Is it easy for foreigners to set up and run abusiness in Vietnam? What are the pros and consof setting up a business (SME or multinational)in Vietnam?
Foreign investors could establish their presence in Vietnam and legally register a company by forming a branch/representative office, or set up a Limited Liability Company, Joint Stock Company, Partnership or Business Cooperation Contract. There are 2 steps for registering a business in Vietnam: Obtaining Investment and Enterprise license to get IRC and ERC applications. As for a branch or representative office establishment, IRC and ERC applications could be replaced by Branch/Representative Office License applications.
Vietnam is one of the fastest-growing economies in Asia. Even during the pandemic, Vietnam maintained economic growth through 2020 with 2.94% GDP growth and it is forecast to reach 7.5% in 2022. Moreover, Vietnam has a young and well-educated new generation and more than 45% of the Vietnamese population is between 25 and 54 years old.
Last but not least, the Vietnamese government actively supports foreign businesses and encourages entrepreneurial development with policies and FTAs. For example, Vietnam has already joined in 17 FTAs to enhance its trading and FDI rate. However, the tax system is very challenging for new investors, about 32 corporate tax payments for a country each year. Besides, the Vietnamese government has strict regulations on businesses that are 100% foreign-owned with a lengthy registration process which involves many steps.