Expand Business in Vietnam
Global Upside helps businesses expand into Vietnam by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Vietnamese laws and regulations.
The hiring and incorporation processes in Vietnam are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Vietnam. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
One of the most dynamic emerging nations in the East Asia region, Vietnam has a market economy and is a lower middle-income country. Over the past 3 decades, Vietnam has seen a spurred economic growth with a constant increase in the GDP per capita.
- Vietnam’s economic model is dependent on exports and foreign investment.
- The major exports are transmission and electronic apparatus, automatic data processing machines, electronic integrated circuits, and technology products.
- Vietnam imports petroleum oils, electronic integrated circuits, transmission, and electronic apparatus.
There are 5 types of legal entity setups in Vietnam, however, the JSC, 2M-LLC, and IM-LLC have their own legal status. The IM-LLC is the most popular and commonly used form by foreign stockholders when they plan to set up a legal establishment in Vietnam. The other 2 kinds of establishments i.e., Partnership and Private Enterprise are more appropriate for local stockholders.
Multi-member limited liability company (2M-LLC) needs a minimum of 2 and a maximum number of 50 investors or legal entities. The investors do not have any personal liabilities and the Members of Council (MC) takes a decision on the prime affairs and also have the management responsibilities.
Single-limited liability company (IM-LLC) needs only 1 investor who can either be an individual or a legal entity. The investor does not have any personal liabilities and either the MC or the company’s president has the overall management responsibility, whilst the General Director or the CEO has day-to-day administration responsibility.
Partnership is the kind of establishment that needs a minimum of 2 unlimited liability partners who are individuals and there are no constraints to the number of limited liability partners. That said, there are no personal liabilities of the limited partners but the unlimited partners have to be liable for all forms of obligations. The unlimited partners have day-to-day administration responsibilities, whilst the Partners’ Council has overall management responsibilities.
Private Enterprise needs a single individual owner who will have to bear the personal liabilities. The proprietor will administer all day-to-day and overall management responsibilities and also contribute funding to the venture capital of the private enterprise.
It takes a minimum of 4 to 6 weeks to incorporate a legal establishment in Vietnam.
An employment contract must be in writing with a copy for the employer and the employee. The contract may be made orally only if the job is temporary—with a term of three months or less—or if the employee is hired as a domestic servant.
The employment contract must include:
- Job description
- Working and rest hours
- Job location
- Contract duration
- Workplace hygiene and safety
- Social insurance terms
A contract may be valid for an indefinite term, for one to three years, or for a seasonal job or a specific job to be carried out in less than one year. (Note: Effective Jan. 1,2021, there will be only two types of labor contracts: definite term contracts up to 36 months in length and indefinite-term contracts.)
Employers must conduct a self-review of their compliance with employment law at least once a year.
Employees are entitled to the following 10 public holidays with full pay:
- Jan. 1: New Year’s Day
- Lunar New Year Festival (5 days)
- Mar. 10: Hung Kings Commemoration Day
- Apr. 30: Victory Day
- May 1: International Labor Day
- Sept. 2: National Day
Foreign citizens working in Vietnam are entitled to one day of their country’s National Day (if any) and one traditional public holiday in addition to the ten public holidays stipulated by law.
The International Financial Reporting Standards (IFRS) are universal bookkeeping standards published and governed by the International Accounting Standard Board (IASB) to educate the groundwork and introduction of monetary reports. Vietnam uses IFRS as a reason for its own system, the Vietnamese Accounting Standards (VAS), yet there are key contrasts between the two.
The corporate tax rate in Vietnam is 20%.
Value Added Tax (VAT)
The VAT rate here is 10%. However, the reduced rate is 5% on an array of exempt services and products, a few food items, and imports.
In the Constitution 2013 and Civil Code 2015, the right of privacy and right of dignity, honor, reputation, and some fundamental laws of such rights are provided. These rights are protected and inviolable by law. The law states that any individual who wants to collect, store, use or publish anyone’s personal data has to seek prior consent.
Anti-Bribery & Anti-Corruption Law
In Vietnam, the Anti-Corruption Law1 and the Penal Code governs all anti-corruption or anti-bribery acts.
1. Bribery of public officials:
i) Imprisonment for a minimum of 6 months up to 20 years.
ii) Confiscation of the property or fund that has been offered as a bribe.
2. Bribery of private officials:
i) Imprisonment for a minimum of 6 months up to 20 years.
ii) A monetary fine of VND 50 million to VND 100 million.
iii) Accused will be subject to criminal liability.