This post is about the actual experience which James and me had when setting up 100% foreign-owned company in Vietnam.
I) Selecting law service:
Starting early of Aug 2016, James and me contacted various law services to inquiry about setting up 100% foreign-owned company. They are:
+ Nam Long law: offer James a service fee of 300USD/month for their regular legal service to protect James' money as well as for his personal issue.
+ Domicile offered to help James to build a company about management consulting, and instruct James about legal papers for the contract with the farmers. Payment: Domicile fees of 1,600 USD; legal fee of 5,500 USD. Total 7,100 USD.
+ DIMAC law: offer 3,500 USD.
+ Hong Duc law: offer 1,800 USD.
+ Grunkorn and partner: didn't offer a price but advised us to establish a 100% Vietnamese owned company instead.
James selected to work with Domicile since their solution convinced James the most.
II) Working with law firm to set up the company:
James met Domicile (Matthew Lourey and Xuan Nguyen) with me on Aug 29, 2016 to finalize the process.
Here are documents James need to provide to establish the company:
+ scanned copy of passport, scanned copy of driver license, (5) notarized copies of passport.
+ Letter from a bank outside of Vietnam confirming that James has greater than $20,000. (James will have to bring $20,000 into the company within 90 days from license being issued, and it must come from his own bank account outside of Vietnam – but not necessarily from the exact account/bank in this letter)
+ Preferred name of the new company (check if duplicate or not)
+ Rental contract in Vietnam for an office.
About the office: James need to pay for an office in at least 6 months with direct rental contract with land owner to be registered as company address. This address is just to satisfy requirement of tax office. James selected service of Replus office. It's necessary to have original lease contract, since James wasn't in Ho Chi Minh city, so Domicile sent the contract electronically, James wet-signed it and fedexed it back to Domicile. The document arrived on Sep 29.
III) Other legal works after company establishment:
James's company with the name: Elkbridge Consultant Limited Company was legally established on Nov 2, 2016. Business registration number is same with tax code.
Nov 10, 2016, we met Mr. Toan at Indochine counsel office. He handled James originals of Investment Registration Certificate, Enterprise Registration Certificate, seal register, seal and original application dossiers of the company set up.
Then James and me worked together on:
+ notarize passport, seal registration, ERC, IRC. We notarized these at the notarization office near James's place: Nguyen Canh notarization office no. 4 Tran Quang Dieu street, District 3.
+ Register at tax office, obtain tax invoice, obtain tax token, pay business license tax.
+ Register me as Chief Accountant.
+ Register company's bank account (with Vietnam International Bank).
Domicile provided us forms to fill up. I filled up those forms by myself, we printed them, James signed and sealed, and I brought them to local government offices to submit. For the company's bank account, we need to go together.
Here is list of documents we submitted:
* To VIB (111A Pasteur): notarized copies of business license, seal certificate, passport of James, ID of Chief Accountant (me), Chief Accountant appointment letter, bank account application for company, company's internet banking application, request for opening foreign currency account for direct investment capital. And a contract for internet banking service between James's company and VIB.
Beside, James also need to filled up the W-8BEN-E form as an US citizen.
* To tax office: copy of ERC, Registration for Fixed Asset depreciation method, accounting method, VAT method.
Domicile advised us to submit Director appointment letter and Chief Accountant letter but tax office told me that those documents aren't necessary. Domicile also tolf us to have authorization letter which James authorize me to help him to process the legal documents but no one asked me about that document or didn't have a look at it.
About tax matters, we are under Ho Chi Minh city tax bureau at no. 63, Vu Tong Phan street, An Phu ward, District 2, HCMC.
* To Department of Planning and Investment (no. 32, Le Thanh Ton street, Ben Nghe ward, District 1, HCMC):
Information changing notice (update about bank account number and name and phone number of Chief Accountant), photocopies of ID of Chief Accountant/person submit documents.
* To Labor Department of District 1 (under and same office of People Committee of District 1: no. 47-49, Le Duan street, D1):
Copy of IRC, ERC, Initial report on employment, Minute of meeting about salary scale, Decision about salary scale, Initial salary scale registration, Requirements for each position on the salary scale registration, Report on employment for last 6 months of the year.
When submitting documents, we need to submit at least 2 copies, the authority office will keep one copy, they seal one copy by rectangular seal and give us to bring home.
* To Trade Union of District 1 (no. 37, Han Thuyen street, D1):
The Initial report on employment sealed by Labor Department of District 1;
and a letter of non-establishment of trade union (with the reason of the company now has only one member - the director - not enough to establish trade union).
IV) Paying taxes matter:
In Vietnam, by law, nowadays, all taxes must be paid online.
You first must declare taxes via
http://nhantokhai.gdt.gov.vn/ihtkk_nnt/home_public.jsp Then pay taxes via
https://nopthue.gdt.gov.vn/epay_nnt/home.jsp To pay taxes, we must purchase a usb token which contain digital signature.
There are 9 companies in Vietnam were authorized by Ministry of Information and Communication to provide usb token & digital signature service: VinaCA, Viettel-CA, Bkav-CA, VNPT-CA, FPT-CA, NEWTEL-CA, CA2, CK-CA, SAFE-CA.
I read about them online, Viettel, VNPT, FPT, Bkav seem are most reliable. I contact them and FPT was the most responsive.
About this kind of service, the token, digital signature and prices aren't very different. The importance is after-sale service, when Client need help, which one would be most helpful and responsive.
Note about usb token and digital signature in Vietnam that they only can run on Internet Explorer web browser, which mean if you use a Macbook, you should have Windows on Macbook installed to install Internet Explorer.
Beside this also requires java, and normally the token service provider will suggest you to install teamview or have it installed for you to support you remotely.
We chose FPT and FPT personnel came to install for us on the afternoon of Nov 18.
For now we only have to pay registration tax annually. On 2016, our company was on level 4 of tax level, and we had to pay 1 million VND for full year. Due to we established the company at the end of the year, we only had to pay half of amount, means 500,000 VND.
On 2017, the company has to pay double, mean 2 million VND for registration tax.
Please note that your bank service fee is around 11,000 VND, plus minimum balance of 1,000,000 VND, so you need to make sure that your VND bank account should have excess of total amount.
