Starting and operating a business in Vietnam requires adherence to a set of legal and regulatory requirements. Understanding these compliance requirements is crucial for avoiding legal, tax, and operational issues. This guide provides an overview of the key compliance obligations for companies incorporated in Vietnam.
1. Appointment of a Company Secretary
One of the first compliance steps after incorporating a company in Vietnam is to appoint a qualified Company Secretary. This person must be a local resident, either a Vietnamese citizen or a foreigner with a valid residency permit. The appointment should be made within six months of incorporation.
2. Physical Office Requirements
Your company must have a registered office address in Vietnam. This office should be open during normal business hours and accessible to the public. It’s important to ensure that your office complies with local zoning laws and regulations.
3. Director Requirements
The directors of your company must meet certain criteria set by the Vietnamese government. You need to appoint at least one resident director who is at least 18 years old and has no criminal record or history of bankruptcy. Non-resident directors can also be appointed, provided they meet the necessary qualifications.
4. Appointment of an Auditor
An auditor must be appointed within three months of the company’s incorporation. However, this requirement can be waived if the company meets certain conditions, such as:
- Annual revenue does not exceed VND 50 billion.
- Total assets do not exceed VND 50 billion.
- Employee count does not exceed 100.
5. Value Added Tax (VAT) Registration
If your company’s actual or projected annual revenue exceeds VND 1 billion, you must register for VAT. The current VAT rate in Vietnam is 10%. Your company is responsible for collecting VAT from customers and remitting it to the tax authorities. Compliance with VAT laws requires proper accounting and timely submission of VAT returns.
6. Business Licenses
Obtaining the necessary business licenses is critical before commencing any business operations in Vietnam. The specific licenses required depend on the nature of your business activities. Commonly required licenses include those for retail, manufacturing, and service-based businesses. Consulting with a local business advisor can help identify the specific licenses your company needs.
7. Register of Controllers
You must maintain a Register of Controllers, which includes individuals or entities with significant control over the company. This register should be kept in both digital and paper formats and be accessible in Vietnam.
8. Public Register of Members
Foreign companies incorporated in Vietnam must maintain a public register of their members, detailing the particulars of all shareholders. This register is in addition to the Register of Controllers and should be readily available for inspection.
9. Accounting Records
Maintaining accurate accounting records is mandatory. These records should clearly reflect the company’s financial position and be kept for at least five years. Proper bookkeeping ensures compliance with Vietnamese accounting standards and facilitates smooth auditing processes.
10. Disclosure of Directors’ Interests
Directors must disclose any material personal interests in company affairs. This includes any potential conflicts of interest that might affect their decisions or the company’s operations. Full transparency is required to ensure ethical business practices.
11. Updating Company Particulars
Any changes to the company’s particulars, such as changes in directors, registered address, or capital structure, must be reported to the relevant authorities within the stipulated time frame. Failure to update this information promptly can result in penalties.
12. Unique Entity Number (UEN) on Correspondence
All official correspondence of the company must include the Unique Entity Number (UEN), which serves as the company’s registration number. This ensures proper identification and compliance with regulatory requirements.
13. Annual Returns and Tax Filings
Annual returns must be filed with the Vietnamese business registry, and tax returns must be submitted to the General Department of Taxation. Understanding and adhering to the annual filing requirements is essential for maintaining good standing with the authorities.
Conclusion
Navigating the compliance landscape in Vietnam requires a thorough understanding of the legal and regulatory requirements. By adhering to these compliance obligations, your company can avoid legal issues and focus on growth and success. Consider consulting with local legal and business experts to ensure full compliance with all Vietnamese laws and regulations.
