Doing Business in Vietnam: Different Business Structures and Policies

With the presence of numerous international firms and franchises, sourcing from Vietnam is quite a feasible option.

Primarily, three different business structures exist in Vietnam:

  1. A 100 percent foreign-owned sole proprietorship or partnership
  2. A joint venture enterprise
  3. A business cooperative that is owned and controlled by the people who use its services

Over the years, the country’s pro-business policies, cheap labor and conducive infrastructure has drawn in many top companies. Besides an increasing number of manufacturers shifting their production bases here, importing goods from Vietnam has also been on the rise. Maximum foreign investments have been witnessed in the following sectors:

  • The production of items for export
  • Animal husbandry, farming and the processing of agricultural, forest and aquaculture products
  • The utilization of high technology and modern manufacturing techniques
  • The protection of ecological environments
  • Research and development
  • Labour intensive activities
  • The processing of raw materials
  • The efficient utilization of natural resources
  • Construction of infrastructure facilities and important industrial production establishments
  • Investment in mountainous and remote regions
  • Investment in regions with difficult economic and social conditions

Entrepreneurs wanting to establish a new business in Vietnam are required to produce several specific legal documents. These include a valid personal identity card or passport, as well as papers proving financial solvency. As far as just importing from Vietnam is concerned, the criteria is lesser stringent.

A foreign enterprise wanting to set up an office or factory in Vietnam must provide the following documents:

  • A certificate of incorporation
  • A company charter or articles of association
  • Audited financial statements for the past 12 months
  • Valid personal identity cards or passports of any of the business’ authorized representatives

Although money can be moved into Vietnam, it must be deposited into either a Vietnamese-based foreign currency bank account or be converted into Vietnamese dong. There are significant restrictions governing the movement of money out of the country. Money may only be transferred out of Vietnam if it falls into one of these categories:

  • Payment for imported goods and services
  • Payment by foreign investors of
  • Invested and reinvested capital earnings and profits from undertakings in Vietnam
  • The principal and interest on off-shore loans and credits
  • Other legal benefits
  • Payment for travel allowances to employees travelling abroad
  • Payment of salaries to the executives of foreign capital enterprises
  • Payment of salaries to Vietnamese employees working in a foreign country
  • Payment of salaries and other legal income to foreign employees