Vietnam offshore company formation

Foreigners are allowed to register their company in Vietnam for starting a business.

In most industries, they can own 100% of the shares of their business. In a few selected industries, company registration in Vietnam is only allowed in a joint venture agreement with a Vietnamese individual or corporate shareholder.

One IBC’ Vietnam company registration specialist will advise you with regards to the need for a joint venture partner.

Read more:

• How to set up a company in Vietnam?
• Types of company in Vietnam

Yes. in many ways.

Foreigners registering a new business in Vietnam are notably required to open a capital account in the country, which they will have to use in other to inject their company’s share capital.

Read more: The first step in setting up a company in Vietnam

Not necessarily. A foreign investor may set up a new legal entity as a wholly foreign-owned enterprise (“WFOE”) or as a JV (and contribute capital to this entity): in this case, an investor must apply both for an investment registration certifcate (“IRC”) and an enterprise registration certifcate (“ERC”), which was formerly called a business registration certifcate (“BRC”). A foreign investor may also contribute capital to an existing legal entity in Vietnam, which does not require an issuance of an IRC or ERC.

Thus, in respect of foreign investors carrying out their frst project in Vietnam, the incorporation of the Vietnamese legal entity takes place simultaneously with the licensing of their frst project. In other words, a foreign investor cannot incorporate a legal entity without a project. However, subsequent to the frst project, an investor may carry out additional projects either using the established legal entity or by setting up a new entity.

Read more:

• Starting a business in Vietnam
• Types of company in Vietnam

A foreign investor (just like a local investor) may select one of the following Vietnamese legal entities to carry out a project:

• A limited liability company (“LLC”), in the form of either a single-member LLC (“SLLC”) or an LLC with two or more (up to a maximum of 50) members (“MLLC”).
• A shareholding or joint stock company (“JSC”) which is a company with at least three shareholders but no maximum number of shareholders.
• A general partnership or a limited liability partnership.
• A private enterprise (akin to a sole proprietorship).

Read more:

• Vietnam company formation
• Company registration fees in Vietnam

The two main factors that lead a foreign investor to choose a JV are:

• (i) some business sectors in Vietnam require a JV to establish a commercial presence in Vietnam; and
• (ii) the Vietnamese party has a key asset, local know-how and knowledge, or other factors that make the JV the preferred choice.

For example, in real estate development projects, the Vietnamese party usually has the land use rights, which by law cannot be directly transferred to a foreign investor, but may be contributed into a JV.

Read more:

• 100% foreign owned company in Vietnam
• Vietnam company registration

The standard Vietnam corporate income tax (CIT) rate is 20%, though enterprises operating in the oil and gas sectors will be subject to rates between 32% and 50%;

Dividends paid by a Vietnamese company to its corporate shareholders will be completely tax exempt. Furthermore, no withholding tax will be imposed on dividends remitted to overseas corporate shareholders. For individual shareholders, the withholding tax will be 5%;

Interest payments and royalties paid to non-residents individuals or corporate entities will be subject to withholding tax of 5% and 10% respectively;

Personal income tax for residents is levied under a progressive system, ranging between 5% and 35%. However, for non-resident individuals, the tax is levied at a flat rate of 20%.

Read more:

• Accounting and tax services in Vietnam
• Vietnam company registration

There are three VAT rates in Vietnam : zero percent, 5%, and 10%, depending on the nature of the transaction.

Vietnam tax rate of zero percent applies to exported goods and services, international transportation and goods and services not liable to value-added; offshore reinsurance services; credit provision, capital transfer and derivative financial services; post and telecommunications services; and exported products which are unprocessed mined resources and minerals.

Read more:

• Vietnam corporate tax rate
• Can a foreigner own a business in Vietnam?

Annual corporate income tax returns must be filed with the General Department of Taxation within 90 days from the end of the fiscal year. However, the company will be required to make quarterly income tax payments, based on estimates.

Accounting records must be kept in the local currency, which is the Vietnamese Dong. They must also be written in Vietnamese, though they may be accompanied by a common foreign language such as English.

A Vietnam-based auditing company must audit annual financial statements of foreign business entities. These statements must be filed with the licensing agency, the Ministry of Finance, the statistics office, and tax authorities 90 days before the end of the year.

Read more:

• Vietnam corporate tax rate
• Accounting and tax services in Vietnam