INVEST TO VIETNAM – A GUIDE FROM UNILAW

This article offers a detailed guide for foreign investors interested in investing in Vietnam, with insights from lawyer Nguyen Nhu Hai at Unilaw.

Why Invest to Vietnam?

Vietnam has become an attractive investment destination in recent years. With stable economic growth, favorable policies, and a strategic geographical location in Southeast Asia, many foreign investors see Vietnam as a promising market. For those looking to invest to Vietnam, Unilaw provides an essential guide through the legal requirements and necessary steps.

Understanding Investment Laws in Vietnam

Vietnamese investment laws, particularly as detailed in the Investment Law of 2020, regulate various aspects of foreign investments. As an investor, understanding these laws is crucial, especially regarding ownership structures, business types allowed, and special economic zones. The government has outlined specific rules on business registration, capital requirements, and operational compliance, ensuring transparency and support for investors investing to Vietnam.

Investment Law Overview

The 2020 Investment Law focuses on promoting foreign direct investments while ensuring national security. Key sectors where foreign investment is encouraged include manufacturing, technology, and sustainable development. However, certain areas, such as national defense, remain restricted for foreign investors. This law also defines the procedures for setting up joint ventures and wholly foreign-owned enterprises.

Types of Business Entities Available for Foreign Investors

In Vietnam, foreign investors can establish various types of business entities:

• Limited Liability Company (LLC): The most popular structure for foreign investors, offering flexibility in ownership and management.
• Joint-Stock Company (JSC): Suitable for larger investments and businesses intending to raise capital through stock issuance.
• Representative Office: Ideal for investors wanting to explore the market without conducting direct business activities.
• Branch Office: Allows foreign companies to operate directly in Vietnam without establishing a separate legal entity.

Procedure for Investment Registration

Registering an investment project is a critical step when planning to invest to Vietnam. The process involves several stages, including preparing necessary documents, obtaining an Investment Registration Certificate (IRC), and registering the business entity with the Business Registration Office.

Step 1: Prepare Documents

The first step involves preparing legal documents, including the investor’s legal status, project proposal, and capital verification. Unilaw advises investors to consult with legal experts to ensure accuracy and compliance in documentation.

Step 2: Apply for the Investment Registration Certificate (IRC)

The IRC is crucial for any foreign investor. This certificate confirms the project’s legal recognition and includes information on project location, objectives, and scale. Investors submit their applications to the local Department of Planning and Investment (DPI).

Step 3: Business Registration

After obtaining the IRC, the investor must register the business with the Business Registration Office. This step formalizes the legal existence of the entity and includes registering for a corporate tax code and opening a bank account in Vietnam.

Incentives for Foreign Investors

The Vietnamese government provides several incentives for foreign investors, especially in high-priority industries such as technology, education, and renewable energy. These incentives may include tax exemptions, land rental reductions, and simplified administrative procedures. For instance, investment in industrial parks and export-processing zones often benefits from favorable conditions to stimulate growth in these sectors.

Compliance and Regulatory Requirements

When you invest to Vietnam, maintaining compliance is essential. Investors must adhere to financial reporting, tax filings, and compliance with labor laws. Regular audits and transparent bookkeeping practices help avoid potential penalties and maintain a good standing with Vietnamese authorities.

Financial and Tax Compliance

Foreign investors must comply with Vietnamese tax regulations, including corporate income tax, value-added tax, and any applicable industry-specific taxes. Companies are required to file quarterly and annual reports, and tax audits are common, ensuring adherence to local laws.

Labor and Employment Laws

Employment regulations in Vietnam protect workers’ rights while supporting businesses. Foreign companies must provide fair contracts, adhere to minimum wage laws, and offer social insurance contributions. Consulting legal professionals can help foreign investors navigate labor laws effectively.

Protecting Your Investment in Vietnam

For a secure investment journey, understanding your rights as an investor is essential. Vietnam is a member of multiple international trade agreements, offering legal protection to foreign investors. Unilaw recommends ensuring that contractual agreements are meticulously drafted and compliant with both Vietnamese laws and international regulations.

Dispute Resolution

Disputes are generally settled through mediation or court proceedings. Vietnam supports arbitration as a viable method for dispute resolution, providing a fair environment for both domestic and foreign parties.

Why Choose Unilaw?

Unilaw, with its experienced team and deep understanding of Vietnamese laws, is a trusted partner for those looking to invest to Vietnam. Our legal team, led by seasoned professionals like Nguyen Nhu Hai, ensures that every step of the investment process is handled with expertise and precision. From due diligence to compliance, Unilaw provides end-to-end legal support.

Conclusion

Investing in Vietnam presents numerous opportunities, but it requires careful navigation of the legal landscape. Unilaw’s guidance on invest to Vietnam covers all essential aspects, ensuring your investment journey is smooth and compliant. For more detailed advice, contact Unilaw’s team for a comprehensive consultation.

About Us | Our Lawyers | Case Studies | Legal Services | FDI in Vietnam: Guidance | Vietnam FDI Insights | Investment Guide to Vietnam | Complete Guide to Vietnam Investment | Setting Up Foreign Companies | Overview of Foreign Direct Investment | Vietnam Investment Prospects

Explore More Legal Topics

Adjustment of the Investment Registration Certificate in Vietnam FDI VIETNAM – GUIDANCE FROM UNILAW Re-issuance and correction of information on the Investment Registration Certificate Replacement of the Investment Registration Certificate FOREIGN INVESTMENT IN VIETNAM: UPDATED FOR 2024 Foreign Investment in Vietnam FDI TO VIETNAM – GUIDANCE FROM UNILAW TAX LAW FIRM IN VIETNAM – UNILAW