This service account insists on originality. The author is Zhang Xiaoming, partner of Zhuozhi (Vietnam) Accounting Firm, three years of multinational enterprise management experience, six years of listing audit experience, five years of entrepreneurial experience, Chinese certified public accountant (CPA), international certified public accountant (ACCA) ). WeChat: hy945568

In the past two years, overseas markets have risen, especially in Southeast Asia. This year, Vietnam has been rated as the eighth economically stable body. However, when companies enter overseas to establish a new company, many mistakes may often occur, especially in emerging markets. This article will give you some tips on the seven most common mistakes foreign investors make when registering a company in Vietnam. It aims to provide certain assistance to enterprises that are interested in entering the Vietnamese market, registering companies and setting up factories in Vietnam!

1.Think that every type of business needs a local partner

When it comes to registering a company in Vietnam, the first misunderstanding is that you think you must have a local partner! In fact, this is an outdated and misleading information. In fact, you can establish a 100% foreign company in many industries. For example, manufacturing, trade, consulting, IT, etc. Of course, it does not rule out that there are still some industries that require you to have a local partner, such as the tourism industry.

2. Use unreliable candidates

Another common mistake foreign investors often make when setting up a company in Vietnam is to reach an agreement with an untrustworthy candidate. This may be because you blindly trust your local friends, or you mistakenly believe that you need a local partner in every industry.

3. Put the wrong capital into the company

In Vietnam, the registered capital of a company is more than 10,000 US dollars. Don’t blindly increase the cost of registered capital, which means high tax costs. At the same time, you can’t blindly reduce the cost of investment capital, because if the actual business amount is too different from the registered capital Large and easy to be regulated by the government.

In addition, please note that according to the provisions of the Enterprise Law, the minimum capital specified by you must be paid within 90 days after the issuance of the business license. This is what we call capital verification.

Your minimum capital is not necessarily a financial contribution. Other assets are also acceptable, as long as you have an invoice for the corresponding product.

4. No value-added tax invoices

Please note that not every receipt is a VAT invoice. If you do not request a VAT invoice before or on the day of purchase, many companies refuse to issue a VAT invoice.

It is very important that you request and keep all VAT invoices before and after company registration. These can be recorded as company expenses, which you can claim later.

In addition, the recovery of appropriate value-added tax invoices can reduce corporate income tax rates. If you have not obtained an appropriate VAT invoice, you cannot use the VAT amount as VAT.

In terms of accounting, you can also include non-VAT invoices as expenses. However, the tax bureau does not consider these as expenses, which will increase your corporate income tax rate.

It is also a good idea to reach an agreement with the owner, contractor, etc. in advance so that they can issue VAT invoices after your company is registered.

5. Think that if no one tells you, you don’t need to follow the rules

Another slippery slope that foreign investors can easily produce does not comply with local laws and tax reporting requirements. This is usually caused by ignorance of local regulations and may cause unnecessary fines to the company. To learn more about Vietnam's compliance, you can follow us at Zhuozhi Finance and Taxation, or call for consultation.

6. There is not enough time to set up a company in Vietnam

Like many other developing countries, the registration process in Vietnam takes more time than in developed countries. It may take up to 3 months to establish a legal entity in Vietnam. It includes collecting and submitting founder documents.

Investors underestimated the time required to obtain all supporting documents. The longest stage in the establishment of a company is usually the preparation of the founder documents.

You also need to legalize these documents in the issuing country. After that, you can submit them to the Planning and Investment Department.

7. When we set up a company in Vietnam, outsourcing is a more effective way of entry

When entering the new market of Vietnam, the establishment of a Vietnamese company outsourcing can be a more effective way of entry. A professional outsourcing team organization and one-stop service can more reasonably and accurately avoid certain risks for the enterprise!

When foreign investors register a company and set up a factory in Vietnam, all the above-mentioned mistakes are common. However, you can avoid them through thorough planning and preparation. We will also do our best to help you solve the problem.