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 laws and regulations in Vietnam.

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.

Capital City

Hanoi

Currency

Vietnamese Dong (₫)

Language

Vietnamese

Government

Socialist Republic of Vietnam

Country Overview

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 ranks as one of the top manufacturers and exporters of electrical equipment, footwear, etc.
  • Vietnam ranks as one of the top 5 economies in Southeast Asia.
  • Vietnam ranks as the 19th business-friendly nation in the world.
  • Vietnam is known as a prime location for investors who operate in the textile industry.
  • Vietnam is one of the biggest exporters of smartphones and computer accessories.

Legal Entity Setup

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.

Joint Stock Company (JSC)

Joint Stock Company (JSC) is the form of an establishment which requires a minimum of 3 shareholders and there are no personal liabilities of the investors.

Multi-Member Limited Liability Company (2M-LLC)

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)

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

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

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.

Human Resources

The National Assembly of Vietnam implemented the Labor Code No. 45/2019/QH14, also known as the New Labor Code, on 20 November 2019. This came after a revision procedure that lasted for around four years. The New Labor Code will take effect from 1 January 2021. According to the labor law, labor e-contracts are also valid as they are in compliance with the e-transaction laws. Employment agreements need to have below mentioned details:

  • Term of the work permit
  • Remuneration
  • Working and rest hours
  • Leaves and Benefits
  • Labor Disciplinary Procedures
  • Termination and notice periods
  • Retirement Ages
  • Employee Representative Organizations

Payroll

The payroll period in Vietnam is semi-monthly or monthly and it is customary to pay a 13th-month salary at Tet holiday or at the year-end.

Accounting

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.

Tax & Compliance

Corporate Tax

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, few food items and imports.

Data Privacy

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:

For individuals:

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:

For individuals:

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.