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Doing business in Vietnam

Hi,

are foreign investors welcome in Vietnam?

Is it complicated to register a company in Vietnam? What is the procedure?

What is the corporate tax rate in Vietnam?

Is it easy to recruit?

Any advice you would share with us?

Thank you very much for your participation,

Julien

are foreign investors welcome in Vietnam?

Politically and economically, yes, foreigners are encouraged to do business in Vietnam.  But, administratively, not quite. 

Is it complicated to register a company in Vietnam?

Setting up a 100% foreign-owned company, yes, it takes a lot of time and money.  Last I checked, in the spring of '09, it would take about 6 months and cost around $7,000 USDs. 

Is it easy to recruit?

Recruiting who?  Other foreign investors, no.  Most would much rather not go through the hardships.  Vietnamese investors and employees, yes, it is a cake walk.  Most Vietnamese are western-looking now, therefore, getting them on your team is no big deal, that is if you are a westerner and are able to communicate with them effectively.

Any advice

Team up with a Vietnamese.  A well-grounded and forward-looking one is hard to find but, if you can find one, things will get done a lot faster, easier, and cost much much less.  For example, to register your joint company, it will take less than 5 days and cost only about $100 USDs.  BUT YOU MUST FIND THAT GOOD ONE!!!

Recently, Vietnam has allowed its Viet Kieus to reclaim their citizenships.  Now, there are some good ones there:  they speak your language, share your ideas and hold values that are very similar to you.  But, most important of all, they speak Vietnamese and understand the culture much better than you; therefore, they can better protect your interests.  But, dued to geography and politics, they are just as hard to find as their Vietnamese cousins.

Best of luck to all,
Howie

Thanks for your help Howie!;)

Harmonie.

Look at these links.

National Government Help Website < www.business.gov.vn/index.aspx >

Trade - Ho Chi Minh City < www.trade.hochiminhcity.gov.vn/index.jsp?lang=en >

The biggest risk is losing control of your money.
> Do not bring in money until a deal has been set up;
>Set up a dollar account to 'import' money into;
> Only use SWIFT transfer to bring money in - the records of SWIFT transactions are needed to substantiate source when you want to take money out. DO NOT OVE MONEY FROM AN EXTERNAL ACCOUNT TO A VIETNAM ACCOUNT WITHIN A BANK. You MUST USE SWIFT.

See: < http://auctionfeecalculator.com/iban-transfers.html >, < http://www.ehow.com/facts_5024126_swift … sfer_.html  >.
> So not give other parties singing rights on your V business bank accounts;

I use HSBC and when I transfer funds into VietNam instead of using their on-line banking system I request the external account manager to SWIFT transfer funds to my HSBC account here, giving directions that the funds must be deposited in my Dollar account, in dollars and not converted.

The paper trail is substantial and is easy to prove whereas on-line inter-account transfers are without paper (acceptable to the State Bank of VietNam).

It is difficult to transfer the proceeds from investments out of VietNam so what some people do is to have a 'sales agent' company in your export destination country who 'sells' yur products to end purchasers. This 'agent' (wife, brother, relative, trusted person) takes a disproportionate amount from the sales which represents your profits 0 which are kept in your home country.

You then draw on this external account when you need funds, thereby holding minimal money within VietNam.

If anyone want to invest to Vietnam, I hope that he/she will invest to water engineering major :D

MeoMun :

If anyone want to invest to Vietnam, I hope that he/she will invest to water engineering major

The big investment drive for water systems seems to have faded, even though they are still needed in rural areas.

TP HCM used to have massive water shortages but with investment in turbine water well pumps there is now a sufficient supply of water.

The new crisis is distribution. The plumbing under the streets. Much of it is old, of narrow guage/diameter and insufficient to handle today's needs. Not as bad as Manila but well on the way.

Two new well/pump systems were brought on-line last year in the suburbs which improved their situations.

In most cities, towns and villages pressure is the challenge. For example I was in Hue a couple of years ago when the main supply to a restaurant burst and started flooding. I could actually stop the water flow by sticking my thumb in the pipe. Try that in a North American supply where the pressure is way higher. Toronto water is typically 100 PSI+ in most areas.

With low pressure comes the danger of contamination, external fluids forcing their way into a water system - because the piping has low pressure.

In reality water piping is the responsibility of the municipality, and with tight budgets ... If you were to use private investment to improve systems would require a radical rethink of policy and billing.

Most water degradation in TP HCM occurs within a building where older buildings, with underground concrete water tanks, are home to all sorts of water-borne animals. And what foesin their mouths comes out ... in to the water.

At home in DakLak I have a private water well and I send samples to the Pasteur institute for a safety analysis monthly. Occasionally, when I stayed long term at a hotel in TP HCM I would throw in a sample from the hotel occasionally.

Not nice.

At least we lesser mortals can be satisfied that certain 5-star hotels have water as bad, or even worse, than we enjoy. I have never bought bottled water in TP HCM, I either drink it straight or boil it and keep it in the fridge.

Investment is needed in other areas. In Cho Lon certain production systems would get a good ROI as has been proved in the food manufacturing industry which now has significant exports following the introduction of new technology.

I often see 30 centimetre diameter steel bars being cut using hand tools and eventually ending up in an ancient lathe for machining.

Jaitch :

The big investment drive for water systems seems to have faded, even though they are still needed in rural areas.

Dear Jaitch,
First of all, I would probably say that you have a broad knowledges about Vietnam.
And I know that the treated water quality is not good, as well as presently water engineering can not make a huge profit in Vietnam. An addition point, members who join this forum, mostly invest invidual, I mean not a big company/organization.
But I implied that may be some companies will bring work from over the world and rent employers in Vietnam workforce, so I will have more changes to work in international company. Because international water engineering companies which are available in Vietnam mostly interested in senior engineers, not junior engineers (as me).

MeoMun :

... not junior engineers (as me).

I find the Vietnamese open to all sorts of sources for ideas, even the government. The VAT system was designed by Canadian-Vietnamese.

The VN do not regard a lack of knowledge as a "loss of face", they welcome help from anyone.

Technical training is not as broad as many countries.

I teach plumbing and house wiring to a technical school on a volunteer basis. The electrical course relies heavily on existing modules which are connected together. I teach them differently.

Each student is required, by me, to make sound electrical joints, how to dress a fuse box (most VN houses only have a single breaker - I teach them to use more).

I create unusual challenges such as making a circuit with four switches and a single light. One way and two way switching is easy, three and four switches needs thinking about.

Likewise with plumbing. How would you feed/fill a water storage tank AND use the SAME pipe to draw water from it. Use of inspection traps (not many of those here), etc.

Eve the teacher sat in on some of mu classes as he felt he could learn.

So don't discount your "junior" status, sharing knowledge will make it unnecessary to bring in foreign workers.

international water engineering companies which are available in Vietnam mostly interested in senior engineers, not junior engineers (as me).

That is not al­ways true, MeoMun.  Perhaps, it is a case now because their numbers are few and far in between; therefore, they tend to be a little picky.  But, typically, foreign companies come with superior technical know-hows.  So, younger and more creative employees are often preferred.

Vietnamese open to all sorts of sources for ideas

We have to be, Jaitch, after 5000 years and we still don't know how to use "inspection traps."  Protectionism really did it to us.  A lesson learned... the hard way.

Howie

Hi,
U should have advices for a law company to go through or help you finish documents policies.
there r many Veitnamese can speak English nowaday so it is a big deal to recruit.
Consider carefully what u want to do business here to get more success
Ha Jessian

Wild_1 :

... we still don't know how to use "inspection traps."  Protectionism really did it to us.  A lesson learned... the hard way.

I never used the word 'know', the fact is very, very few VN buildings have sewer or plumbing inspection/access points, even new buildings.

The condominium building my office is located in is 5 years old. No U-traps are fitted to sinks to stop sewer gases entering apartments. The builder claims that a U-trap his plumber put in the main stack in the garage is 'good enough' tell that to the residents who wake up with sewage smells in their kitchens and bathrooms.

I was staying at a 405 star hotel last year and a guest had dropped a sanitary napkin down the toilet. It blocked the main sewer drop. To clear the obstruction the plumbers had yo knock a hole in a wall, expose the blocked pipe, cut into the pipe using a flame and then remove the problem.

They then glued a patch on the outside of the pipe, filled the hole in with concrete and then re-tiled and repainted the area.

Haf traps been fitted it would have been one hour, tops, instead of two days. All the rooms above the work area were unable to use their toilets.

The plumbing designers need getting up to speed on this, nothing wrong in learning.

Same with water plumbing. The damn pipes are buried in concrete that makes it hard to locate a leak and hard to repair the leak.

The technical instruction methods used in VN involve too much instructor chat and not enough practical. You learn more from wiring a system than plugging wires in to modules.

It.s nothing to do with history, it's a matter of learning present techniques.

Had VN had enough qualified people they wouldn't have needed to hire hundreds of Koreans to work on the Bitexco Financial Tower - electricians, plumbers, etc. It would further improve the financial situation by making VN more self-sufficient.

VN construction workers are well motivated and often complete construction on time an under budget. It;s like icing on a cake, a few more well trained trades will make a world;s difference.

Wild_1 :

Team up with a Vietnamese.  A well-grounded and forward-looking one is hard to find but, if you can find one, things will get done a lot faster, easier, and cost much much less.  For example, to register your joint company, it will take less than 5 days

Ok here's a question for the experts. If you set up a company with a VN partner, can a foreigner then obtain a work permit and temp residency card through that partnership?

laidbackfreak :
Wild_1 :

Team up with a Vietnamese.  A well-grounded and forward-looking one is hard to find but, if you can find one, things will get done a lot faster, easier, and cost much much less.  For example, to register your joint company, it will take less than 5 days

Ok here's a question for the experts. If you set up a company with a VN partner, can a foreigner then obtain a work permit and temp residency card through that partnership?

YES! ..... (if the foreigner can). The work permit will expire with the closure of the company, because somebody has made only 1/2 the job. The remaining half is, the 51%-holder has no decision and or signing rights and no access to financial resources.

Laidbackfreak,

On my company's charter, I am the majority shareholder and thus its Chairman.  With that, I was granted a 2-year Temporary Resident Card by the local authorities.

I could have gotten the Work Permit, if I wanted to hold one of the executive positions.  But, I didn't see any need for that.  My local friends were better connected, therefore, they could locally represent the company much better than I could.

Hope that helps.
Howie

Jaitch,

I don't know how construction crews are, where you are at.  But, in the Mekong Delta, where the ground is very soft, these guys are terrible.

My friends and I just got back from new house hunting.  The homes that we visited...  They had only been built for a couple of months and the walls are cracking already.

Whatever happened to dry-walls here? 

Howie

Wild_1 :

Laidbackfreak,

On my company's charter, I am the majority shareholder and thus its Chairman.  With that, I was granted a 2-year Temporary Resident Card by the local authorities.

I could have gotten the Work Permit, if I wanted to hold one of the executive positions.  But, I didn't see any need for that.  My local friends were better connected, therefore, they could handle the company's operations much better than I could.

Hope that helps.
Howie

You are Vietnamese? - then you have since your return the same rights, like any Vietnamese - no need for a work permit. Even if grown up in CA

Hi l3ully,

Yes, I was borned here.  But, Vietnamese laws saw me as an American, thus did not recognize my civil rights. 

When I went to file the arcicles of incorporation, I had to use my US passport.  It was the only document I had.  But, once I recieved the company's charter, which accordingly listed me as an American, everything was made easy and I recieved my TRC.

Then, after having been here for over one year, I went to Vietnamese Immigration and reclaimed my Vietnamese citizenship and my rights were restored.

It wasn't fun, neither was it cheap.  But, I managed to save a lot of money.  It would have cost 3 times more if I were to go through the Vietnamese Consulate in San Francisco.

Howie

You are Vietnamese? - then you have since your return the same rights, like any Vietnamese - no need for a work permit. Even if grown up in CA

In theory, yes.  But, in practice, no.  To enter Vietnam, I had to get visas just like everyone else.

Howie

Wild_1 :

Hi l3ully,

Yes, I was borned here.  But, Vietnamese laws saw me as an American, thus did not recognize my civil rights. 

When I went to file the arcicles of incorporation, I had to use my US passport.  It was the only document I had.  But, once I recieved the company's charter, which accordingly listed me as an American, everything was made easy and I recieved my TRC.

Then, after having been here for over one year, I went to Vietnamese Immigration and reclaimed my Vietnamese citizenship and my rights were restored.

It wasn't fun, neither was it cheap.  But, I managed to save a lot of money.  It would have cost 3 times more if I were to go through the Vietnamese Consulate in San Francisco.

Howie

Nobody speaks about the price. Still, with Vietnamese root you have different rights, which you don't apply to all foreigners.

just seeing the above reply- I agree totally


As a note, even someone states, he/she is from - the roots are visible in writing

l3ully,

I did not put the price that I paid for 2 reasons.  First, as an American businessman, I had long learned that when prices reach a certain threshold, they are best not listed.  Second, my case was unique; I have a personal background like no other.  Therefore, I had to pay really high.  I just didn't want to discourage others...

As for the rights and priveledges that you think people like myself have over others...  Don't even go there my friend.  Things are not what they look like from afar.  It is a pretty big can of worms.

Howie

its always recommended to boil water first before consumption..

Jaitch :

So don't discount your "junior" status, sharing knowledge will make it unnecessary to bring in foreign workers.

Wild_1 :

That is not al­ways true, MeoMun.  Perhaps, it is a case now because their numbers are few and far in between; therefore, they tend to be a little picky.  But, typically, foreign companies come with superior technical know-hows.  So, younger and more creative employees are often preferred.

Theoretically, I would probably say that it is true.
But how unfortunate am I, mostly water engineering works are available in HCMc
An example I found in Hanoi:

•• Requirements:

- Civil or Environmental degree qualified, preferably higher degrees
- 10+ years experience
- Excellent technical & presentation skills
- 5 + years Management, training and leadership experience
- Project proposal written experiences
- English: excellent written and spoken
- Consultancy background desirable however not essential
- Negotiation and problem solving abilities.
-----
•• Desirable:

- Experience with some appropriate software/programs (AutoCAD, GIS, EFDC, ECOMSED, CH3D, TABS, MIKE11/MIKE21, HEC-6, GSTARS, AGNPS, WASP 7.3, QUAL2E, CE-QUAL-W2, CE-QUAL-RIV, HEC-HMS, TR20, SWMM, ICPR, HSPF, AGNPS, HEC-RAS, FESWMS, ArcGIS0, MapInfo)

MemMun,

Why don't you move south and work like many others?  Nowaday, with the advancement of the internet and availability of smart-phones, it is not all that hard to keep in touch. 

If I remember correctly, flights from HCMC to Hanoi leave every hour and they take just a little over 2 hours.  It is not all that bad.  If you ask me, that would not be half as bad as not being able to work in your chosen field... 

Howie

Hi,

Register a 100% foreign owned enterprise in Vietnam is not difficult. Normally it take 15 days after completed and duly file dossiers is submitted. In case you business line is in the conditional sector and the project is more than 300 billion VND (around 16-17000 USD) then it will take 43 business days.

Get a laywer to complete procedure for you as it will ease all hassles

Coporate tax in Vietnam is 28%

Not so difficult to recruit as many educated people are out there in big cities. Just try to understand the culture and body language, sentiments of people and you will find yourself in win-win.

About corruption and transparency, Vietnam is still much better than others Asia country. Believe me,saying this not because I am Vietnamese but my experiences...gained with pains when I do business in India and other Asia.

All the best.

bigcoliflower :

Hi,

Register a 100% foreign owned enterprise in Vietnam is not difficult. Normally it take 15 days after completed and duly file dossiers is submitted. In case you business line is in the conditional sector and the project is more than 300 billion VND (around 16-17000 USD) then it will take 43 business days.

Get a laywer to complete procedure for you as it will ease all hassles

Coporate tax in Vietnam is 28%

Not so difficult to recruit as many educated people are out there in big cities. Just try to understand the culture and body language, sentiments of people and you will find yourself in win-win.

About corruption and transparency, Vietnam is still much better than others Asia country. Believe me,saying this not because I am Vietnamese but my experiences...gained with pains when I do business in India and other Asia.

All the best.

dude, 300billion dong is about 18,000,000USD not 16-17,000usd..

Hi,
There are many kind of tax:
- Annual tax(1time/1 year). The money is 1.000.000vnd or 1.500.000 or 2.000.000 base on your capital.
- VAT have to pay = 10% of your revenue (output voucher) - Total VAT of input voucher -> submit the tax report every month
- PIT: if any
- CIT: 25% (not 28%)*your profit before tax.
And, the license of your company, it's easy to get, just how to run this company.

If you have more question about the tax in VN, please let me know

Angil

Julien :

Hi,

are foreign investors welcome in Vietnam?

Is it complicated to register a company in Vietnam? What is the procedure?

What is the corporate tax rate in Vietnam?

Is it easy to recruit?

Any advice you would share with us?

Thank you very much for your participation,

Julien

Foreign investors are very welcome into Vietnam.  Feel free to contact me for a free Doing Business in Vietnam Guide.

With the new Law on Enterprise 2014 and Law on Investment 2014, which both kicked in on July 1, 2015, registering a foreign-invested company just became a whole lot smoother.

CIT is currently 22% and will be lowered again in the future.

Although it may be hard to recruit people with specific skill sets (e.g. senior software developers), Vietnam has a young, hard-working, educated and talented workforce..

My advice for people doing business in Vietnam is: do your homework carefully and be patient

Good luck!

its very interesting but why Vietnam is it the low cost labor and whats the project
mike

hi good answer can you contact me as il like to pic your brains on another subject also if you dont mind whats your main job there so i can ask a more relevant question possibly.
mike

Dear,
I helped a spanish man to complete the process and some Vietnamese documents in Da nang. If anyone carring about or need someone to help you in the process to get business license. Lets contact me at xxx
I can help you do that as well as translate documents,...

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Hello, can you contact me? I'm wishing apply a business license in Hochiminh.

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