Foreign entrepeneurs will be releaved to know that the Vietnamese government recently abolished its double pricing system. A joint venture now pays the same statutory fees and prices for goods, commodities or services controlled by the government as Vietnamese-invested companies.

A joint venture is a popular business entity with international investors because it combines the international expertise and technology of a foreign company with the specialist local knowledge of its Vietnamese partner.

Vietnam joint venture partners are required to establish an administrative board to appoint directors one of which must be local, according to the regulations of the Ministry of Planning and Investment.

A Vietnam joint venture requires a minimum of one director and one shareholder. However, a resident director is required.

A common difficulty that foreign and Vietnamese joint venture partners encounter is a clash of vastly different business practices. Vietnamese partners typically seek an early distribution of gross receipts, rather than strategic reinvestment in a business.

There are no minimum capital requirements with a joint venture, and no minimum requirement on the contribution of foreign investors.

All entrepeneurs interested in Vietnam company formation should note that a joint venture is liable to pay a corporation tax of 25% on all taxable income.

A joint venture is required to have its financial statements audited annually and file them with the Vietnam Ministry of Finance.

For more information on Vietnam joint venture formation, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120.

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