Vietnam's government is aiming to create a
favourable environment for foreign investors doing business in the
country. Below are the six key regulatory changes every business
should know when considering to expand in Vietnam.
Here are the six key regulatory changes in Vietnam:
1. Freedom on doing business
Before 1 July 2015, the enterprises were only allowed to conduct
business according to the specified business scope provided in the
investment certificate. From that date on, the enterprises can
conduct business freely and they are not prohibited by the law.
2. Shorten licensing timeline for foreign investors
According to the previous regulation requirements, the licensing
time for green field projects took approximately 45 days. Now the
licensing process only takes 18 days - 15 days for the Investment
Registration Certificate and three working days to obtain the
Enterprise Registration Certificate.
3. Number of legal representatives
A Limited Liability Company can now appoint two or more legal
representatives. This new requirement has a clear intention, direct
involvement of management level - such as General Director or legal
representative - on daily business activities of the enterprise in
Vietnam is strictly required. As a result, the personal income tax
imposing on the legal representative and the availability of
investors' human resources will be impacted.
4. Charter capital requirement
Charter capital (paid-off capital) must be contributed within
three months of the Enterprise Registration Certificate issuance
date. This new requirement seems to be new assessment criteria that
the Government wonders to evaluate the financial capability of
investors. In other words, the Government aims to welcome serious
investors who can be able to commit to disburse or fund the
capitals to their subsidiaries in Vietnam under timely manner.
5. Option of company seal quantity
Businesses can freely determine the number of company seals.
Upon determination, the company seal must show the company's
name and code. The licensing authority must then be notified for
posting this information onto the national business registration
6. Tax incentives
New and expanding investment projects in supporting industry can
now enjoy tax incentives. The preferential tax rates are 10% or
17%, compared to standard rate of 20% in certain period of time, or
whole project life together with tax exemption in several years
followed by 50% tax reduction subsequently.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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