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Guidelines for Establishing a China Company in Vietnam

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Procedure for Establishing a Chinese Company in Vietnam requires foreign investors to comply with Vietnamese legal regulations. Vietnam is currently one of the most dynamic economies in Southeast Asia and an attractive destination for foreign investors. However, to legally establish and operate in Vietnam, Chinese investors must follow a series of legal procedures and requirements. This article provides a detailed analysis of the procedural steps, legal requirements, and key considerations when establishing a Chinese company in Vietnam.

Guidelines for Establishing a China Company in Vietnam

 

Legal Basis

The establishment of a company in Vietnam by Chinese investors is governed by several key legal instruments that protect the rights of foreign investors while ensuring lawful business operations. The principal legal documents include:

  • Investment Law 2020: This law sets out the principles and conditions applicable to foreign investors conducting investment activities in Vietnam. It also provides specific provisions on permitted business sectors, investment conditions, and procedures for granting investment licenses to foreign investors.
  • Enterprise Law 2020: This law regulates the organization, establishment, and management of various types of enterprises in Vietnam, including the rights and obligations of foreign investors in enterprises.
  • Decree 31/2021/ND-CP guiding the implementation of the Investment Law, providing detailed regulations on investment procedures, particularly for enterprises with foreign investment capital.
  • Decree 01/2021/ND-CP on enterprise registration, which sets out the procedures for registration and management of enterprises in Vietnam, including those with foreign investment capital.

Common Types of Enterprises for Chinese Investors

Vietnam allows Chinese investors to establish various types of enterprises. Specifically, Chinese investors may choose one of the following forms:

  • 100% Foreign-Owned Enterprise: This is the most common form for Chinese investors who wish to fully control their enterprise in Vietnam without partnering with local Vietnamese entities. Such enterprises may operate in most sectors not restricted or prohibited for foreign investment under Vietnamese law.
  • Joint Venture Company: Established between foreign investors (Chinese) and Vietnamese investors. In a joint venture, the parties contribute capital and share profits and risks according to the agreed ratio. This form is suitable when Chinese investors wish to collaborate with local partners to leverage market access, policies, or distribution networks of Vietnamese partners.
  • Representative Office: A representative office does not have independent legal personality and is not permitted to conduct revenue-generating business activities. However, it may carry out market research, brand promotion, trade promotion, and support the parent company’s business activities in Vietnam.
  • Branch: A branch is a dependent unit of the parent company in China and may perform certain business activities such as sales and customer services, but it does not possess independent legal personality. Branches are not permitted to conduct profit-generating transactions directly but may support the parent company’s operations.

Procedure for Establishing a Chinese Company in Vietnam

Establishing a Chinese company in Vietnam requires investors to comply with registration, licensing, and other legal procedures to ensure lawful operation. The following are the basic steps in this process.

Step 1: Selection of Enterprise Type and Preparation of Dossier

Prior to commencing incorporation procedures, Chinese investors must select the appropriate enterprise form based on their business needs and investment strategy. After determining the enterprise type, investors must prepare the following documents for investment registration at the Department of Planning and Investment:

  • Investment Registration Certificate: Chinese investors must prepare an investment registration dossier, including information on the enterprise type, business lines, investment capital, location, and other commitments.
  • Legal Documents of the Investor: Including a certified copy of the parent company’s business registration certificate in China, documents proving the investor’s financial capacity, and information regarding the legal representative.
  • Land Use Rights Certificate or Land Lease Contract: If the Chinese company requires land lease or purchase in Vietnam, lawful documents proving land use rights or a land lease contract must be provided.

Step 2: Application for Investment Registration Certificate

Once the dossier is fully prepared, the investor submits it to the Department of Planning and Investment to obtain the Investment Registration Certificate. The processing time for issuance ranges from 10 to 15 working days, depending on the nature of the project and the completeness of the dossier.

Step 3: Enterprise Registration and Issuance of Enterprise Registration Certificate

After obtaining the Investment Registration Certificate, Chinese investors proceed with enterprise registration at the Department of Planning and Investment. The dossier includes information on the company name, business lines, address, charter capital, legal representative, and other required conditions.

Step 4: Tax Registration and Opening of Bank Account

Upon issuance of the Enterprise Registration Certificate, the Chinese company must register its tax identification number with the local Tax Department. Simultaneously, the company is required to open a bank account at a Vietnamese bank to conduct financial transactions.

Step 5: Seal Registration

The Chinese company must carry out procedures for seal engraving and registration of the legal representative with the Business Registration Authority. The legal representative may be a Vietnamese citizen or a foreign individual with full legal capacity.

Key Legal Issues to Note

Selection of Appropriate Business Lines

Business lines in which Chinese investors may engage in Vietnam are regulated under provisions on prohibited or conditional sectors for foreign investment. Investors must be aware of restricted sectors, such as banking and finance, telecommunications, arms manufacturing, resource exploitation, real estate, and certain other industries. Thorough review of current legal regulations is essential to avoid legal risks.

Tax Policies and Tax Incentives

Chinese investors must fulfill tax obligations for their company in Vietnam, including corporate income tax (CIT), value-added tax (VAT), personal income tax (PIT), and other applicable taxes. However, foreign-invested enterprises may be eligible for tax incentives such as exemptions or reductions in corporate income tax during the initial years of operation, particularly when investing in priority sectors such as high technology, manufacturing, or industrial zones.

Investment Protection Agreements and Investor Rights

Vietnam has entered into investment protection agreements with China, safeguarding the rights of Chinese investors operating in the Vietnamese market. These agreements protect investors against risks such as nationalization of assets or unfair treatment in business operations. A thorough understanding of rights and obligations under these agreements is essential for long-term protection of the company’s interests.

Related Articles:

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Conditions for Foreigners to Establish a Company in Vietnam

Company Establishment Support Services for Chinese Companies in Vietnam Provided by BKC Law

BKC Law offers a comprehensive company establishment service tailored for Chinese investors seeking to enter and expand business operations in the Vietnamese market in an effective and lawful manner. With a team of lawyers possessing extensive experience and in-depth knowledge of foreign investment regulations, BKC Law commits to supporting clients throughout the entire company incorporation process—from obtaining the Investment Registration Certificate, preparing legal dossiers, to completing tax, seal, and business licensing procedures. This service not only ensures full compliance with Vietnamese law but also saves time and costs, enabling businesses to commence operations promptly in Vietnam.

For free legal consultation at BKC Law, please contact our Lawyers using the following information:

Telephone: 0901 3333 41

Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, Ben Nghe Ward, District 1, Ho Chi Minh City

Binh Tan Office: 41 Ten Lua Street, An Lac Ward, Binh Tan District, Ho Chi Minh City

Related Articles:

Procedure for Establishing a 100% Foreign-Owned Company in Vietnam

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Procedure and Process for Establishing a Foreign Company in Vietnam – Updated 2025

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