the list of technologies restricted from transfer, the explanation of the use of technologies must be submitted. Within 15 days from the date of receiving the complete and valid file, the Department of Planning and Investment will issue the Investment Registration Certificate to the foreign investor.

An Enterprise Registration Certificate dossier comprises: an application for enterprise registration; enterprise’s regulations; a list of members of a limited liability company with two or more members or a list of general partners; a notarized copy of identity card or valid passport of individual member; a notarized copy of the Enterprise Registration Certificate of the organization’s member; a notarized copy of valid identity card or passport of the organization’s legal representative; copy of Investment Registration Certificate. After 03 working days from the date of receiving a complete and valid dossier, the Department of Planning and Investment will issue an Enterprise Registration Certificate.

For the establishment of a branch, a dependent unit of the enterprise, tasked to perform all or a part of the functions of the enterprise, including an authorized representative function, business lines of a branch must be consistent with the business line of the enterprise. When registering a branch operation, the enterprise must send a notice of setting up the branch to the Business Registration Office where the branch is located. A dossier of establishment of a branch comprises of a notice of establishment of a branch; branch establishment decisions; decisions to appoint branch heads; minutes of meeting of establishment of branch; copy of the Business Registration Certificate; copy of identity card or Passport of the head of branch. Within 3 working days after receiving a valid dossier, the Enterprise Registration Office shall grant a branch operation registration certificate.

Read More

How To Set-up Trading Company in Vietnam

Investment in setting up trading company in Vietnam is considered as investment in conditional investment areas

Once an underdeveloped country, in the last two decades Vietnam has shown an incredible growth in the world economic scene, especially in the criteria of investment attraction. For a foreign company that is interested in expanding the business in a new country or region, Vietnam is a promising destination. In order to start a company or specifically a trading company in Vietnam, foreign investor should comprehensively understand the formality and function of the legal entity to be formed according to Vietnam Law. The consultancy and guidance of skilled and qualified lawyers in Vietnam law firm throughout the process shall mostly be needed.

The legal basis for a foreign company to set up a company in Vietnam is stated in the Enterprise Law of Vietnam: foreign organizations and individuals will be entitled to establish and manage enterprises in Vietnam in accordance with this law, with some exceptions. Foreign investors may invest in the form of 100% foreign- owned capital to establish limited liability companies, joint-stock companies, partnerships or private enterprises under the provisions of the Enterprise Law and relevant laws.

The foreign investor shall mostly needs to fulfill the investment registration procedures at provincial-level state agencies in charge of investment in order to be granted the investment certificates, in accordance with Vietnam law in investment. The dossier required for the investment registration shall comprise of an examination dossier, papers showing the capability to satisfy the conditions which the project is required by law to satisfy, for investment projects in conditional investment domains i.e. specific goods to be traded at HS code level, experience in trading area, how the trading procedures would be carried out, potential business in Vietnam.

In particular, for investment capital, it should be noted that, trading company needs to commit larger investment in terms of capital, since its function is to identify competitive suppliers, negotiate and purchase their products and sell them through a distribution network in Vietnam. In the meantime, the investor needs to have experience in trading to run the business smoothly and efficiently. The investor should explain why the company would contribute to the development in Vietnam when applying for investment license at Department of Planning and Investment, and Ministry of Trade and Commerce.

Read More

How to Set-up Travel Services Business in Vietnam

Foreign investor could only set-up joint venture with Vietnam travel agency to set-up travel services business in Vietnam because transport of passenger belongs to investment areas with conditions applied to foreign investor inVietnam.

No one could deny that information technology has tremendously changed the way travel services business operates. The use of booking reservation system application on smartphone and internet are widespread that make travel has never been easier. Foreign investor would be interested to explore the travel services market. However, 100% foreign owned company is not allowed to set-up in travel services business in Vietnam. As this investment area is conditional, it is advised that a law firm in Vietnam should be consulted to ensure compliance with local regulations.

The application process and documents requirements are briefly as following:

I. Required documents:

-Application for the International Travel Business License (form);

-Certificate of business registration (copy – certified)

-Business plan for the international travel agency;

-Tour schedule

-Proof of at least 4 years of experience in international travel business operations

-Certified copies of the tourist guides’ cards whereby at least 3 international tourist -guides are required

-Confirmation of bank deposit (as per regulations);

Proof of office premises or legally registered place of business

Business consultants in Vietnam

Vietnam company formation

II. Business License Application Procedure

-Submission of the required documents to the correct authority (Department of Culture, Sports and Tourism of the province/city where the business is headquartered).

-The Department of Tourism of the province/city completes the records of appraisal and submits a written request with the agency’s records to the Minstry of Culture, Sports and Tourism in Vietnam within ten working days from the date of receipt of a valid application. When cases are not eligible for the proposed permit to the state agencies, the provincial tourism department shall cite the specific reasons for refusal.

-The state management agency of tourism (VNAT – Ministry of Culture, Sports and Tourism) is responsible for reviewing and licensing the international travel business within ten working days from the date of both receipt of the file and written request of the state agency of tourism in the province. In case of refusal, the ministry shall state the specific reasons to the state and provincial tourism authorities

III. Number of records

– Submission to the Department of Culture, Sports and Tourism: 01

– Tourism Authority Filed in: 01

Read More

What Procedures an Enterprise Complies on Publishing Business Information?

Provisions on announcing of business information are stipulated in the Law on Enterprise and other decrees which company has to comply as part of compliance procedures.

After being granted an enterprise registration certificate, under the Enterprise Law, an enterprise must publicly announce it on the National Business Registration Portal according to the order, procedures and pay fees as required. The application for publication of enterprise registration information is a compulsory procedure, made at the time an enterprise submits its enterprise registration dossier. Information about publication of enterprise registration information is posted on the National Business Registration Portal. The content to be published includes the contents on the enterprise registration certificate and the lines of business. In addition, for joint stock companies with foreign investors, a list of founding shareholders and foreign investors is required. In case of changes in enterprise registration contents, the corresponding changes must be publicly announced on the National Business Registration Portal.

Provisions on form, time and content of announcement are different from those in the Law on Enterprise, specifically, within a period of thirty days from the date of being granted an enterprise registration certificate, an enterprise must publish information in one of the forms posted on the business information network of the business registration agency or one of the written or electronic newspapers in three consecutive issues. The main content to be published includes: Company’s name; Address of the head office of the enterprise, branch or representative office; Lines of business; Charter capital of limited liability company and partnership company; number of shares and value of contributed capital and number of shares to be issued with joint stock company; initial investment capital for private enterprises; legal capital for enterprises conducting lines of business requiring legal capital; Full name, address, nationality, ID card number, passport or other legal personal identification number, establishment decision number or business registration code of the owner, member or shareholder foundation; Full name, permanent address, nationality, ID card number, passport number or other legal personal identification of the legal representative of the enterprise; Place of business registration.

For publication fees, according to the provisions of Circular no. 47/2019/TT-BTC stipulating the rates, collection, payment, management and use of information provision charges of enterprise information that takes effect from the date of On September 20, 2019, the enterprise registration fee and the enterprise registration content announcement fee are VND 100,000/time, instead of the VND 300,000/time as stipulated in Circular no. 215/2016/TT-BTC regulating the rates, collection, remittance, management and use of charges for provision of enterprise information and enterprise registration fees.

In addition, there are some enterprises that do not need to publish their business information on the National Business Registration Portal before going into operation, but make other forms of announcement. For example, for a law-practicing organization, within thirty days after being granted operation registration papers, law-practicing organizations must publish on daily newspapers of central or local registry of law practice or newspaper for three consecutive issues. For credit institutions, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities, they must be published on the State Bank’s media, and in a daily newspaper written in 03 consecutive issues or an electronic newspaper of Vietnam at least thirty days prior to the scheduled date of operation of opening information as prescribed in Article 25 of the Law on Credit Institutions 2010.

In addition to disclosing corporate information, there is also a procedure for disclosure of information on the stock market that is applicable to public companies and bond issuers (except for government bond issuers and bonds), government-guaranteed bonds and local government bonds), securities companies, fund management companies, branches of foreign fund management companies in Vietnam, public funds. These companies and organizations must comply with the law on securities in the Securities Law announcing on the company’s website and information disclosure system of the State Securities Commission.

Read More

How Business Information Could Be Searched in Vietnam?

Provisions on announcing of business information are stipulated in various laws and degrees in Vietnam, allowing the interested party to be searching for business purpose for information in regard to investment registration certificate number, business registration certificate number and others information.

In particular, after the enterprise being granted an enterprise registration certificate, it shall carry out procedures to publish it on a portal as per procedures and pay the related fees for administration. The application for publication of enterprise registration information is a compulsory procedure, made at the time an enterprise submits its enterprise registration dossier. The content to be published includes the contents on the enterprise registration certificate and the lines of business. In addition, joint stock companies with foreign investors will need to provide information including founding. In case of changes in enterprise registration contents, the corresponding changes must be publicly announced.

Also, an enterprise must publish information in one of the forms posted on the business information network of the business registration agency or one of the written or electronic newspapers in three consecutive issues. The main content to be published includes: Company’s name; Address of the head office of the enterprise, branch or representative office; Lines of business; Charter capital of limited liability company and partnership company; number of shares and value of contributed capital and number of shares to be issued with joint stock company; initial investment capital for private enterprises; legal capital for enterprises conducting lines of business requiring legal capital; Full name, address, nationality, ID card number, passport or other legal personal identification number, establishment decision number or business registration code of the owner, member or shareholder foundation; Full name, permanent address, nationality, ID card number, passport number or other legal personal identification of the legal representative of the enterprise; Place of business registration.

For publication fees, the enterprise registration fee and the enterprise registration content announcement fee are VND 100,000/time.

There are some enterprises that do not need to publish their business information on the portal before going into operation, but make other forms of announcing i.e. on newspaper or other media. For instance, law-practicing organizations must publish on daily newspapers of central or local registry of law practice or newspaper for three consecutive issues. For credit institutions, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities, they must be published on the State Bank’s media and in a daily newspaper written in 03 consecutive issues or an electronic newspaper of Vietnam at least thirty days prior to the scheduled date of operation of opening information.

In addition to disclosing corporate information, there is also a procedure for disclosure of information on the stock market that is applicable to public companies and bond issuers (except for government bond issuers and bonds), government-guaranteed bonds and local government bonds), securities companies, fund management companies, branches of foreign fund management companies in Vietnam, public funds complying with law on securities detailing information disclosure, announcing on the company’s website and information disclosure system of the Securities Commission.

Read More

Can Employer Terminate the Labor Contract with Employee Due To Covid 19 Outbreak?

Due to intricate occurrence of Covid 19, many enterprises are forced themselves to reduce the number of employees for maintaining the operation financially. Specifically, the employer has to make difficult decision to terminate the labor contract with the employee. The termination of the labour contract has to be considered carefully because of potential legal risks brought up which dispute lawyers in labour should be consulted before execution. Within this post, we are not trying to resolve all cases but only aiming to brief some matters of concern for preparation.

Risk Consulting in Vietnam

Vietnamese Media Search

The employer could refer to the regulation in the Labor Code which allows “an employer may unilaterally terminate a labor contract if as a result of natural disaster, fire or another force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs. Force majeure in this case is understood as (i) Enemy-inflicates destruction, epidemics (ii) Relocation or narrowing of the production and business sites, at the request of competent State agencies.

In particular, after applying corrective measures, over the time, considering enterprise’s financial potential is insufficient as well as the business production is reduced significantly due to epidemic, the employer may consider unilaterally terminate labor contract with employee. However, employer still have to abide by or ensure the rights to employee regarding the interests which employee is entitle to receive when being unilaterally terminated labor contract includes salary, severance allowance, social insurance, payment for untaken leave days, the tax payment which employer must paid for employee. Besides, employer also is subject to pay a compensation if consented by both sides are employer and employee.

Firstly, employer is obliged to pay salary to employee timely and fully as in the agreed labor contract by both parties;

Secondly, employer is responsible for paying the severance allowance to employee whom has worked regularly for full 12 months or longer at the rate of half of a month’s wage for each working year.

Thirdly, social insurance, employer is responsible for the fulfill payment of social insurance and perform the closing insurance book for employee after terminate the labor contract according to the law of social insurance.

Fourthly, if the income of employee subject to personal income tax, employer must extract from the income of employee to submit the tax to tax agency according to law on personal income tax.

If the client needs any other information or requires for further advice, our lawyers at ANT Lawyers in Vietnam will be available for service.

Read More

What are common investment methods in Vietnam?

In Vietnam laws, there are a number of investment methods such as establishing economic organizations; investment in the form of capital contribution, purchase of shares or capital contributions in business organizations; Business Cooperation Contract or Public Private Partnership. Investment in establishing economic organizations, capital contribution, purchase of share or capital contributions are most common in our opinion.

Investment in establishing economic organizations

For investment in the establishment of economic organization, an investor invests capital to carry out the establishment of an enterprise, cooperative, cooperative union or other organization to carry out business investment activities. This is a way of direct investment in which investors directly invest capital and directly participate in management activities.

Forms of establishment of economic organizations include two types: Establishing company with 100% foreign capital; or establishing joint ventures between domestic investors or the Government of Vietnam with foreign investors.

Before establishing an economic organization, the foreign investor must have an investment project and carry out the procedures for the grant of an investment registration certificate. Besides, the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member need to be met. Regarding charter capital, foreign investors are allowed to hold unlimited ownership in economic organizations, except for cases where the investors operate in fields related to listed companies, public companies, securities trading organizations and securities investment funds in accordance with the law on securities; State owned enterprises equitized or transformed under other forms. In addition, investors must check international treaties to which Vietnam is a signatory.

Set-up branch office in Vietnam

Set-up representative office in Vietnam

It should be noted that depending on the amount of investment capital of a foreign investor, the legal status of an economic organization after its establishment will be determined differently. If the foreign investor holds 51% or more of charter capital, the economic organization after its establishment will have to carry out the procedures applicable to foreign investors. Conversely, if foreign investors hold less than 51% of the charter capital, the regulations applicable to economic organizations after their establishment are applied as domestic investors.

Investment in the form of capital contribution, purchase of shares or capital contributions in business organizations

Foreign investors who wish to access the Vietnamese market but do not want to establish an economic organization can contribute capital, buy shares or buy capital contributions to business organizations operating in Vietnam.

With this form, the investor will become a member or shareholder of that economic organization. It requires investors to meet a conditions similar to the form of establishment of economic organizations. Having said that, it must meet the conditions for the charter capital ownership and the conditions prescribed by international treaties to which Vietnam is a member. Depending on each specific case, the investor must follow the procedures for registration of capital contribution, purchase of shares or capital contribution in an economic organization and send to the competent agency for recognition of legal investment.

Understanding the regulations are important for investors to enter the Vietnam market and consulting with Vietnam lawyers would help investors make informed decision for their business plan in Vietnam.

Read More