Documente Academic
Documente Profesional
Documente Cultură
in Vietnam
2016
www.pwc.com/vn
Disclaimer
2016
constitute financial, legal, tax
or other professional advice. Foreword 04
You should not act upon the
information contained in this Executive Summary 07
publication without obtaining
specific professional advice.
Whilst every care has been taken
in preparing this document, 1. An Overview of Vietnam 08
PwC makes no guarantee, 5th Edition, July 2016
representation or warranty
2. Doing Business in Vietnam 18
(expressed or implied) as to its
accuracy or completeness, and
under no circumstances will
PwC be liable for any loss caused
Hanoi 3. Taxation 22
by reliance on any opinion or
statement made in this document.
Except as specifically indicated, 4. Audit and Accountancy 50
the expressions or opinion are
those of PwC only and are subject
to change without notice. This 5. Human Resources and Employment Law 52
document shall not be copied,
reproduced, transmitted or further
distributed by any recipient. 6. Trade 54
The materials contained in this
document were assembled in 7. Banking 58
July 2016 and were based on the
law enforceable and information Ho Chi Minh City
Vietnams broad based growth, low The message for those entering the
wages and a strong economic outlook market or expanding their presence in
continue to make it an attractive place Vietnam is clear: make sure that you are
for investment and a favourite solution to fully prepared and committed before
rising manufacturing costs elsewhere. investing. The key to success is to have
fully assessed your markets and
Vietnams dynamic environment, risks and ensure that you take time to
reflected in a young population, growing invest in knowing your customers and
wealth, changing consumer attitudes, partners, your government touch points
greater mobility and urbanisation are and stakeholders.
pushing the country through a period of
great change. This guide contains references to some
common issues that investors should be
For many, the benefits of locating key aware of when operating in Vietnam,
parts of the supply chain in Vietnam but each case is different and specific
are compelling but market forces such advice should always be sought.
as a rising middle class and the further
opening up the economy also bring
access to exciting new sectors and
63
8
7
6
municipalities & provinces 5
4 5.4%
6%
6.7%
3
2 Manufacturing
1
Capital city: Hanoi Vietnamese 0 33%
2013 2014 2015
Major export partners
3rd largest, important seaport: International
dialling code
Da Nang Total exports and imports Others
29%
US
21%
Billion USD
EU
Largest city:
+84
200 Japan 19%
9% China
162 166
Ho Chi Minh City 150
150 148
Export
11%
ASEAN
11%
Import
Currency
Area and population: 100
Foreign investment
over 331,600 50
Disbursed FDI
(median age: 29) 2014 17%
Business and
banking hours
2015 $24 bn $14.5 bn
Ination
People of working age in employment: $20 bn
2014 2015
48 million 2015
2014
0.6
1.8 Key FDI investors
8am to 5pm 2013
2012
6
7
Unemployment rate: Monday to Friday
18
2%
2011
Korea
Other
0 5 10 15 20 29%
Stock exchange %
48%
Prime Minister
A nationwide congress ( National Congress) of Vietnams Nguyen Xuan Phuc
Communist Party is held every ve years, with the most recent
being in early 2016, determining the countrys orientation and General Secretary
Nguyen Phu Trong
strategies and adopting its key policies on solutions for
socio-economic development. The National Congress elects the
central committee, which in turn elects the politburo.
Hierarchy of regulations:
The National
Assembly The government Ministries
Various other authorities
100% Equitisation
Permitted foreign
1. 2. 3.
About 340 SOEs will
ownership can increase be liquidated, with an
to 100% for most sectors estimated value of US$25
(Decree 60/2015) billion Be prepared for See how Vietnam Understand
major changes fits into your Vietnam
and be alert to the supply chain
Six major growth drivers will potential
enhance opportunities for
investors in Vietnam
4.
Align business
5.
Invest in Vietnam
6.
Invest in
strategies competencies relationships
with regional
1. 2. 3. 4. 5. 6. development agenda
New FTAs: TPP Cost competitive A young and Fast growing A stable Infrastructure
and EU-Vietnam production base growing economy government development
FTA Labour costs in workforce Vietnam is known to committed to Large scale
7. 8. 9.
Enhances Vietnams Vietnam are lower Vietnam has an be one of the most infrastructure needs
than the rest of Asia. dynamic economies growth create investment
economic integration educated workforce Vietnam has a stable
into the global An ideal production and is now in a in the world. GDP opportunities.
base for companies growth is expected social-political Vietnams construction
economy and supply period of golden environment. The Invest Share Apply international
chain, including major thinking of shifting population structure to be between 6% output value grew
or diversifying out of to 7% from 2016 to government is also 11.4% in 2015. in people the rewards standards
developed markets in - where 45% is under committed to creating
North America, Europe China. 30 years of age. 2018.
a fair and attractive
and Asia. business environment
for foreign investors.
Doing Business in Vietnam Foreign investors may also buy an 2. Joint-stock Company
permitted in a few sectors. Branches of
foreign companies are different from
interest in an existing domestic representative offices in that a branch
enterprise, subject in some cases to A joint-stock company is a limited is permitted to conduct commercial
ownership limitations which vary liability legal entity established through a activities in Vietnam.
depending on the industry sector. subscription for shares in the company.
5. Representative Offices
The choice of investment vehicle Under Vietnamese law, this is the only
will depend on factors such as the type of company that can issue shares. Foreign companies with business
number of investors, industry, size The charter capital of a joint-stock relations or investment projects
of the project and whether there is company is divided into shares and in Vietnam may apply to open
any intention to list. each founding shareholder holds shares representative offices in Vietnam.
corresponding to the amount of capital
the shareholder has contributed to the A representative office is not an
company. independent legal entity and may not
conduct direct commercial or revenue-
Forms of business A joint-stock company is required to generating activities (i.e., the execution
have at least three shareholders. There of contracts, receipt of funds, sale or
is no limit on the maximum number of purchase of goods, or provision of
1. Limited-liability Company shareholders in such companies. services).
A limited-liability company is a legal The governance of a joint-stock A representative office is permitted to:
entity established by its members company includes a general meeting of Act as a liaison office; Conduct market
through capital contributions to the shareholders and comprises the board research;
company. The capital contribution of management, the chairman of the Promote its head offices business and
of each member is treated as equity board of management, the general investment opportunities.
(charter capital). The members of a director and a board of supervisors
limited-liability company are liable (where the joint stock company has at Thus representative offices can provide
for the financial obligations of the least 11 shareholders, or if a corporate a wide range of ancillary support to
limited-liability company to the shareholders holds more than 50% of the their head offices overseas. This is a very
extent of their capital contributions. shares of the joint-stock company). common form of presence in Vietnam
for foreign companies, particularly
The management structure of a A joint-stock company may either be those in the first stage of a market entry
limited- liability company would 100% foreign-owned or may take the strategy.
normally consist of the members form of a joint venture between both
council, the chairman of the foreign and domestic investors.
members council, the general 6. Business Cooperation
director and a controller (or board Contract (BCC)
of supervisors where the limited-
3. Partnership
liability company has more than 11 A BCC is a cooperation agreement
A partnership may be established between foreign investors and at least
members).
between two individual general partners.
A limited-liability company
Step 1
The provincial
department of
OR
The provincial industrial
zone management
15
days Investment
planning and authority or economic zone Registration
investment management authority
In practice, it usually takes
Certificate
(For projects located inside longer.
(For projects located outside of
industrial zones, export processing industrial zones, export processing
zones, high- tech zones and zones, hightech zones and economic
economic zones) zones)
one Vietnamese partner in order to Both public and private investors are
Liquidation and
carry out specific business activities. encouraged to participate in PPP Contracts.
The rights and obligations of the foreign
Bankruptcy
Step 2
The provincial
3
days Enterprise
This form of investment does not investor will be regulated by the signed PPP department of Registration
constitute the creation of a new contracts and the applicable regulations planning and Certificate
investment In practice, it usually takes
legal entity. The investors in a BCC governing such contracts. Investment sectors A company can only be voluntarily longer.
generally share the revenues and/ include: liquidated if it is solvent and all
or products arising from a BCC and creditors can be paid. The process Note: Investment in conditional sector activities is subject to more cumbersome licensing procedures. These may require,
have unlimited liability for the debts Transportation infrastructure and generally takes 6 - 12 months and inter alia, the licence application to be reviewed also at the central government ministry level in Hanoi.
of the BCC. relevant services; requires a final tax audit.
Lighting systems, clean water supply
systems, water drainage systems, water/waste Representative office
7. Public and Private For insolvent companies, a new
collection and treatment systems, social/ Bankruptcy Law came into effect
Partnership Contracts resettlement houses, cemeteries;
Power plants and power transmission
1 January 2015. The new law sets
out, inter alia, which parties can The provincial
7
working days
Representative
A Public and Private Partnership lines; department of Office
instigate bankruptcy proceeding,
(PPP) contract is an investment Infrastructure for healthcare, educational industry and trade Licence
procedures for the appointment
form carried out based on a and training, cultural, sport and relevant of a liquidator, organisation of
contract between the government services, offices for government authorities; creditors meetings and priority of
authorities and project companies Infrastructure for commerce, science and creditor payments.
for infrastructure projects and public technology, hydrometeorology, economic Private - Public Partnership (PPP) projects (such as BOT/BTO/BT projects)
services. zone, industrial zone, high- tech zone,
centralised information technology zone, Investment agreement
PPP Contracts includes Build-Operate- information technology application; is signed with an
Transfer (BOT), Build-Transfer (BT), Infrastructure for agriculture and rural authorised State body
Build-Transfer-Operate (BTO), Build- development, services for enhancing the
Own-Operate (BOO), Build-Transfer- correlation of agricultural production with
Lease (BTL), Build -Lease-Transfer The Ministry of
processing and consumption of agricultural Planning and Investment Project contract is signed
(BLT) and Operate-Manage (O&M) products; and Investment Registration with the relevant state body
Contracts. Other sectors according to the Prime Certificate and the project company is
set up in the form of a limited
Ministers decisions. liability company or a joint
stock company.
Transfer Pricing 30
Property Taxes 41
Other Taxes 46
SST is a form of excise tax that applies Automobiles having less than 24 seats 10 - 60
Tax Rates
to the production or import of certain
goods and the provision of certain Motorcycles with cylinder capacity above 125cm3 20
The Law on SST classifies objects subject
services. to SST into two groups:
Airplanes 30
Imported goods (except for various 1. Commodities - cigarettes, liquor, beer,
types of petrol) are subject to SST at automobiles having less than 24 seats, Boats 30
both the import and selling stages. motorcycles, airplanes, boats, petrol, air-
conditioners up to 90,000 BTU, playing Petrol 7 - 10
Taxable Price cards, votive papers; and
Air-conditioner (not more than 90,000 BTU) 10
There are various anti-avoidance rules 2. Service activities - discotheques,
which specify minimum prices for SST massage, karaoke, casinos, gambling, Playing cards 40
purposes. lotteries, golf clubs and entertainment
with betting. Votive papers 70
For example, for certain manufactured
or imported goods which are The SST rates are as follows: Discotheques 40
subsequently sold by a trading entity,
the SST taxable price cannot be less
Massage, karaoke 30
than 93% of the average selling price of
the trading entity. A trading entity is
Casinos, jackpot games 35
the first entity within the distribution
network that has no parent - subsidiary
relationship with or does not have the Entertainment with betting 30
same parent as the manufacturing or
importing company. Golf 20
Lotteries 15
Interest / dividends 5%
Tax deductions include:
Sale of shares/ Capital assignment 0.1% of the sales proceeds
Social, Health and Unemployment A summary of withholding tax rates is presented below:
From 1 January 2016 to 31 December 2017, the salary subject to SI / HI / UI contributions is the salary and 13 Czech Republic 10 10 2
certain allowances stated in the labour contract, but this is capped at 20 times the minimum salary for SI 14 Denmark 10 5/15 2
/ HI contributions and 20 times the minimum regional salary for UI contributions (the minimum salary is
currently VND1,150,000 and the minimum regional salary varies from VND2,400,000 to VND3,500,000 15 Eastern Uruguay (*) (*) 1
depending on the region these minimum salaries are subject to change each year). 16 Egypt 15 15 1
17 Finland 10 10 2
Statutory employer contributions do not constitute a taxable benefit to the employee. The employee
contributions are deductible for PIT purposes. 18 France Nil 10 -
19 Germany 10 7.5/10 2
Other Taxes 20 Hong Kong 10 7/10 2
21 Hungary 10 10 -
Numerous other fees and taxes can apply in Vietnam, including business licence
22 Iceland 10 10 2
tax and registration fees (akin to stamp duty) on the transfer of certain registerable
assets. 23 India 10 10 2
24 Indonesia 15 15 2
41 Myanmar 10 10 2
42 Netherlands 10 5/10/15 2
43 New Zealand 10 10 -
44 Norway 10 10 2
45 Oman 10 10 2
46 Pakistan 15 15 2
47 Palestine 10 10 1
48 Philippines 15 15 2
49 Poland 10 10/15 -
50 Qatar 10 5/10 2
51 Romania 10 15 2
52 Russia 10 15 -
53 San Marino 10/15 10/15 -
54 Saudi Arabia 10 7.5/10 2
55 Serbia 10 10 2
56 Seychelles 10 10 -
57 Singapore 10 5/10 2
58 Slovakia 10 5/10/15 2
59 Spain 10 10 2
60 Sri Lanka 10 15 2
61 Sweden 10 5/15 2
62 Switzerland 10 10 -
63 Taiwan 10 15 -
64 Thailand 10/15 15 2
65 Tunisia 10 10 2
66 Turkey 10 10 2
67 UAE 10 10 1, 2
68 Ukraine 10 10 2
69 United Kingdom 10 10 2
70 United States 10 5/10 1, 2
71 Uzbekistan 10 15 2
72 Venezuela 10 10 2
Notes:
Human Resources
Vietnams population is over 91.7 million determined by the Government from
and is expected to grow at an annual rate time to time.
of 1.3%. Around 60% of the population is
China 17
30 50
Export 14
Japan
25 14
Import
20 Korea 9
28
FTAs
15 US 33
8
AFTA
10 EU 31
11
ASEAN - India ASEAN - China
5
2011 2012 2013 2014 2015 0 10 20 30 40 50 (Billion USD)
Signed and Vietnam - Japan
ASEAN - Australia/
New Zealand effective
Textiles, sewing products Machinery, instruments, accessories Plastic materials Vietnam - Eurasian
$23 billion $8 billion $6 billion Economic Union
End of
Wood and wooden products
negotiation
Computers & Electrical products Petroleum oil, rened
$7 billion
Vietnam - EU /Signed but
$16 billion $5 billion
not yet
effective
TPP
Key import commodities:
Contacts
that we all have an obligation as business leaders, not only to
do the right thing by embedding good social, environmental
and economic practices into our everyday business, but also
to be a catalyst for change by promoting these ethical and
transparent business practices to the marketplace as well.
stewardship, and responsible PwC Vietnam Key Contacts
Our Corporate Responsibility strategy focuses our time, business, community engagement,
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29 Le Duan Street, District 1 Partner, Tax Services
Ho Chi Minh City, Vietnam T: +84 4 3946 2231
T: +84 8 38230796 E: dinh.quynh.van@vn.pwc.com
Our Values Our Awards
Hanoi Office Richard Irwin
We take pride in adding value through our Audit Firm of the Year - Vietnam and Best 16th Floor, Chairman
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and consistency of business processes. Our core Acquisition International Pham Hung Boulevard, T: +84 8 3824 0117
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Tier 1 Leading Tax Advisory Firm, 2016
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International Tax Review
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Teamwork International Tax Review E: nasir.pkm@vn.pwc.com
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come from working Christopher Marjoram
International Financial Law Review Partner, Tax Services
together with colleagues
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and sharing.
Acquisition International Partner, Audit & Assurance Services
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Excellence Notable M&A Law Firm, 2014
Leadership IFLR1000
E: richard.peters@vn.pwc.com
Leading with clients, Delivering what we
leading with people promise and adding Certificate of Merit for Contribution to the Stephen Gaskill
and thought leadership. value beyond what is Tax Consultancy Profession, 2013 Partner, Advisory Services
Leadership demands expected. We achieve Prime Minister of Vietnam T: +84 8 38240125
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integrity.
and agility. Independent Auditing Profession, 2011
Prime Minister of Vietnam
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