Vietnam is a captivating destination for foreign investors looking to start their own business. Since the 1990s, Vietnam has experienced steady growth and has been considered one of the fastest-growing economies among ASEAN member states. Even during the global economic downturn, Vietnam had its way to make a speedy recovery and continues to thrive and offer substantial opportunities for foreign investors when it comes to doing business in Vietnam.
With Vietnam’s economy prospering at an impressive rate, maneuvering its unique and traditional business culture is critical. Disappointing investments caused by business blunders and frustration are not uncommon when doing business in Vietnam.
Potential investors hoping to enter this burgeoning market have read this article as it provides you with guidance on how to do business in Vietnam the right way.
Ensure Sufficient Money
This one is obvious, but some business people tend to overlook this crucial factor.
Although there are no minimum capital requirements for most industries in Vietnam, the Vietnamese government wants you to show that you have enough money for your business expenses. The amount depends on the type of your business sector and you need to show proof through your bank statement.
Similar to share capital or paid-up capital, this amount is known as Charter Capital and you are given 90 days to put this amount into your company upon the receipt of Enterprise Registration Certificate (ERC).
In general, a US$10,000 investment is considered the minimum Charter Capital a foreigner must have, and accepted by the government of Vietnam, to start a business in the country.
Doing Business in Vietnam with E-Invoices
The Decree 119 states that effective from November 1, 2018, the Vietnamese government has enforced e-invoicing (or e-invoices) for the sales activities of goods and services.
This implementation aims to streamline and simplify the invoicing process by converting the traditional paper invoice into paperless invoicing, thus bringing in more foreign investments with easy transactions among stakeholders.
It is compulsory for all individuals and companies to adopt the system under the new law. However, there is a transition period that allows individuals and companies to use their existing purchased, self-printed or pre-printed invoices until October 31, 2020.
Thus, it is critical for businesses and individuals to adopt the system as soon as possible before the said enforcement date. Cekindo can help you set up the e-invoicing system in order for you to be in compliance with the Vietnamese Law.
Read in more details: How to Comply with Mandatory E-Invoices in Vietnam
You Should Understand the Vietnamese Business Culture
As foreigners, getting prepared and familiarising yourself with the business culture in Vietnam will actually do you a lot of good. How well you understand the Vietnamese business culture can impact your business remarkably.
Building relationships and maintaining harmony in every social situation are critical when doing business in Vietnam. This attribute is deep-rooted in Vietnamese culture and thereby, a business relationship with sincerity and mutual respect is highly appreciated.
If you practice these virtues, you will be able to make smarter decisions, create a better work environment, and improve your products and services that are accustomed to the local market.
Doing Business in Vietnam with Incentives and Taxes
If you have no idea how the taxes and incentives are working in Vietnam, you are actually setting yourself up for failure while doing business in Vietnam.
For example, it is not unusual that many foreign investors will confuse receipts with VAT invoices. Companies in Vietnam do issue VAT invoices and most of the time you need to ask for them, otherwise you will just receive the receipts. VAT invoices are pretty useful when it comes to company expenses that you can use for claims in the future.
In addition to that, VAT invoices enable companies to reduce corporate income tax rate. So, do keep and maintain your VAT invoices well and do not forget to ask them from your suppliers.
The most important of all, keeping yourself informed of the latest tax laws and regulations in Vietnam will keep you out of trouble for non-compliances.
Business Setup in Vietnam with Cekindo
Get in touch with us for further information on business setup, incentives and taxes and other things related to doing business in Vietnam. Fill in the form below.