- 1. Opening a Company Bank Account
- 2. Registering for Tax and Paying for Annual Business License Tax
- 3. Registering for E-invoices
- 4. Inject investment capital
- 5. Install a company sign at the business location
- 7. Licenses for specific industries
- 8. Applying for Work Permit and Residence Card
- Cekindo Takes Care of Everything
Once you have completed incorporating a company in Vietnam, the Vietnamese government expects you to go through certain necessary processes. Your company must also comply with Vietnamese laws throughout business operations. Here is a guide to ensure your continued success in your venture into South East Asia’s top emerging economy.
Let’s start with some of the basic steps you need to follow immediately after your company’s incorporation in Vietnam.
1. Opening a Company Bank Account
Opening a bank account in Vietnam is an absolutely necessary step after your company’s incorporation in Vietnam. It’s a requirement for paying most corporate taxes. Currently, up to 90% of Tax Departments require businesses to pay taxes through electronic tax payment to minimize the overload of administrative procedures.
Having a local bank account also means that you can save on expensive bank fees and simplify bank transactions.
In Vietnam, there are two types of bank accounts available to foreigners or foreign companies: personal bank accounts for individuals and business bank accounts for companies in Vietnam. A business account can further be categorized into an investment capital account and a transaction account.
Contact us for more information regarding the specific requirements for opening and operating each type of bank account.
2. Registering for Tax and Paying for Annual Business License Tax
After opening your bank account, the next step is usually submitting tax registration (also known as initial tax declaration) and paying your annual business license tax. However, as stated in our tax deadlines guide, companies incorporated in 2022 or later are exempt from this tax for their first year of business.
The tax registration process must be completed within 10 days of receiving your company’s Enterprise Registration Certificate (ERC). You’ll have to submit your dossier to the local tax authority, including the chosen method for the depreciation of fixed assets and your company’s accounting methods. Make two copies: one copy of the dossier will be kept by authorities as records and one will be stamped and given back to the company.
Having registered your company’s taxes, you’ll have to submit monthly, quarterly, bi-annual, and annual corporate tax reports (refer to our complete list of tax deadlines). No matter if your company conducts any business activities or develops any tax liabilities, the submission of the reports must be carried out on time.
A majority of foreign businesses in Vietnam find tax functions to be burdensome and resource-intensive for in-house teams, particularly during tax season. New businesses often do not have access to competent employees or any compliance experience. Consequently, these companies may struggle with keeping track of tax compliance and face severe penalties.
One solution for overcoming the challenges of tax compliance is to partner with reputable professionals. A corporate compliance outsourcing provider can handle all your tax functions and keep you updated on all Vietnamese laws and regulations.
3. Registering for E-invoices
Once you have done your tax registration and annual business license tax payment, you need to register for e-invoices. There are two types of e-invoices: e-invoices with tax verification codes that are eligible for tax declarations and e-invoices without tax verification codes.
Under Decree 123/2020/ND-CP (effective from 1 July 2022), the Vietnamese government mandates all companies to make use of e-invoices for the sale of goods and services.
4. Inject investment capital
For capital contribution to establish a company, the time limit for full capital contribution is 90 days from the date of issuance of the ERC (Enterprise Registration Certificate). The investor(s) can also request the investment management authority for a later deadline according to the progress of the registered project.
If the investor(s) fails to meet the charter capital proposal as stated in the IRC (Investment Registration Certificate) and ERC by the deadline, they must make changes to the capital amount within those documents. The amount on the IRC and ERC has to reflect the amount of capital present in the company bank account as of the contribution deadline.
In extreme cases where the company bank account has no capital whatsoever by the 90-day deadline, the investor(s) must apply for a deadline extension, otherwise, the entity is forced to be dissolved.
5. Install a company sign at the business location
The law does not stipulate the time limit for affixing the company’s signboard at the head office. However, there are penalties if there is no signboard upon inspection, ranging from VND 30 to 50 million. This fine is applicable to an entity’s head office, branch, or representative office.
Additionally, there are several things to include in the content of your company’s sign: the official name specified in the ERC, the company address and phone number (and the parent company, if applicable).
7. Licenses for specific industries
Depending on the specific sector that your company operates in, there will be additional licenses to be obtained in order to start operations. Some examples of these licenses are listed below.
- Food & beverage: Food safety certification, and a license for retailing alcohol and alcoholic beverages
- Law: Law practice certificate and a lawyer’s card with the founder/business owner’s name.
- Accounting: Certificate of registration accounting services
Should businesses conduct any trading in goods and services without the relevant business licenses, fines between VND 20 and 30 million will be imposed. For more restricted business lines, such as alcohol and tobacco products, businesses suffer from twice the penalties.
8. Applying for Work Permit and Residence Card
As a universal fact, if you want to work and/or stay in a foreign country in the long term, you need a work permit and a residence visa.
If you’re coming to Vietnam as a foreign employee, you must apply for a Vietnam work permit. A Vietnam work permit is valid for a maximum period of no more than two years and you can apply for a renewal for as long as necessary. However, a work permit doesn’t allow you to stay in Vietnam for any extended period, and you’ll still be limited to the limit on your visa. Therefore, you have to apply for a Temporary Residence Card (TRC), which is valid for two years maximum as well.
Cekindo Takes Care of Everything
Cekindo is a firm of company incorporation in Vietnam with professionals specializing in company registration, nominee arrangement, license, and permit application, visa application, tax, and accounting outsourcing, recruitment outsourcing, and many more.
Our single–point, integrated service to clients covers all business services that you need for running a rewarding business. We help local and foreign companies set up new business operations in Vietnam and those with an existing presence in the country.
Cekindo helps you with everything in your company’s incorporation in Vietnam. With that, you can stay ahead of market changes and legal updates while staying on top of costs.
If you would like to receive a free initial consultation or get in touch with our team, please input your details below.