Doing Business in Vietnam
Vietnam Incorporation

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Doing Business in Vietnam for Foreign Enterprises

As one of the fastest growing economies in the world, Vietnam has a stable political system, relatively low inflation, young population, strong manufacturing sector, and increasing FDI inflows. Having moved away from a primarily agrarian economy, it is now committed to becoming a global investment-friendly country. 

Company Incorporation in Vietnam

Foreign investors seeking to set up a company in Vietnam can choose among four types of legal entities:

  • Limited Liability Company (LLC)
  • Joint-stock Company (JSC)
  • Branch Office
  • Representative Office

LLCs and JSCs are the most common legal entities that foreign investors choose. LLCs can be incorporated with only one founder while JSCs require a minimum of three founders. The founders are also required to appoint one director who must be appointed as the company’s legal representative. The representative can be a foreigner who will be required to travel to Vietnam to obtain a work permit and show evidence of 12 months of experience in a managerial position. 

A Vietnamese branch office is an extension of a foreign company seeking to carry out its income-generating business activities into the country. Also a legal extension of a foreign company, a representative office is a non-income generating entity that acts as a liaison office, contact center, or marketing hub for the head office abroad. 

Corporate Taxation in Vietnam

The corporate income tax (CIT) rate in Vietnam is 20%. Corporations belonging to certain industry sectors are subject to higher CIT rates, from 32% to 50%, depending on the location and specific conditions. 

The concept of tax residency for CIT does not exist in Vietnam. Enterprises established under Vietnamese laws are subject to CIT and taxed on worldwide income. 20% CIT shall be applicable to foreign income. But there shall be no provisions for tax incentives for such income. 

Work Visas and Immigration in Vietnam

Foreign nationals seeking to gain lawful employment or do business in Vietnam will need to obtain a valid visa to enter the country. They can choose among the following visas:

  • LD1 visas for foreign workers with work permit exemption
  • LD2 visas for foreign workers who must have work permit to work in Vietnam
  • LV1-LV2 visas for individuals working with Vietnamese authorities
  • DN visas for individuals working with Vietnamese businesses
  • DT visas for investors

Those seeking to live and work in Vietnam on a long-term basis must apply for an LD1 visa. This visa is valid for 2 years and can be extended. In case the work permit is valid for less than a year, the validity of the corresponding work visa must be equivalent to the work permit.

Want to Set Up a Company in Vietnam?

With in-country specialists and a multijurisdictional corporate practice, we are ready to assist you from incorporation and taxation to immigration and corporate compliance.  

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