✨ Post-Establishment Compliance Checklist: Navigating Legal Obligations After You Establish a Company in Vietnam
For foreign investors, establishing a company in Vietnam is a significant milestone. However, the journey doesn't end there. The true test of a sustainable, successful venture lies in diligent post-incorporation compliance.
💡 Crucial Insight: Incorporation is merely the prologue. The true test of a sustainable, successful venture lies in diligent post-incorporation compliance.
We understand that for our F1 clients – international business leaders – decisions are made when trust is established, when clarity replaces ambiguity, and when certainty prevails over promises. You demand transparency, verifiable commitments, and a partner who safeguards your interests. This guide is crafted to illuminate the essential compliance landscape after you establish a company in Vietnam, ensuring your operations remain robust, legal, and free from unforeseen risks.
Navigating your legal obligations post-establishment in Vietnam.
📊 I. Unpacking Recurring Tax Obligations: Transparency as the Bedrock of Trust
Navigating the Vietnamese tax system is a continuous obligation. Your company will be subject to various taxes, each with specific declaration and payment deadlines.
⚠️ Our Approach: As your legal counsel, we understand your need for concrete evidence over mere promises. Our approach ensures every tax obligation is meticulously documented, with clear reporting and responsible parties assigned, delivering the transparency you rightfully demand.
1. Corporate Income Tax (CIT)
Understanding Your Liability: CIT is levied on the taxable income generated by your company. The standard rate is currently 20%, though certain industries or investment projects may qualify for incentives (e.g., lower rates, tax holidays, or reductions).
Key Declarations & Payments:
- Provisional Quarterly Payments: Companies are required to provisionally pay CIT on a quarterly basis, based on their estimated business results.
- Annual Finalization: A final annual CIT declaration and payment are due by the 90th day following the end of the fiscal year.
✅ Our Assurance: We ensure your CIT declarations are accurately prepared, reflecting your financial performance in strict adherence to Vietnamese tax laws. This meticulous process provides the clear, verifiable reports you need to maintain confidence in your compliance.
2. Value Added Tax (VAT)
How VAT Works: VAT is an indirect tax on the consumption of goods and services. Businesses act as VAT collectors, charging VAT on their sales (output VAT) and paying VAT on their purchases (input VAT). The difference is either remitted to the tax authorities or claimed as a refund.
Declaration Methods & Rates:
- Deduction Method: Applied to businesses with robust accounting systems, allowing input VAT to be deducted from output VAT. Standard rates are 0%, 5%, and 10%, depending on the goods/services.
- Direct Method: Typically for smaller businesses, calculated directly on revenue.
Filing Frequency: Monthly or quarterly, depending on your company's revenue threshold.
🤝 Our Commitment: Our team ensures your VAT declarations are prepared with precision, minimizing errors and optimizing your tax position. We provide clear, verifiable reports of all filings, affirming our dedication to transparent partnership over opaque transactions.
3. Personal Income Tax (PIT) for Employees
Employer's Responsibility: As an employer, your company is responsible for withholding PIT from your employees' salaries and wages, and remitting it to the tax authorities.
Taxable Income: Includes salaries, wages, allowances, bonuses, and other income from employment. Progressive tax rates apply, ranging from 5% to 35% for residents, and a flat 20% for non-residents.
Declarations: Monthly or quarterly PIT declarations are required, along with an annual PIT finalization.
🛡️ Safeguarding Your Reputation: We meticulously manage PIT calculations and filings, ensuring full compliance and mitigating risks for both your company and your employees. This reflects our commitment to protecting a part of your reputation and financial plans in Vietnam.
4. Other Taxes, Fees & Levies
- Business License Tax (BLT): An annual fixed tax based on registered capital.
- Foreign Contractor Tax (FCT): Applicable to foreign organizations/individuals conducting business in Vietnam without establishing a legal entity, often via contracts.
- Environmental Protection Tax: For businesses involved in activities that may impact the environment.
🚀 Our Proactive Approach: We keep you informed of all applicable taxes, ensuring no detail is overlooked and all payments are made on schedule.
⚖️ II. Navigating Labor Law Compliance: Precision for Uninterrupted Operations
Recruiting talent is just the first step; ensuring full compliance with Vietnam's labor laws is critical for stable operations and avoiding disputes. We understand that you prioritize partners who offer clear timelines, comprehensive support, and real-time updates to prevent any disruptions to your business plans.
1. Labor Registration & Usage
- Initial Notification: Within 30 days of commencing operations, your company must declare its labor usage to the local Department of Labor, Invalids and Social Affairs (DOLISA).
- Updates: Any significant changes in labor usage (e.g., mass hirings, layoffs) must also be reported.
⚙️ Our Streamlined Process: We manage all necessary labor registrations and updates, ensuring your company remains compliant from day one. Our bilingual support and clear process roadmaps guarantee efficiency.
2. Labor Contracts
- Mandatory Requirements: All employment relationships must be formalized through written labor contracts, specifying terms like job descriptions, working hours, salary, benefits, and contract duration.
- Types of Contracts: Indefinite-term, definite-term, and seasonal/task-based contracts.
✍️ Our Expert Drafting: We assist in drafting legally sound labor contracts that protect your interests while adhering strictly to Vietnamese labor regulations, minimizing future disputes.
3. Social, Health & Unemployment Insurance (SHUI)
- Mandatory Contributions: Employers and employees are legally required to contribute to Social Insurance, Health Insurance, and Unemployment Insurance funds. These contributions provide essential social security benefits.
- Calculation Basis: Contributions are typically calculated as percentages of an employee's monthly salary (capped at specific amounts).
⏰ Timely Compliance: We manage the complex calculations and ensure timely registration and monthly payments to the relevant social insurance agencies.
4. Internal Labor Regulations (ILR)
- Requirement: Companies employing 10 or more employees must register their Internal Labor Regulations with DOLISA.
- Content: ILRs govern workplace rules, disciplinary procedures, working hours, rest breaks, and other internal policies.
📋 Our Guidance: We help develop and register comprehensive ILRs that align with Vietnamese law and your company’s operational needs.
5. Work Permits & Temporary Resident Cards for Foreigners
- Crucial for Expatriates: Foreigners working in Vietnam generally require a work permit. Obtaining this permit is a prerequisite for applying for a temporary resident card (TRC), allowing long-term stay.
- Complex Process: The application involves numerous documents, background checks, and approvals from various government bodies.
🌍 Our End-to-End Support: This process can be intricate and time-consuming. We provide full, end-to-end support for work permit and TRC applications, ensuring a smooth, compliant pathway for your foreign staff to operate legally in Vietnam. We manage the timeline, prepare documentation, and communicate updates, so you can avoid delays impacting your key personnel.
📈 III. Essential Reporting & Record-Keeping: The Mandate for Transparency
Beyond tax declarations, your company must submit various periodic reports to different state agencies. For F1 investors, this is where transparency solidifies trust – knowing that every commitment is backed by verifiable reports and a clear audit trail.
1. Financial Reports
- Annual Financial Statements: Every company must prepare and submit annual financial statements (Balance Sheet, Income Statement, Cash Flow Statement, Notes to Financial Statements) to the tax authorities and statistical offices.
- Auditing: FIEs are generally required to have their annual financial statements audited by an independent auditing firm.
✅ Our Role: We ensure your financial reports are compliant with Vietnamese Accounting Standards (VAS) and submitted on time, providing the reliable data you expect.
2. Statistical Reports
- Periodic Submissions: Companies are required to submit various statistical reports to the General Statistics Office (GSO) and provincial/city statistical offices on a monthly, quarterly, or annual basis. These reports collect data on business performance, labor, and economic indicators.
📊 Our Diligence: We manage the preparation and timely submission of all mandated statistical reports, ensuring your data contributes accurately to national economic insights while maintaining your compliance.
3. Investment Reports to Investment Registration Authority (IRA)
- Regular Updates: FIEs must periodically report on their investment activities to the Investment Registration Authority (IRA) (e.g., Department of Planning and Investment - DPI). These reports typically include information on project implementation progress, disbursed capital, and operational status.
🏢 Our Oversight: We help you compile and submit these reports accurately and on schedule, demonstrating your commitment to your investment project in Vietnam and avoiding potential penalties for non-compliance.
📜 IV. Navigating Operational Licenses: Beyond the Initial Setup
Establishing a company provides the legal framework, but many sectors require additional "sub-licenses" or permits to operate lawfully. We understand you need a partner with the experience and team to guide you from A-Z, ensuring no critical operational license is missed.
1. Sector-Specific Licenses
Conditional Business Lines: Vietnam has a list of "conditional business lines" that require specific licenses, permits, or certifications beyond the initial Enterprise Registration Certificate. These can include:
- Food Safety Certificates: For businesses in the food and beverage industry.
- Fire Prevention & Fighting Certificates: For premises meeting certain criteria.
- Environmental Permits: Depending on the nature and scale of your operations, an Environmental Impact Assessment (EIA) or Environmental Protection Plan might be required.
- Licenses for Education, Healthcare, Finance, Logistics: Highly regulated sectors will have their own extensive licensing requirements.
🌟 Our Expertise: Having successfully assisted numerous foreign investors across diverse sectors, we proactively identify and secure all necessary operational licenses specific to your business activities. We navigate the intricate application processes, manage communication with authorities, and ensure your operations are legally robust from every angle.
🗓️ V. Crucial Deadlines & Timelines: Precision Over Pace
While speed is often desired, for compliance, certainty and accuracy are paramount. We don't promise the fastest process if it compromises accuracy or invites future risks. Our focus is on precision and certainty, ensuring all deadlines are met correctly the first time, preventing costly errors or re-dos. We understand your skepticism towards services promising "too fast" timelines, recognizing that proper process requires diligence.
- Monthly/Quarterly Deadlines: VAT, PIT, SHUI contributions.
- Annual Deadlines: CIT finalization, annual financial statements, business license tax, and annual investment reports.
- Specific License Timelines: Each operational license has its own application and renewal periods.
⏳ Our Methodical Approach: We provide you with a clear, comprehensive compliance calendar, outlining all critical deadlines. Our internal system ensures timely reminders, preparation, and submission of all required documents, removing the burden of tracking from your shoulders. Our bilingual team provides constant updates, so you are always informed.
🚨 VI. Risks of Non-Compliance: Protecting Your Investment and Reputation
Choosing your partner in Vietnam is an act of entrusting a part of your reputation and financial well-being. Non-compliance risks significant penalties, tax arrears, and operational disruption. We stand with you, committed to mitigating these risks, offering the unwavering support you need in a foreign market.
- Financial Penalties: Late filings, incorrect declarations, or non-payment of taxes and contributions can result in substantial fines.
- Tax Arrears & Interest: Underpaid taxes will be subject to collection, often with accrued interest.
- Business Suspension/Revocation: Serious or repeated non-compliance can lead to temporary suspension of operations or even revocation of your business licenses.
- Reputational Damage: Legal issues can severely impact your company's standing, affecting investor confidence, client relationships, and employee morale.
- Disputes & Legal Action: Non-compliance, especially with labor laws, can lead to costly disputes with employees or government agencies.
⚠️ Our Protective Shield: We aim to be your steadfast partner, providing ongoing support and proactive advice. We act as your primary point of contact for any challenges, ensuring you are never abandoned and always have expert guidance. This protection is what you need most when navigating a new legal landscape.
⏭️ VII. Beyond Initial Compliance: Anticipating Future Complexities
As your operations mature, scenarios like capital or share transfers may arise. This insight is critical: "If I transfer capital/shares in Vietnam, what taxes will I have to pay, at what rate, who is responsible for declaration and payment, and what should I be aware of to avoid risks or disputes?"
❓ What are the tax implications of Capital/Share Transfers in Vietnam?
Capital Transfer Tax Implications:
- For Corporate Sellers: Capital gains from the transfer of shares/capital portions are generally subject to Corporate Income Tax (CIT).
- For Individual Sellers: Capital gains are subject to Personal Income Tax (PIT) (typically 0.1% on the transfer value for publicly listed shares, or 20% on the gain for unlisted shares/capital portions).
- Non-Resident Considerations: Specific withholding tax rules apply to non-resident entities or individuals transferring capital/shares in a Vietnamese entity.
Responsibility & Avoidance: The responsibility for declaration and payment often lies with the transferor, but accurate valuation and clear documentation are paramount to avoid disputes. Proactive planning and expert advice are crucial to navigate these complexities, ensuring compliance and avoiding future disputes or hidden fees.
This underscores the need for a strategic partner who can not only manage your day-to-day compliance but also anticipate and expertly address future, more complex challenges, providing comprehensive protection beyond initial setup.
✨ Conclusion
Successfully operating a foreign-invested company in Vietnam demands continuous diligence and a deep understanding of the local regulatory environment. The journey of establishing a company in Vietnam is just the beginning. Your commitment to post-establishment compliance is the true measure of your business's longevity and success here.
🤝 Our Partnership: As your trusted legal advisors, we are not here to merely "close a deal" but to build a strategic partnership based on mutual respect, clear communication, and unwavering commitment. We offer not just promises, but concrete evidence through transparent processes, clear reporting, and dedicated support. We understand that you value certainty, accuracy, and the assurance that your business is protected in a foreign land. Let us be the partner who ensures your operations in Vietnam are not just compliant, but thrive sustainably.