Business Expansion to Vietnam: Key Steps to be Aware of

Posted 19.11. 2019 by Cekindo

Vietnam’s economic growth has been remarkable over the past several years. Not only has it been adorned as one of the Asia’s fastest emerging markets, but when it comes to starting a business in Vietnam, it also has become one of the global places for foreigners to invest and expand their businesses. As of 2019, the foreign direct investment in Vietnam was recorded at approximately US$35 billion, 9% higher as compared to 2018.

As a rising middle-income country, Vietnam’s economy is rising at a rate of 7.2% every year and the poverty percentage has dropped significantly from more than 70% to less than 6%. In other words, more than 45 million people have got out from the poverty category due to this economic transformation.

Apart from that, the reasons many investors have chosen Vietnam as their base to set up a company is that Vietnam is improving greatly on their infrastructure and is currently going through outstanding industrial production development. The average industrial production for the past 10 years was recorded at 12% annually, contributing to 6.5% of Vietnam’s total GDP growth.

If you are thinking of starting a business in Vietnam, spend some time and read this article so that you can take more informed steps.

Starting A Business in Vietnam: How to

Setting up a business in Vietnam is not all simple for foreigners as compared to other neighbouring countries. Local laws and red tape in Vietnam make it more challenging for international investors to start their operations here. You should always seek professional advice from local business consultancy to get a head start.

starting a business in vietnam

Choose Your Legal Entity

To incorporate a company in Vietnam, a foreigner must choose a legal entity or business structure that is appropriate for your business operation. Typically, there are three legal entities suitable for investors:

  • Fully foreign-owned company
  • Joint venture company
  • Business cooperative-owned company

Encouraged Sectors in Vietnam for Foreign Investors

In accordance with Vietnam Law, there are only specific sectors allowed only for foreign investments in Vietnam, some of them are as follows:

  • Research and development
  • Goods manufactured and produced for exports
  • Raw material processing
  • Sectors applying modern and technological manufacturing methods
  • Sectors with efficient utilisation of natural resources
  • Establishment constructions (infrastructure facilities and industrial productions)

Restricted Sectors in Vietnam for Foreigners

The government of Vietnam prohibits foreign investments in sectors that pose negative effects to the country and its people. The restricted sectors are related to the following:

  • Cultural and historical preservation
  • Natural environment
  • National defense and security
  • Customs and traditions

Required Documents to Start a Business in Vietnam

The following documents are mandatory for foreigners to establish their companies in Vietnam:

  • Valid passport or identification
  • Certificate of registered company
  • Articles of association
  • Previous audited financial statements

Currency Restrictions for Foreign Investments

Foreigners can transfer their money into Vietnam for the following payments:

  • Import payments
  • Investment earning payments
  • Interest or principal payments on loans or offshore credits

When you transfer money into Vietnam, you must deposit it in a Vietnamese bank account in the form of Vietnamese dong or foreign currency. All transfers performed must be in compliance to Vietnamese Law.

How Cekindo can Assist You in Starting a Business in Vietnam

Cekindo’s business expansion specialists provide strategic advice to help you develop your business in Vietnam with our immense experience, know-how, comprehensive networks and the latest up-to-date market data and information.

Our experts use their extensive country-specific knowledge of Vietnam to tailor solutions that suit your expansion requirements to help your business operate effectively and profitably in the new marketplace. Work together with Cekindo and realise your global vision now by starting a business in Vietnam.