Guide to Establishing a Chinese Company in Vietnam

The procedure for establishing a Chinese company in Vietnam requires investors to comply with Vietnamese legal regulations. Currently, Vietnam is one of the most dynamically developing economies in Southeast Asia and an attractive destination for foreign investors. However, to establish and operate legally in Vietnam, Chinese investors must adhere to a series of legal procedures and related processes. This article will provide a detailed analysis of the procedural steps, legal requirements, and key factors to consider when setting up a Chinese company in Vietnam.

Legal basis for establishing a Chinese company in Vietnam

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

• Investment Law 2020: This law stipulates the principles and conditions for foreign investors conducting investment activities in Vietnam. It also outlines specific regulations on the industries in which foreign investors can participate, investment conditions, and the licensing procedures for foreign investors.

• Enterprise Law 2020: This law regulates the organization, establishment, and management of businesses in Vietnam, defining the rights and obligations of foreign investors in enterprises.

• Decree 31/2021/ND-CP: This decree guides the implementation of the Investment Law, detailing investment procedures, particularly for businesses with foreign capital.

• Decree 01/2021/ND-CP: This decree governs enterprise registration, including registration and management of foreign-invested enterprises in Vietnam.

Common types of enterprises for Chinese investors

Vietnam allows Chinese investors to establish different types of enterprises. Investors can choose from the following options:

• 100% foreign-owned enterprise: This is a popular choice for Chinese investors who want full control of their business in Vietnam without partnering with a Vietnamese entity. These businesses can operate in most sectors not restricted or prohibited for foreign investment.

• Joint venture: A company formed between a foreign investor (Chinese) and a Vietnamese investor. Both parties contribute capital, share profits, and risks based on agreed terms. This model is suitable when leveraging local market advantages, policies, or distribution networks.

• Representative office: A representative office does not have independent legal status and cannot conduct revenue-generating activities. However, it can engage in market research, brand promotion, trade facilitation, and support for its parent company in Vietnam.

• Branch: A branch is a dependent unit of the parent company in China that can conduct certain business activities such as sales and customer service but does not have independent legal status. It primarily supports the operations of the parent company.

Procedures for establishing a Chinese company in Vietnam

Chinese investors must complete registration, obtain permits, and fulfill legal requirements to operate legally in Vietnam. The process includes:

Step 1: Choose the business type and prepare documents
Before proceeding, investors must select the appropriate business type and prepare the necessary documents for investment registration with the Department of Planning and Investment. These include:

• Investment registration certificate application, detailing business type, industry, capital, location, and commitments.

• Legal documents of the investor, including a copy of the business registration certificate of the parent company in China, proof of financial capability, and details of the legal representative.

• Land use rights certificate or lease agreement if acquiring or leasing land in Vietnam.

Step 2: Obtain the investment registration certificate
Once the documents are prepared, investors must submit them to the Department of Planning and Investment. The processing time ranges from 10 to 15 business days, depending on the project’s nature and document completeness.

Step 3: Register the enterprise and obtain the business registration certificate
After obtaining the investment certificate, investors must complete business registration with the Department of Planning and Investment, providing company name, business activities, address, capital, legal representative, and other necessary details.

Step 4: Tax registration and bank account setup
The company must register for a tax code with the local tax authority and open a corporate bank account at a Vietnamese bank for financial transactions.

Step 5: Seal registration
The company must create an official seal and register its legal representative with the Business Registration Authority. The representative can be a Vietnamese citizen or a foreign national with legal capacity.

Key legal considerations when establishing a Chinese company in Vietnam

Choosing the appropriate business sector
Chinese investors must ensure their selected industry complies with Vietnam’s foreign investment regulations. Some sectors are restricted, such as banking, telecommunications, arms manufacturing, resource extraction, and real estate. Investors should carefully review current legal provisions to avoid legal risks.

Tax policies and incentives
Chinese investors must fulfill tax obligations, including corporate income tax (CIT), value-added tax (VAT), personal income tax (PIT), and other taxes. However, foreign-invested companies may benefit from tax incentives such as corporate income tax exemptions or reductions, particularly in high-tech, manufacturing, or industrial zones.

Investment agreements and investor rights protection
Vietnam has investment protection agreements with China, safeguarding Chinese investors against risks such as asset nationalization or unfair business practices. Understanding these agreements is crucial for long-term business security.

Egal support services for establishing a Chinese company in Vietnam by BKC Law

BKC Law offers comprehensive solutions for Chinese investors looking to enter and expand in Vietnam effectively and legally. With experienced lawyers knowledgeable in foreign investment regulations, BKC Law assists clients through the entire company formation process, including obtaining investment registration certificates, preparing legal documents, and handling tax, seal, and business licensing procedures. This service ensures compliance with legal requirements, saves time and costs, and optimizes business operations for a smooth market entry in Vietnam.

For free legal consultation at BKC Law, contact us at:

Phone: 0901 3333 41
Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, Ho Chi Minh City
Binh Tan Office: 41 Tên Lửa, Binh Tan, Ho Chi Minh City

Related Articles:

Process and Procedures for Establishing an FDI Company in Vietnam Advised by Lawyers

Consulting on drafting consulting contracts from Ho Chi Minh City lawyers

Conditions for establishing a foreign-invested company