With favorable policies for economic development, Vietnam is considered a country with many advantages from natural resources, human resources, location, and support policies from the government. It has become a “golden land” sought by many foreign investors looking for an opportunity on starting a business in Vietnam.
Why should be Vietnam the ideal place to open a new company?
According to the latest statistic of the National Institute For Finance (NIF), Vietnam is received many positive comments about the prospects for recovery and development of Vietnam’s economy.
Mr. Bill Winters, Global General Director of Standard Chartered Bank, assessed that Vietnam is playing an increasingly important role in international trade and global supply chains as well as being a production site, thereby continuing to offer many attractive business opportunities, especially for foreign investors on starting a business in Vietnam.
Therefore, experts of Standard Chartered Bank have forecast that Vietnam is a rising star in the region, with GDP growth of 6.7% in 2022 and 7% in 2023.
In addition, the International Monetary Fund (IMF) and the World Bank (WB) have also continuously raised the forecast of Vietnam’s GDP economic growth in 2022 to 7% and 7.5%, respectively. Moody’s, after 4 years, has upgraded Vietnam’s long-term national credit rating from BA3 to BA2, with a stable outlook.
Speaking at a conference on maintaining macroeconomic stability, controlling inflation, and promoting growth with Prime Minister Pham Minh Chinh on the afternoon of September 12, Mr. Andrew Jeffries, Director of the European Development Bank, Mr. Asia (ADB) in Vietnam has commented that Vietnam has very high self-reliance to ensure a balance for the economy. The success of Vietnam opens up good prospects for the investment and business environment. The above remarks increasingly strengthen confidence and attract foreign investment (FDI) into Vietnam.
According to the latest data from the General Department of Customs, the total import and export turnover of FDI enterprises reached 346.33 billion USD, up 16.2% over the same period in 2021, accounting for 69.3% of the total import and export turnover. export in the first 8 months of the year. In, the total export turnover of goods from the beginning of the year to the end of August of this group of enterprises reached nearly US$185.44 billion, up 18.2% over the same period in 2021, accounting for 73.4% of the total turnover. export of the country.
Currently, Vietnam is the destination of many foreign investors from 94 countries and territories. According to the Ministry of Planning and Investment, accumulated to August 20, 2022, the whole country has more than 35,500 valid projects with a total registered capital of over 430 billion USD. The processing and manufacturing industry took the lead with a total investment of over 10.7 billion USD, accounting for 63.9% of the total registered investment capital.
From the business community, commented on this issue, Mr. Ramachandran AS, General Director of Citibank Vietnam, representative of the American Chamber of Commerce (AMCHAM) said that Vietnam has built a solid reputation. when assessed by foreign investors as having a strategic location, a safe and attractive investment destination thanks to the policy of developing a stable macroeconomic environment, high and sustainable GDP growth, as well as low inflation, and prudent fiscal policy management strategy with the lowest debt-to-GDP ratio in the world.
Sharing the same view, Mr. Alain Cany, President of the European Chamber of Commerce in Vietnam (EuroCham), said that the indicators of Vietnam’s economy are still stable while neighboring countries are facing difficulties. In particular, the very strong commitment of the Prime Minister at COP 26 in 2021 to reduce emissions to zero by 2050 will help Vietnam become a leading country in attracting foreign investment.
With these expectations, foreign businesses have expressed their desire to cooperate and invest in many fields, especially projects related to green growth and sustainable development.
For example, U.S. businesses look forward to collaborating in areas of energy transition including fostering energy transition partnerships, harnessing the full potential of the digital economy, and reforming the economy, and capital markets to promote investment. European and Korean businesses want to cooperate in building green infrastructure, green energy, green production…
What form should choose for setting up a business in Vietnam
Can a foreigner own a business in Vietnam? The answer is Yes.
According to the Investment Law 2014, there are basic investment forms for opening a business in Vietnam as follows:
1. Investment in opening a new company in Vietnam for starting a business in Vietnam
Investors may establish economic organizations in accordance with the provisions of the law. Before starting the company registration process, a foreign investor must have an investment project, carry out the procedures for issuance of an Investment Registration Certificate according to and satisfy the conditions prescribed by law.
2. Investment in the form of capital contribution, share purchase, and capital contribution to economic organizations in Vietnam
Foreign investors may contribute capital to economic organizations in the following forms:
◘ Purchase of shares issued for the first time or additionally issued by a joint-stock company;
◘ Contributing capital to limited liability companies and partnerships;
◘ Contributing capital to other economic organizations other than those specified at Points a and b of this Clause.
Foreign investors purchase shares or capital contributions of economic organizations in the following forms:
◘ Buy shares of a joint stock company from the company or shareholder;
◘ Purchase of capital contributions from members of a limited liability company to become a member of a limited liability company;
◘ Purchase of capital contributions of capital-contributing members in a partnership to become a capital-contributing member of a partnership;
◘ Purchase of capital contributions from members of other economic organizations.
After carrying out the procedures at the Department of Planning and Investment, the information of members/shareholders who are foreign investors will be updated on the National Business Registration Portal.
3. Investment in the form of PPP contract
Investors and project enterprises sign PPP contracts with competent state agencies to implement investment projects to build new or renovate, upgrade, expand, manage and operate structural works. infrastructure or provision of public services.
4. Investment in the form of BCC contract – starting a business in Vietnam
BCC contracts signed between domestic investors comply with the provisions of civil law.
A BCC contract is signed between a domestic investor and a foreign investor or between foreign investors who carry out the procedures for issuance of an Investment Registration Certificate according to the provisions of Article 37 of this Law.
The parties to the BCC contract establish a coordination committee to perform the BCC contract. The functions, tasks, and powers of the coordination board shall be agreed upon by the parties.
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- National Institute For Finance Vietnam: https://mof.gov.vn/webcenter/portal/vclvcstc/pages_r/l/chi-tiet-tin?dDocName=MOFUCM244350&dID=246292
- Investment Law 2014, 2020
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