Welcome to Vietnam and explore the possibilities!
Vietnam offers a strong opportunity for investment, supported by rapid economic growth, political and policy stability, and an improving legal framework. Vietnam's GDP growth shows the positive sign of development and improvement in various sectors.
Socialist Republic of Vietnam
- Population: Approximately 9.45 million
- Gross Domestic Production (GDP): USD 186 billion (2014)
- Per Capita Income: USD 1,890
- Currency: Dong (Exchange rate: USD 1 = 227 VND)
Principal Foreign Commercial Investors : Taiwan, China, Korea, Malaysia, Japan, U.K., Singapore.
- Foreign Relations: Vietnam is a member of the United Nations, the ASEAN, the APEC, and joined the World Trade Organization (WTO) on 2007.
There are four different types of investment as follows:
- 100% foreign-owned entity: The minimum shareholder is one, but no more than 50. Foreign-owned entity can export and conduct domestic sales.
- Joint Venture entity: With majority foreign-owned capital (51%), it requires at least 2 shareholders. The foreign investor could hold up to 99% shares.
- Contractual Arrangement: This form of investment does not set up a new legal entity. The investors in Business Cooperation Contract (BCC) share the revenues and/or products arising from a BCC. It is a cooperation agreement between foreign investors and at least one Vietnamese partner in order to carry out specific business activities.
- Representative Office: It is not a separate legal entity under laws of Vietnam. The activities of a Representative Office are limited to business promotion, identification and accelerating the trade opportunities, and supervising the implementation of contracts signed between its parent/representative company and local partners.
Under the Vietnam Law on Taxation, most foreign investments and foreign investors will be affected by the following taxes:
- Corporate Income Tax (CIT)
- Value Added Tax (VAT)
- Withholding Tax (FCWT)
- Capital Assignment Gains Tax
- Personal Income Tax (PIT)
- Import Duties
Further, the Vietnam's Investment Law offers the following incentives:
- Tax holidays (complete exemption) of up to 4 years and 50% tax reduction on the tax rate / preferential tax rate for up to 9 years thereafter.
- Preferential tax rate of 10% and 20% for 15 and 10 years respectively for encouraged investment projects or in socio-economically disadvantaged locations.
- From 1 January 2016, enterprises having projects entitled to the preferential CIT rate of 20% will enjoy a rate of 17% instead.