Question: We are from Taiwan and intend to setup a tea factory in Moc Chau - Son La or Thai Nguyen of Vietnam, please advise the legal procedure?
Answer: In order to setup a tea factory in Vietnam, the very first thing you have to do is to look for a suitable land lot for setting up the factory. For this purpose, you shall have following options:
+ Leasing a land lot in an existed Industrial Park for constructing factoring. This option shall be easy as land lot in Industrial Park are designed for calling investor to setup factory, conducting manufacturing activities. You can lease the land lot for 50 years (renewable).
+ Leasing an existed Factory outside Industrial Park from Vietnamese Citizens or Vietnamese Companies. This option shall be cheaper than the above option. However, please note that not all Vietnamese Citizens/Companies are allowed to lease their own factory and not all factory are allowed for lease. For this, we shall need to carefully check the legality of the related company and factory to confirm whether it is allowed for lease or not.
+ Leasing a land lot from Competent Authority. You should consider to adopt this option if you consider to leasing about 20 hectare upward since it cost you much money and time.
After finding a suitable land lot, you shall prepare necessary documents for setting up the Company. Some documents must be prepared and legalized in Taiwan.
For legalization of documents in Taiwan, you must have your document notarized by Notary Public Office in Taiwan and certified by Ministry of Foreign Affair of Taiwan. Then, the documents shall be legalized by Vietnam Embassy.
Upon receipt of your required documents and information, we shall prepare application dossier for setting up company in Vietnam.
You shall sign and chop the application dossier in accordance with our guidance. Then, we shall submit the application dossier to the competent authority, following with the licensing process on your behalf until you obtain the required Investment Registration Certificate and Enterprise Registration Certificate. It shall take you about 25 working days from submission of application dossier to the competent authority to complete the licensing process.
After setting up the company, your company shall conclude Land Lot/Factory Leasing Contract. Depend on the specific option that you adopt, your company can be entitled to Certificate of Land Use Right (similar to Land Ownership Certificate in some other countries) and constructing the Factory.
Company in Vietnam shall be subject to following tax:
- Corporate Income Tax: 20% of your profit. Your profit shall be accounted as follows:
Profit = Turn over - Legal Expense of the Company.
- Value Added Tax: From 0-10%. Your payable VAT shall be accounted as follows:
Payable VAT = Output VAT (The amount of VAT you collect from your customers on behalf of Tax Authority when they purchase goods from you) - Input VAT (The amount of VAT you paid through your suppliers, sellers when you purchase raw material, equipment and other services for supporting your business activities in Vietnam).
In case you export 100% your products, you can be entitled to VAT's reimbursement from the Tax Authority if your payable VAT is minus.
- Personal Income Tax: You shall have to pay Personal Income Tax on behalf of your employees in Vietnam.
