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Request support to establish Subsidiary in Vietnam

Nội dung bài viết

Question: I’m Hong kong company, we have plan to make a new Subsidiary (or a Representative Office) in Viet Nam. Please support and advise us.

What kind of tax and how much tax we must to pay (setup new company, annually, pay for employee…or other)

What is the tax incentive we will get when we set up new factory in Hai Phong (2 case: in An Duong industrial and out site – not in industrial).

Answer: I am lawyer from SB Law., We would like to give you our legal advice on your request as follows:

1. As per information provided to you, we understand that your company  would like to carry out activities of import, export and distribution of goods  in Vietnam. For this purpose you are required to set up an foreign invested company not a representative office.

Because the representative office does not have a business function but only liaison and trade promotion for the parent company in accordance with Vietnam Law.

In order to setting up foreign invested company you have to undergo the following steps:

Step 1: Obtain Investment Registration Certificate (“IRC”);

Step 2: Obtain Enterprise Registration Certificate (“ERC”).

In addition, the distribution of goods activities (including wholesale, retail without establishment of retail outlets) are classified to conditional business lines for foreign investors.

After obtaining IRC and ERC you are also required to obtain a Trading License for carrying out this activity.

2. Under Vietnam Law, you shall have to pay following tax:
1. Business license tax: 50USD-145USD/per year.
2. Corporate Income Tax: 20% of profit.
3. Value Added Tax: 0-10%
4. Personal Income Tax (employee): Progress tax rate from 10-35%.
For employee, you shall have to pay:
1. Social Insurance: 17.5% paid by employer; 8% paid by employee.
2. Health Insurance: 3% paid by employer; 1.5% paid by employee;
3. Unemployment Insurance: 1% paid by employer; 1% paid by employee;
If you open company in An Duong Industry, An Duong District, Hai Phong City, you shall enjoy 02 years of Corporate Income Tax Exemption and deduction of 50% of Corporate Income Tax within next 04 years.
If you open the company in An Duong District, Hai Phong City (outside of Industrial Parks in An Duong District, Hai Phong City), no tax incentive is granted to you. Please see more:

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