04 LEGAL GUIDES TO DOING BUSINESS IN VIETNAM
Vietnam has become the fast-economic growth in Asian countries (GDP growth 6% to 7% from 2016 to 2018). Doing business in Vietnam is a good option for foreign investors now. Foreign investors should note 04 legal guides to doing business in Vietnam as follows.
Why do we need to invest in Vietnam now?
Vietnam, country with a stable political system, is one of the countries with the fastest growing economy. By this time, Vietnam has signed free trademark agreement with different countries and developed markets. Vietnam is one of the most participating countries in FTAs in the world, with 17 FTAs.
Moreover, Vietnam is on the way becoming the manufacturing centre for international companies due to their advantage of cheap labour costs and infrastructure development. Vietnam could be a good place to shift from China.
What fields are investors able to lawfully invest in Vietnam?
Foreign Direct Investment (FDI) is very important to Vietnam now in terms of strengthening economy’s growth. They account for nearly 70% of the country’s export turnover.
Recognizing the aforementioned role of the FDI to Vietnamese economic system, Vietnamese Government has amended the relevant laws on foreign investment to encourage foreign investors to invest into Vietnam. Now 100% Permitted foreign ownership for most sectors is allowed according to Decree 60/2015. The Vietnamese Government commits to support and create the most favorable conditions for foreign businesses investing and operating in Vietnam.
Who are our key FDI investors?
According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, Japan has returned as the top investor in Vietnam with total amount of investments of $6.47 billion in the first half of 2018, equivalent to 31.8 percent of the total FDI reported for the period. In second and third place are South Korea ($5.06 billion, 24.9 percent of the total) and Singapore ($2.39 billion, 11.8 percent of the total), respectively. The other top investors include China, Taiwan, Hong Kong, Malaysia, USA
What Forms of business could foreign investors do business in Vietnam?
Foreign investors could consider following of the form as defined hereafter when doing business in Vietnam:
– Joint-stock company
A joint-stock company is formed by shareholders based on their subscription for shares in the company. A joint-stock company must have at least three shareholders. The company may either be 100% foreign-owned; or a joint venture between both foreign investors and domestic ones.
This form of foreign investment in Vietnam may be setup between a legal entity or an individual and the individual general partner. The partner has unrestricted liability for the operations of the partnership.
– Limited-liability company
+ A 100% foreign-owned enterprise; or
+ A foreign-invested joint-venture company between foreign investors and at least one domestic one.
– Build-operate-transfer (’BOT’), Build-transfer (’BT’) and Build-transfer-operate (’BTO’) Contracts
– Forming Business cooperation contract (BCC)
– Public and Private Partnership Contract (PPP)
Currently, BOT, BT and BTO is quite popular in Vietnam while PPP is not so common.
What services ASL LAW could do for clients/foreign investors doing business in Vietnam?
ASL LAW with very experienced business lawyers and consultants shall provide the clients a full legal service with affordable quotation to company formation in Vietnam from the initial step until full functional operation. Accordingly, the business of the clients shall operate in Vietnam legally, efficiently and costly.