03 important elements for foreign investors to establish a business organization in Vietnam

03 important elements for foreign investors to establish a business organization in Vietnam

In recent years, due to the open-door policy and attracting foreign investment capital, Vietnam has been an ideal destination for foreign investors wishing to expand the investment market. In particular, Vietnam has made significant improvements, when joining regional free trade agreements, such as CPTPP and EVFTA, helping Vietnam gradually become a new economy with an impressive level of development in the region during that period. However, to invest in Vietnam, investors need to comprehend mechanisms, policies as well as conditions, and preferences to decide the appropriate form of investment, to get benefit optimization, and increase revenues in the future. Here are three remarkable things to keep in mind for foreign investors when establishing a business in Vietnam.

Selecting investment sector

Based on the scope of Vietnam's commitment to opening up in bilateral, multilateral and regional agreements as well as investment demand and capabilities, foreign investors should invest in the investment fields that Vietnam has committed to open to prevent future misfortune. Choosing the investment field that Vietnam has committed to open will help investors save time and costs in the process of conducting investment activities in Vietnam, avoiding the registration of industries that Vietnam has not committed to open.

As mentioned above, first of all, to establish an economic organization in Vietnam, foreign investors must satisfy market access conditions applied to foreign investors. Such conditions include: Holding of charter capital by the foreign investor in a business organization; Investment method; Scope of investment; Capacity of the investor, partners participating in the investment activities. Before establishing a business organization, a foreign investor must have an investment project and carry out procedures for granting and adjusting the Investment Registration Certificate. After being issued an investment registration certificate, the investor will carry out procedures for granting a business registration certificate to establish an enterprise. From the issuance date of the enterprise registration certificate, business organizations established by foreign investors will be allowed to conduct investment projects in accordance with regulations at investment registration certificates.

INVESTMENT INCENTIVES for foreign enterprises having the investment project in Vietnam

Forms of investment incentives consist of: Corporate income tax incentives; Exemption from import tax; raw materials; Exemption from and reduction of land levy and land rents; Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.

Carrying out tax incentives investment activities can make a significant profit for investors, so before conducting investment projects in Vietnam, investors should consider the conditions for being entitled to enjoy such tax incentives to make appropriate investment decisions. Investment area is also an important factor in the investment process. This is the operation place of the business, so it is necessary to choose an investment location in accordance with the needs and investment ability to optimize profits. On the one hand, it is also necessary to select areas eligible for investment incentives to enjoy preferential policies.

Legal consulting services on establishing a foreign enterprise in Vietnam by HTC Law Firm:

- Consulting to choose investment form;

- Consulting investment conditions for foreign investors;

- Consulting on procedures for granting investment registration certificates and business registration certificates;

- Consulting on forms of investment incentives;

- Drafting dossiers for enterprise registration of conditional business lines for foreign investors;

- Representing the Client to work with the competent agencies.

Service Quality Commitment

The following are HTC Vietnam Law Firm’s Principles of Operation: Conscientious - Effective - Reliable. HTC Vietnam Law Firm assures service quality, specifically as follows:

- Ensure that the work is carried out according to the agreed schedule, in accordance with the law, and in accordance with the code of ethics and Codes of Conduct of Vietnamese lawyers.

- Give priority to customers' interests, and make every effort to provide customers with the best quality of service.

- Respect the confidentiality of information that clients provided and information pertaining to the clients.

We are looking forward to a long-term cooperation.

Best Regards!

(Writer: Dương Thị Hoa Thương/165, 24/09/2021

Translator: Nguyễn Thị Liên)