Vietnam is currently experiencing tremendous development and is ranked one of the fastest-growing economies in Southeast Asia. The number of foreign direct investment companies (FDIs) in Vietnam keeps growing and numerous multinational corporations can be seen everywhere. One of the most attractive sectors in Vietnam that foreigners are interested in is e-commerce.
Therefore, in this article, Cekindo will unfold the details on how you can offer e-commerce service through the establishment of foreign direct investment company in Vietnam.
Procedure of Investment Registration
There is a two-step licensing process under the 2014 Vietnam Investment Law in order to establish an FDI company.
The first step is about the investment conditions and the second step is about the business conditions or baby permit. The following steps must be complied with:
- Apply for an Investment Registration Certification (IRC) for your investment project.
- Apply for an Enterprise Registration Certificate (ERC) of the FDI company and then register the FDI company performing the investment project.
- Once the IRC and ERC are approved and granted, the FDI company must apply for additional business licenses depending on the type of their conditional activities or operations.
Additional Business Licenses for E-Commerce Services
For your FDI company providing e-commerce services, you have to register the marketplace platform or E-Commerce Trading Floor Website, and E-Commerce Mobile Application with the relevant authority in order to commence your e-commerce activities in Vietnam.
Important Requirements for FDI Company Offering E-Commerce Services
Limitation of Foreign Ownership
There is no activity known as “E-commerce Services” covered by Vietnam’s WTO Commitments on Services and other local laws and regulations.
As a result, there is also no regulation governing the limitation of foreign ownership in regards to FDI companies.
Thus, Cekindo recommends the following based on our years of first-hand experience:
- Vietnam’s WTO Commitments on Services does not specify that e-commerce services are not permitted for foreign investment
- Vietnam’s local laws and regulations also does not prohibit foreign investment in e-commerce services
- Both local laws and WTO Commitments do not confirm the percentage of foreign ownership limitation
- FDI company with 100% foreign ownership is allowed in Vietnam
Minimum Investment Capital
There is no minimum investment capital for FDI company for e-commerce services specified under Vietnam Law.
However, based on the purpose and size of the investment project, the investment capital varies and must be consistent with scale. All investment capital can be contributed in the form of fixed-assets, cash or a combination of both.
Requirements for Your FDI Company’s Legal Representative
The legal representative of your FDI company in Vietnam must be a resident of Vietnam. This means that this person must live in Vietnam for a minimum of 183 days each year or has already acquired the Vietnam temporary residence permit.
A foreign legal representative with a temporary residency permit can make a power of attorney so that they don’t have to be physically present in Vietnam.
On top of that, a legal representative who is a resident in Vietnam must report their income and pay taxes to the Vietnamese tax authority every year.
How Cekindo can Assist
There are many reasons foreign investors have come to Vietnam to expand their businesses, including setting up an FDI company for e-commerce service. This is because by having a presence in Vietnam foreign businesses can cater to more potential and existing clients and increase their bottom line.
Cekindo is a fully licensed business consultant in Vietnam for investors seeking business advice and who want to set up their companies in the country.
We always offer you the best advice to make sure that you are aware of all legal requirements for establishing your FDI entity in Vietnam.
Your business possibilities are endless – request a complimentary consultation from Cekindo today through the form below.