Remitting profits from Vietnam is essential for foreign investors when they conduct foreign investment transactions in Vietnam. However, this can be a complicated process that will require you to spend a lot of time, money and effort for both new and experienced investors. This is because the constant change of regulations, complex procedure and lack of information make the entire compliance hard to achieve.
Although the remittance of profits from Vietnam may seem daunting to most investors, investors who utilize professional assistance and seek the latest information will more likely be successful. This article will give investors a comprehensive insight for remitting your profits from Vietnam to overseas.
Who is in Charge of the Remittance
A successful business setup and operation means that foreign investors must first be familiar with who are the authorities and regulatory bodies taking charge of the remittance process.
In addition to that, you need to understand the existing and most updated laws and regulations, restrictions, and permission to ensure full compliance. Here are the governmental departments and regulatory bodies and compliance procedures you need to know before setting up your foreign business in Vietnam.
Ministry of Finance of Vietnam (MOF)
The MOF in Vietnam is one of the main governmental bodies you need to know. They have the authority to regulation your profit remittance and adjust taxation for your business in Vietnam. The following details what a MOF can do in regard to profit remittance from Vietnam:
- Regulate a variety of tax rates. They are corporate income tax, value-added tax, special consumption tax, among many
- Modify the remittance conditions that foreigners must comply with in order to transfer their profits from Vietnam to abroad
State Bank of Vietnam (SBV)
All regulations of financial banking and foreign exchange are under the control and supervision of the SBV. As for profit remittance from Vietnam, SBV is authorised by the government to perform the following activities:
- Establish requirements for bank account setups
- Issue license to banks for the purpose of operating foreign exchange accounts
- Release official exchange rates between Vietnamese Dong and other foreign currencies from around the world
Restrictions on Profit Remittance in Vietnam
There are some restrictions that foreign investors must be aware of when remitting their profits in Vietnam, especially restrictions related to the remittance process, even though Vietnam has quite an open policy that allows firms to transfer profits to their markets and countries.
If you cannot work around these restrictions and make it work for your current business models, you may run into troubles such as liquidity issues when you want to compensate your shareholders or pay for service loans.
Time Frame Limitation
In accordance with Law of Vietnam, foreigners can only remit their profits once every year. The audit requirements limit the remittance time frame, allowing foreigners to remit their profits only from March within a year.
Company’s Financial Position Limitation
Vietnam Law states that foreign companies are not allowed to give out dividends when the company has not generated any profits during the fiscal year.
Foreign Investment in Vietnam with Assistance from Cekindo
Cekindo is a leading business consulting firm that provides assistance and support to enterprises, both domestic and international, looking to enter the market in Vietnam. Leveraging our specialised knowledge and international network, we can evaluate the potential of your business and provide you with tailored solutions to satisfy your business requirements.
The dynamic business environment in Vietnam has encouraged foreign investments. What about you? Find out how we can assist with your foreign investment in Vietnam. Get in touch by filling in the form below.