Conditions and Procedures for Establishing a Singapore Company in Vietnam

Foreign direct investment in Vietnam is growing rapidly, especially from Singapore. Enterprises from Singapore looking to do business in Vietnam must comply with local laws on investment and enterprise registration. As a member of ASEAN and the WTO, Vietnam offers a relatively favorable legal framework for foreign investors, especially those from Singapore — a country with close economic ties to Vietnam. However, to establish a Singapore company in Vietnam, certain legal requirements and administrative procedures must be followed.

Legal Basis

• Law on Investment 2020

• Law on Enterprises 2020

• Decree 31/2021/ND-CP guiding the Law on Investment

• Decree 01/2021/ND-CP on enterprise registration

• WTO commitments and Vietnam – Singapore Free Trade Agreements (VSFTA, CPTPP)

• Sector-specific regulations for conditional business lines

Conditions for Establishing a Company in Vietnam for Singaporean Businesses

Investor Eligibility
The investor must be a legal entity or individual of Singaporean nationality. In the case of a legal entity, the parent company in Singapore must provide full documentation to prove its legal status, such as: Certificate of Incorporation, Company Charter, Appointment Decision of Legal Representative, etc.

Business Sectors
Investors are allowed to register for business sectors that are not prohibited or restricted under Vietnam’s WTO and FTA commitments. Some sectors may require market access conditions or approval from specialized regulatory agencies.

Ownership Ratio
In most sectors, Singaporean investors may own up to 100% of the charter capital in companies established in Vietnam. However, certain fields such as distribution, logistics, education, and real estate may impose ownership limits or require joint ventures with local enterprises.

Project Location
The project must have a clear and appropriate address that aligns with zoning regulations and does not violate national defense, security, or environmental regulations.

Procedures for Establishing a Singapore Company in Vietnam

Establishing a company with investment capital from Singapore in Vietnam involves two main stages:

Stage 1: Obtaining the Investment Registration Certificate (IRC)
Required documents include:

• Proposal for investment project implementation

• Investment project description

• Legal documents of the investor

• Financial capacity report (financial statements, bank confirmation)

• Lease agreement and legal documents of the business location

• Explanation of market access condition compliance (if applicable)
  Processing time: 15 working days from the date of submission of a complete and valid dossier.

Stage 2: Business Registration – Obtaining the Enterprise Registration Certificate (ERC)
Required documents include:

• Business registration application

• Company charter

• List of members/shareholders

• Identification documents or business registration certificate of the investor

• Power of attorney for representatives (if applicable)
  Processing time: 3 working days from the date of receiving complete and valid documents.

Legal Risks and Notes When Establishing a Singapore Company in Vietnam

Financial Capability Proof:
Failure to prove financial capacity may result in rejection of the IRC application. This is a crucial step that many foreign investors often overlook.

Conditional Business Sectors:
Investors must carefully review the list of conditional business sectors, especially in fields like education, healthcare, logistics, and real estate.

Market Access Conditions:
According to the list of prohibited and restricted sectors for foreign investors under Decree 31/2021/ND-CP, investors should analyze carefully before registering their business sectors.

Document Requirements:
Some documents from foreign investors must be legalized. Delays in document legalization may affect the company establishment timeline.

Incentive Policies for Foreign Investors in Vietnam

Tax Incentives:
Highly efficient investment projects may enjoy up to 4 years of corporate income tax (CIT) exemption from the start of operations, and a 50% tax reduction for up to 9 subsequent years. Preferential CIT rates of 10%, 15%, or 20% also apply to encouraged investment sectors. For import-export tax, FDI companies may be exempt from or receive reductions on import duties for machinery, equipment, materials, and components used in production. As for value-added tax (VAT), Vietnam offers exemptions or reductions for certain export goods and services. Land use tax may be exempted or reduced for projects with large land areas, long-term land use, or socio-economic development purposes.

Administrative Procedures:
Investment procedures have been streamlined to facilitate foreign-invested businesses. From investment registration to enterprise establishment, the process is fast, transparent, and efficient. Additionally, investors receive support through professional consulting services, legal information, Q&A support, and assistance in completing necessary administrative procedures.

Land Incentives:
FDI enterprises may receive favorable rental rates and long-term land leases. The government also assists in site clearance and technical infrastructure development to ensure timely project implementation.

Human Resources:
Foreign enterprises may recruit both local and foreign workers based on production and business needs. National vocational training programs help improve labor quality to meet the needs of FDI enterprises.

Foreign Exchange:
Foreign-invested enterprises are allowed to freely convert foreign currencies on the market and are entitled to remit profits abroad after fulfilling tax obligations in Vietnam.

Overall, Vietnam’s investment incentive policies are designed to protect investors’ legitimate rights while promoting sustainable development and international integration. This is a major competitive advantage that makes Vietnam an attractive destination for businesses from Singapore and other countries.

Investment Consulting Services for Foreign Businesses at BKC Law

BKC Law offers a comprehensive package of services:

• Consulting on suitable investment sectors and methods in accordance with international commitments and Vietnamese laws

• Drafting investment documents, company charters, joint venture contracts, shareholder agreements

• Representing clients in applying for IRC, ERC, and sub-licenses

• Assisting in opening investment capital accounts, transferring funds, and legal capital contribution

For free legal consultation at BKC Law, please contact our lawyers at:

Phone: 0901 3333 41

Email: info@bkclaw.vn

Head Office (District 1): 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, HCMC

Branch Office (Bình Tân): 41 Tên Lửa, Bình Tân District, HCMC

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