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| Establishing a Company in Vietnam | |||||||
Establishing a company in Vietnam is complicated and can be challenging for foreign investors due to complicated licensing procedures. However, economic reforms are attracting foreign, export-orientated manufacturing industries.
As Vietnam’s economy continues to evolves and progress, foreign investors interested in starting a company in Vietnam will face fewer and fewer challenges.
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| Advantages of Establishing a Vietnam Company | |||||||
| 1. | In 2007, Vietnam joined the World Trade Organization and implemented economic reforms. These reforms caused a surge of new FDI and portfolio inflows, particularly in trade and investments. Now Vietnam's economy grows at an average of 7.3 % annually; one of the fastest rates in Asia. | ||||||
| 2. | Establishing a company in Vietnam requires a minimum of one director, who need not be resident in Vietnam.
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| 3. | Vietnamese companies recording tax losses can carry them forward for up to 5 years.
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| 4. | There are no minimum capital requirements with starting a company in Vietnam. | ||||||
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Disadvantages of Establishing a Vietnam Company | |||||||
| 1. | All Vietnamese companies, with the exception of a representative office, pay corporation tax of 25%. Following Vietnam company formation, all foreign-invested companies are required to submit annual audited financial statements. | ||||||
| 2. | Vietnam is negatively ranked as the world's 139th freest economy in the Heritage Organisation’s 2011 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.
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| 3. | Vietnam company formation is complex, and this is reflected in Vietnam's low ranking of 78th according to the World Bank's Doing Business 2011 Survey. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business. | ||||||
| 4. | Vietnam suffers from a poor international business reputation. For example, Vietnam is negatively perceived as the world's 116th least corrupt country in the 2010 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. | ||||||
| 5. | Examples of the difficulties of establishing a company in Vietnam include i) to obtain a Vietnam branch office license, the foreign company must have been in operation for three years ii) all foreign documents must be translated into Vietnamese and notarised by a Vietnamese state notary or Vietnamese embassy or consulate. | ||||||
| 6. | Vietnam continues to have rising investments but is still regarded as a risky destination by foreign investors. According to a Japanese External Trade Organization recent survey of Japan firms operating in Vietnam, complaints include high utilities costs, office rentals and skilled labour. Other issues/complaints include official corruption and bureaucracy, the lack of transparent regulations, and the failure to enforce investor rights. | ||||||
| 7. | Vietnam is negatively ranked 59th by the Global Competitiveness Report 2010-2011, one of the world’s most comprehensive and respected assessment of countries’ competitiveness, offering invaluable insights into the policies, institutions, and factors driving productivity. | ||||||
Contact Us | |||||||
For more information on establishing a company in Vietnam, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120. | |||||||
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