In the context of economic integration, Vietnam is one of the most active countries in participating in and negotiating multilateral and bilateral free trade agreements. The benefits of signing and joining these free trade agreements include an increasingly open economy, the removal of barriers for businesses and traders, and especially opportunities to attract foreign investment to Vietnam. 

Establishing a foreign company in Vietnam is no longer unfamiliar or difficult for foreign businesses intending to invest in Vietnam. Therefore, the laws governing the establishment of foreign companies in Vietnam will include the free trade agreements that Vietnam has signed and Vietnamese national law. Below, Faro Vietnam Firm provides the most basic guidelines for foreign businesses to establish a foreign company in Vietnam.

1.  Legal Basis for Establishing Foreign Companies in Vietnam

• WTO Commitment Schedule, bilateral free trade agreements between Vietnam and other countries;
• The 2020 Investment Law and its implementing regulations;
• The 2020 Enterprise Law and its implementing regulations;
• Specialized legal documents related to the investment sector.

2.    Determining the Nationality of Foreign Investors Wishing to Establish Companies in Vietnam

Determining the nationality of an investor helps them see if their country of citizenship is a member of the World Trade Organization (WTO) or if there are free trade agreements between Vietnam and their country of citizenship. Determining the investor's nationality will help them identify what incentives they will receive and what barriers they may face when investing in Vietnam.

Different industries will have different conditions for investors to invest in Vietnam, and each free trade agreement will also have different levels of openness. 

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3. Determining the industries and sectors for foreign companies establishing companies in Vietnam

According to the United Nations' Provisional Central Product Classification (PCPC), the service industries that foreign investors can invest in Vietnam are divided into 12 sectors, including: Business services; Information services; Construction and related technical services; Distribution services; Education services; Environmental services; Financial services; Health and social services; Tourism and related services; Entertainment, cultural and sports services; Transportation services; and Other services.

Currently, barriers are gradually being removed and many sectors have been fully opened up, meaning that when foreign investors invest in Vietnam, they no longer need to meet the specific requirements of those sectors because all barriers have been removed according to the roadmap that Vietnam has committed to. However, some sectors still maintain certain restrictions, based on Vietnam's commitments in trade agreements, the 2020 Investment Law, and its implementing regulations. Some sectors require specific conditions as follows:

• Real estate
• Other business services
• Professional services
• Tourism and related services
• Entertainment, culture, and sports services
• Computer and audiovisual services
• Research and development services
• Information services
• Leasing or rental services with or without operators
• Transportation services
• Construction services
• Health and social services
• Education, training, vocational training, and related services
• Environment
• Agriculture, forestry, and fisheries
• Production and trading of goods
• Retail of goods, e-commerce, etc.

4. Notes on the company headquarters and project location of the proposed company

Depending on the project location, investors will enjoy different incentives related to land tax, as well as investment procedures from the relevant authorities in that location.

For companies operating in the manufacturing and processing sector requiring factory space: A factory lease contract or approval for land use for production is mandatory before proceeding with the procedures for establishing a foreign company in Vietnam.

For companies operating in trade and services: An office lease contract and relevant land and property documents are required. Using apartment buildings as company headquarters is not permitted.
 

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5. Faro Vietnam Firm's services for establishing foreign companies in Vietnam

Consulting and assisting investors in finding and leasing headquarters, factories, and land with competent state authorities in Vietnam;

• Providing advice and support to clients regarding the conditions related to the business sector they wish to invest in.
• Drafting and preparing documents for investors;
• Acting on behalf of investors in dealings with government agencies.
• Receiving the results of client applications.
• Faro Vietnam provides consulting support to clients on activities after company establishment in Vietnam, as well as after the investment registration certificate issuance procedure.
• Advising and supporting investors on procedures related to land, land clearance, factory construction, construction permits, environmental impact assessments, fire safety permits, and other business licenses.
• Providing comprehensive advice on regulations of labor law, tax, finance, foreign exchange transfers, capital contributions, etc.

>>>Read more: Staffing solution - Top recruitment agencies in Vietnam

Faro Vietnam

• Email: service@farovietnam.com.vn

HANOI HEAD OFFICE

• Tel: + 84 24 3974 3091

HO CHI MINH CITY OFFICE

• Tel: + 84 28 3821 4654

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