Ey Doing Business in Vietnam 2021

Doing
Business
in Vietnam
2021
This Guidebook is prepared in a collaboration

between Ernst & Young Vietnam Limited and
the Foreign Investment Agency of Vietnam
D o i n g Bu s i n ess I n Vi et n a m 2 0 2 1 1
Glossary of acronyms Table of contents
The following acronyms have been used in this Guidebook Glossary of acronyms 2 Forms of business 30
1. Forms of foreign direct investment 31

APA Advance Pricing Agreements IP Intellectual Property Table of contents 3
2. Forms of enterprise 32
ASEAN Association of Southeast Asian IRC Investment Registration Certificate
Nations Introduction 4 3. Setting up an investment project 33
IT Information Technology and company in Vietnam
BCC Business Cooperation Contract
IZs Industrial Zones Country profile 6
BEPS Base Erosion and Profit Shifting Development of intellectual 36
JSC Joint Stock Company 1. Major airports and seaports 7
Business Licence Fee property
BLF
LLC Limited Liability Company 2. Country snapshot 8
CbCR Country by Country Report 13 Land and housing 38
LOE Law on Enterprise 3. Vietnam advantages
CIT Corporate Income Tax 14
LOI Law on Investment 4. Political structure 1. Land 39
DOLISA Department of Labor, Invalids and 5. Hierarchy of regulations 15 2. Housing 39
M&A Mergers and Acquisitions
Social Affairs
MOF Ministry of Finance 6. Recent law changes to 16
DPI Department of Planning and attract investment and Accounting, taxation and customs 40
Investment ODA Official Development Assistance increase transparency 1. Accounting 41
DTA Double Taxation Agreement OECD Organization for Economic 6.1 Law on Investment 2020 17 2. Taxation 44
Co-operation and Development
EPE Export Processing Enterprise 6.2 Law on Enterprise 2020 19 3. Customs duty and procedures 76
PIT Personal Income Tax 21
EPT Environment Protection Tax 6.3 Law on Tax Administration
PPP Public-Private Partnership Human resources and 82
EPZ Export Processing Zone 7. Equitization 23
employment
R&D Research & Development
ERC Enterprise Registration Certificate
RO Representative Office Investment protection and 24
EU European Union Foreign exchange control 100
investment incentives
SBV The State Bank of Vietnam
EZ Economic Zone
1. Investment protection 25 Useful websites 102
SOE State Owned Enterprise
FIE Foreign Invested Enterprise 2. Types of investment incentives 26
SST Special Sales Tax Foreign Investment Agency 105
FTA Free Trade Agreement and support
TPD Transfer Pricing Documentation 2.1 Forms of investment 26
FCWT Foreign Contractor Withholding Tax
VAS Vietnamese Accounting Standards incentives Ernst & Young Vietnam Limited 106
FDI Foreign Direct Investment
VAT Value Added Tax 2.2 Forms of investment support 27
GDP Gross Domestic Product
VFRS Vietnam Financial Reporting 2.3 Projects eligible for 28
IAS International Accounting Standards investment incentives
Standards
IED Import and Export Duties 2.4 Investment incentives and 29
VND Vietnamese Dong
IFRS International Financial Reporting support in IZs and EZs
WTO World Trade Organization
Standards
2 D o i n g Bu s i n ess I n Vi et n a m 2 0 2 1 3
Glossary of acronyms Table of contents
The following acronyms have been used in this Guidebook Glossary of acronyms 2 Forms of business 30
1. Forms of foreign direct investment 31

APA Advance Pricing Agreements IP Intellectual Property Table of contents 3
2. Forms of enterprise 32
ASEAN Association of Southeast Asian IRC Investment Registration Certificate
Nations Introduction 4 3. Setting up an investment project 33
IT Information Technology and company in Vietnam
BCC Business Cooperation Contract
IZs Industrial Zones Country profile 6
BEPS Base Erosion and Profit Shifting Development of intellectual 36
JSC Joint Stock Company 1. Major airports and seaports 7
Business Licence Fee property
BLF
LLC Limited Liability Company 2. Country snapshot 8
CbCR Country by Country Report 13 Land and housing 38
LOE Law on Enterprise 3. Vietnam advantages
CIT Corporate Income Tax 14
LOI Law on Investment 4. Political structure 1. Land 39
DOLISA Department of Labor, Invalids and 5. Hierarchy of regulations 15 2. Housing 39
M&A Mergers and Acquisitions
Social Affairs
MOF Ministry of Finance 6. Recent law changes to 16
DPI Department of Planning and attract investment and Accounting, taxation and customs 40
Investment ODA Official Development Assistance increase transparency 1. Accounting 41
DTA Double Taxation Agreement OECD Organization for Economic 6.1 Law on Investment 2020 17 2. Taxation 44
Co-operation and Development
EPE Export Processing Enterprise 6.2 Law on Enterprise 2020 19 3. Customs duty and procedures 76
PIT Personal Income Tax 21
EPT Environment Protection Tax 6.3 Law on Tax Administration
PPP Public-Private Partnership Human resources and 82
EPZ Export Processing Zone 7. Equitization 23
employment
R&D Research & Development
ERC Enterprise Registration Certificate
RO Representative Office Investment protection and 24
EU European Union Foreign exchange control 100
SBV The State Bank of Vietnam
EZ Economic Zone
1. Investment protection 25 Useful websites 102
SOE State Owned Enterprise
FIE Foreign Invested Enterprise 2. Types of investment incentives 26
SST Special Sales Tax Foreign Investment Agency 105
FTA Free Trade Agreement and support
TPD Transfer Pricing Documentation 2.1 Forms of investment 26
FCWT Foreign Contractor Withholding Tax
VAS Vietnamese Accounting Standards incentives Ernst & Young Vietnam Limited 106
FDI Foreign Direct Investment
VAT Value Added Tax 2.2 Forms of investment support 27
GDP Gross Domestic Product
VFRS Vietnam Financial Reporting 2.3 Projects eligible for 28
IAS International Accounting Standards investment incentives
Standards
IED Import and Export Duties 2.4 Investment incentives and 29
VND Vietnamese Dong
IFRS International Financial Reporting support in IZs and EZs
WTO World Trade Organization
Standards
This Guidebook is prepared in a
collaboration between Ernst &
Young Vietnam Limited and the
Foreign Investment Agency of
Vietnam to provide interested
investors a basic understanding
of Vietnam's investment climate.
While this publication provides
a broad overview, we highly
recommend that any business
looking to invest in Vietnam seeks
professional advice specific to their
circumstances. The information
included here is either obtained or
derived from a variety of sources in
the public domain. The guidebook is
up to date as at 10 October 2021.
Please be aware that the laws and
regulations may change at any time.
Doing Business In Vietnam 2021 5

Country
profile
Spratly islands
(Truong Sa)
Spratly islands
(Truong Sa)
2
Country snapshot
Location Population
South East Asia 97.58 million (avg. 2020)
The country borders China, Laos and
Cambodia
Employment
Labor force: Estimated 54.8
Land area million (aged 15 and above)
331,236 sq. km Unemployment rate: 2.48%
5 Municipalities and 58 provinces

North: Hanoi – the capital Business hours
Center: Danang City – important seaport Normal working hours is 8 hours
South: Ho Chi Minh City – the largest city per day, or 40-48 hours per week
Language Average annual income

Vietnamese (official language) VND50,988,000
English (widely taught at school)
Climate and weather

Currency Varied from North to South
Vietnamese Dong
Source: GSO, Statistical Yearbook of Vietnam 2020
(Statistical Publishing House, 2021)
2
Country snapshot
Location Population
South East Asia 97.58 million (avg. 2020)
The country borders China, Laos and
Cambodia
Employment
Labor force: Estimated 54.8
Land area million (aged 15 and above)
331,236 sq. km Unemployment rate: 2.48%
5 Municipalities and 58 provinces

North: Hanoi – the capital Business hours
Center: Danang City – important seaport Normal working hours is 8 hours
South: Ho Chi Minh City – the largest city per day, or 40-48 hours per week
Language Average annual income

Vietnamese (official language) VND50,988,000
English (widely taught at school)
Climate and weather

Currency Varied from North to South
Vietnamese Dong
Source: GSO, Statistical Yearbook of Vietnam 2020
(Statistical Publishing House, 2021)
GDP growth (%) GDP by sector in 2020
Others
Agriculture,
forestry & fishery
7.08 7.02 9.8 %
6.81
6.68
6.24 6.21
5.98 14.85 %
5.52
41.63 %
5.42
Services
Industrial
& Construction 33.72 %
2.91
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GSO, Statistical Yearbook of Vietnam 2020 (Statistical Publishing House, 2021)
Source: GSO, Statistical Yearbook of Vietnam 2020 (Statistical Publishing House, 2021)
Inflation (annual average - %) Main export partners in 2020
2.66 3.53 3.54 2.79 3.23

6.8 %
21.2 % 6.8 %
8.2 %
Japan
South Korea
12.4 % ASEAN
17.3 %
China
United States
27.3 %
EU
2016 2017 2018 2019 2020
Others
GDP growth (%) GDP by sector in 2020
Others
Agriculture,
forestry & fishery
7.08 7.02 9.8 %
6.81
6.68
6.24 6.21
5.98 14.85 %
5.52
41.63 %
5.42
Services
Industrial
& Construction 33.72 %
2.91
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GSO, Statistical Yearbook of Vietnam 2020 (Statistical Publishing House, 2021)
Inflation (annual average - %) Main export partners in 2020
2.66 3.53 3.54 2.79 3.23

6.8 %
21.2 % 6.8 %
8.2 %
Japan
South Korea
12.4 % ASEAN
17.3 %
China
United States
27.3 %
EU
2016 2017 2018 2019 2020
Others
3
Export value of Vietnam’s 10 largest commodities (USD billion)
0 10 20 30 40 50 60
Vietnam advantages
Phones & 51.9
Components
51.18
Why Vietnam is an attractive destination for foreign investors

Electronic goods, 36.31
Computers &
Components 44.57 International Vietnam has demonstrated its commitment to international
integration integration and affirming a new role, image, prestige, and position
in the international arena.
Garment 32.83
& Textile In more than three decades of renovation and integration,
29.8
Vietnam has signed 15 FTAs. In the past five years, Vietnam has
signed several new-generation FTAs including CPTPP, EVFTA,
Machinery, 18.3 UKVFTA, RCEP.
Instrument &
Accessory 27.19
Strategic Vietnam is located in the center of South East Asia, sharing
geographic boundaries with the Pacific Ocean, Gulf of Thailand, Laos,
18.31 locations Cambodia and China
Footwear
16.79 Vietnam has over 3,000 km long coastline, near main
international shipping and trading routes.
Wood & Wood

10.65 Competitive Workforce is an advantage of Vietnam with a working-age population
products 12.37 labor force of over 54 million, a steadily increasing proportion of trained
workers, and competitive costs compared to neighboring countries.
8.74
Transport Political Vietnam is one of the more politically stable countries in South
vehicles & Parts 9.09 stability East Asia. Alongside maintaining the one-party state system, its
main aim is economic growth.
8.51
Fishery product Improving Vietnam continues to welcome FDI and foreign companies play an
8.41 investment important role in the economy.
climate Business environment continues improving by new laws
4.2 streamlining the business registration processes. The country
Iron & Steel therefore attains high ranking in business registration procedures
5.25
and ease of doing business.
Vietnamese Government prioritizes the infrastructure improvement
4.17 to attract more FDI.
Fibres of 2019
all kinds 3.73
Preliminary 2020
Dynamic Vietnam is one of the fastest growing economies in the Asia region.
economy GDP growth rate: 6.78% (avg. 2016 – 2019)
Population: 97.58 million (avg. 2020)
3
Export value of Vietnam’s 10 largest commodities (USD billion)
0 10 20 30 40 50 60
Vietnam advantages
Phones & 51.9
Components
51.18
Why Vietnam is an attractive destination for foreign investors

Electronic goods, 36.31
Computers &
Components 44.57 International Vietnam has demonstrated its commitment to international
integration integration and affirming a new role, image, prestige, and position
in the international arena.
Garment 32.83
& Textile In more than three decades of renovation and integration,
29.8
Vietnam has signed 15 FTAs. In the past five years, Vietnam has
signed several new-generation FTAs including CPTPP, EVFTA,
Machinery, 18.3 UKVFTA, RCEP.
Instrument &
Accessory 27.19
Strategic Vietnam is located in the center of South East Asia, sharing
geographic boundaries with the Pacific Ocean, Gulf of Thailand, Laos,
18.31 locations Cambodia and China
Footwear
16.79 Vietnam has over 3,000 km long coastline, near main
international shipping and trading routes.
Wood & Wood

10.65 Competitive Workforce is an advantage of Vietnam with a working-age population
products 12.37 labor force of over 54 million, a steadily increasing proportion of trained
workers, and competitive costs compared to neighboring countries.
8.74
Transport Political Vietnam is one of the more politically stable countries in South
vehicles & Parts 9.09 stability East Asia. Alongside maintaining the one-party state system, its
main aim is economic growth.
8.51
Fishery product Improving Vietnam continues to welcome FDI and foreign companies play an
8.41 investment important role in the economy.
climate Business environment continues improving by new laws
4.2 streamlining the business registration processes. The country
Iron & Steel therefore attains high ranking in business registration procedures
5.25
and ease of doing business.
Vietnamese Government prioritizes the infrastructure improvement
4.17 to attract more FDI.
Fibres of 2019
all kinds 3.73
Preliminary 2020
Dynamic Vietnam is one of the fastest growing economies in the Asia region.
economy GDP growth rate: 6.78% (avg. 2016 – 2019)
Population: 97.58 million (avg. 2020)
4
Political structure
Vietnam is a socialist country operating under the single-party leadership

5
Hierarchy of regulations
The Law on Promulgation of Legal Instruments organizes law into a hierarchy

of the Communist Party. The legislative power in Vietnam is vested in the where higher-ranking legal instruments set out general rules and the lower-
National Assembly of Vietnam. The implementation and administration of ranking legal instruments provide clarification and additional details.
National Assembly legislation is delegated to 63 municipal and provincial
bodies based on geographical location. The President of Vietnam is the head
of the State, and the Prime Minister of Vietnam is the head of the Central Hierarchy of regulations in Vietnam
Government. The Central Government is assisted by various ministries in
charge of specific sectors in the management of the country.
CONSTITUTION
Political structure in Vietnam

LAWS
National Assembly Passed by the National Assembly
ORDINANCES & RESOLUTIONS

Central
Government Issued by the Standing Committee
Government Ministries
ORDERS & DECISIONS

Departments Provincial People’s Provincial People’s Issued by the President
Committee (63) Council (63)
Local
Government DECREES
Districts People’s Districts People’s Issued by the Government
Divisions
Committee Council
DECISIONS
Issued by the Prime Minister on the implementation of regulations
Commune People’s Commune People’s
Committee Council (*)
CIRCULARS & JOINT CIRCULARS
Issued by Ministries or equivalent providing guidance of decrees
(*) Piloting the urban administration model in Hanoi to remove the commune level according
to Resolution No.97/2019/QH14
Source: Law on Promulgation of Legal Instruments No. 80/2015/QH13, dated 22 June 2015, issued by the National
Source: The Constitution of the Socialist Republic of Vietnam, dated 28 November 2013, issued by the National
Assembly of Vietnam
Assembly of Vietnam
4
Political structure
Vietnam is a socialist country operating under the single-party leadership

5
Hierarchy of regulations
The Law on Promulgation of Legal Instruments organizes law into a hierarchy

of the Communist Party. The legislative power in Vietnam is vested in the where higher-ranking legal instruments set out general rules and the lower-
National Assembly of Vietnam. The implementation and administration of ranking legal instruments provide clarification and additional details.
National Assembly legislation is delegated to 63 municipal and provincial
bodies based on geographical location. The President of Vietnam is the head
of the State, and the Prime Minister of Vietnam is the head of the Central Hierarchy of regulations in Vietnam
Government. The Central Government is assisted by various ministries in
charge of specific sectors in the management of the country.
CONSTITUTION
Political structure in Vietnam

LAWS
National Assembly Passed by the National Assembly
ORDINANCES & RESOLUTIONS

Central
Government Issued by the Standing Committee
Government Ministries
ORDERS & DECISIONS

Departments Provincial People’s Provincial People’s Issued by the President
Committee (63) Council (63)
Local
Government DECREES
Districts People’s Districts People’s Issued by the Government
Divisions
Committee Council
DECISIONS
Issued by the Prime Minister on the implementation of regulations
Commune People’s Commune People’s
Committee Council (*)
CIRCULARS & JOINT CIRCULARS
Issued by Ministries or equivalent providing guidance of decrees
(*) Piloting the urban administration model in Hanoi to remove the commune level according
to Resolution No.97/2019/QH14
Source: Law on Promulgation of Legal Instruments No. 80/2015/QH13, dated 22 June 2015, issued by the National
Source: The Constitution of the Socialist Republic of Vietnam, dated 28 November 2013, issued by the National
Assembly of Vietnam
Assembly of Vietnam
6
Recent law changes to attract
investment and increase transparency
The Vietnamese legal system is frequently amended to adapt to the rapid
6.1
Law on
Investment 2020
The new Law on Investment No. 61/2020/QH14 (LOI 2020) was released on
changes in the market and economy. In 2020, many regulations were issued. 17 June 2020 and took effect from 1 January 2021. It contains important
We highlight some significant new regulations which are relevant and may changes to create a more attractive legal framework for foreign investors.
benefit foreign investors in Vietnam.
Clearer rules on market access 1
The LOI 2020 introduces clearer rules on market access, taking into account
various commitments in international treaties to which Vietnam is a signatory,
and restrictions in local regulations.
Business sectors that foreign investors can access the market
Sectors which are not

yet accessible for foreign
Foreign investor is not
investors (List A of
allowed
Appendix I of Decree
31/2021/ND-CP).
Sectors which are Foreign investor is Market-access conditions:

accessible with conditions allowed with market- • Foreign-owned ratio
for foreign investors (List • Form of investment
access conditions
• Scope of investment
B of Appendix I of Decree
• Investor capability
31/2021/ND-CP). • Others
Foreign investors have the

same market access as
included in List A or List B
that of domestic investors
Source: Article 17, Decree No. 31/2021/ND-CP, dated 26 March 2021, issued by the Government
1 Article 9 of the LOI 2020
6
Recent law changes to attract
investment and increase transparency
The Vietnamese legal system is frequently amended to adapt to the rapid
6.1
Law on
Investment 2020
The new Law on Investment No. 61/2020/QH14 (LOI 2020) was released on
changes in the market and economy. In 2020, many regulations were issued. 17 June 2020 and took effect from 1 January 2021. It contains important
We highlight some significant new regulations which are relevant and may changes to create a more attractive legal framework for foreign investors.
benefit foreign investors in Vietnam.
Clearer rules on market access 1
The LOI 2020 introduces clearer rules on market access, taking into account
various commitments in international treaties to which Vietnam is a signatory,
and restrictions in local regulations.
Business sectors that foreign investors can access the market

yet accessible for foreign
Foreign investor is not
investors (List A of
allowed
Appendix I of Decree
31/2021/ND-CP).
Sectors which are Foreign investor is Market-access conditions:

accessible with conditions allowed with market- • Foreign-owned ratio
for foreign investors (List • Form of investment
access conditions
• Scope of investment
B of Appendix I of Decree
• Investor capability
31/2021/ND-CP). • Others
Foreign investors have the

same market access as
included in List A or List B
that of domestic investors
Source: Article 17, Decree No. 31/2021/ND-CP, dated 26 March 2021, issued by the Government
1 Article 9 of the LOI 2020
Simpler licensing procedures for large scale Detailed special investment incentives and support
investment projects Special incentives and investment support Subject or Conditions
Under the previous LOI 2014, any investment project with a total investment ▶ CIT rate of 9% for 30 years ▶ Subject A
capital of VND5,000 billion (equiv. USD215 million1) and above was subject to ▶ CIT exemption for five years and 50%
in-principle approval of the Prime Minister. However, under the LOI 2020, the reduction for 10 subsequent years
Prime Minister’s approval is no longer required for such investment projects. ▶ Land rental, water surface rental
This change reduces the administrative procedures for large scale investors. exemption for 18 years and 55%
reduction for the remaining years
New special incentives and investment support ▶ CIT rate of 7% for 33 years ▶ Subject B
The LOI 2020 and Decision 29/2021/QD-TTg prescribing special investment ▶ CIT exemption for six years and 50% Or
incentives dated 6 October 2021, issued by the Prime Minister, introduced a reduction for 12 subsequent years ▶ Subject A which meets one of the
mechanism which allows the Government’s approval for special investment
▶ Land rental, water surface rental following conditions:
exemption for 20 years and 65% ▶ High technology project level 1
incentives at different levels to encourage the development of several reduction for the remaining years ▶ Participation of Vietnamese suppliers
investment projects that have significant socio-economic impact, including:
and service providers level 1
Subject: ▶ Technology transfer level 1
▶ Value added accounting for more
▶ ►A - Investment projects in sectors subject to special investment incentives than 30% to 40% of the total
which have investment capital of VND30,000 billion (equiv. USD1.3 billion) production costs of finished products
or above and disburse at least VND10,000 billion (equiv. USD430 million)
within three years from the date of the Investment Registration Certificate ▶ C
► IT rate of 5% for 37 years ▶ Subject C
(IRC) issuance or in-principle approval ▶ CIT exemption for six years and 50% Or
reduction for 13 subsequent years ▶ Subject A which meets one of the
▶ B
► - New investment projects (including the expansion of such new projects) ▶ Land rental, water surface rental following conditions:
establishing innovation centers and research and development centers which exemption for 22 years and 75% ▶ High technology project level 2
have total investment capital of VND3,000 billion (equiv. USD130 million) reduction for the remaining years ▶ Participation of Vietnamese suppliers
or above and will disburse at least VND1,000 billion (equiv. USD43 million) and service providers level 2
within three years from the date of IRC issuance or in-principle approval ▶ Technology transfer level 2
▶ ►C - National Innovation Center established under a decision of the Prime
than 40% of the total production
Minister costs of finished products
Non-subject:
▶ ►Investment projects that have been granted investment certificate, IRC,
or in-principle approval prior to the effective date of the LOI 2020. In which:
▶ ►Investment projects in following sectors:
▶ L
► evel of high technology project is defined based on level of high-tech
product revenue, R&D expenses and personnel.
▶ Mineral mining projects
▶ Projects on manufacturing, sale of goods and services subject to special ▶ Level
► of participation of Vietnamese suppliers and service providers in
excise tax according to the Law on Special Sales Tax No. 27/2008/ the supply chain is defined based on level of Vietnamese enterprises
QH12, except for projects on manufacturing of automobiles, aircrafts, participating and their value contributed into the supply chain.
and yachts ▶ ►Level of technology transfer is defined based on number of Vietnamese
▶ Commercial housing construction projects prescribed by the Law on enterprises received the technology transfer.
Residential Housing No. 65/2014/QH13
1 Roughly converted and rounded for readers’ reference only. Vietcombank’s exchange rate on 10 October
2021: USD1 = VND22.860
Simpler licensing procedures for large scale Detailed special investment incentives and support
investment projects Special incentives and investment support Subject or Conditions
Under the previous LOI 2014, any investment project with a total investment ▶ CIT rate of 9% for 30 years ▶ Subject A
capital of VND5,000 billion (equiv. USD215 million1) and above was subject to ▶ CIT exemption for five years and 50%
in-principle approval of the Prime Minister. However, under the LOI 2020, the reduction for 10 subsequent years
Prime Minister’s approval is no longer required for such investment projects. ▶ Land rental, water surface rental
This change reduces the administrative procedures for large scale investors. exemption for 18 years and 55%
reduction for the remaining years
New special incentives and investment support ▶ CIT rate of 7% for 33 years ▶ Subject B
The LOI 2020 and Decision 29/2021/QD-TTg prescribing special investment ▶ CIT exemption for six years and 50% Or
incentives dated 6 October 2021, issued by the Prime Minister, introduced a reduction for 12 subsequent years ▶ Subject A which meets one of the
mechanism which allows the Government’s approval for special investment
▶ Land rental, water surface rental following conditions:
exemption for 20 years and 65% ▶ High technology project level 1
incentives at different levels to encourage the development of several reduction for the remaining years ▶ Participation of Vietnamese suppliers
investment projects that have significant socio-economic impact, including:
and service providers level 1
Subject: ▶ Technology transfer level 1
▶ ►A - Investment projects in sectors subject to special investment incentives than 30% to 40% of the total
which have investment capital of VND30,000 billion (equiv. USD1.3 billion) production costs of finished products
or above and disburse at least VND10,000 billion (equiv. USD430 million)
within three years from the date of the Investment Registration Certificate ▶ C
► IT rate of 5% for 37 years ▶ Subject C
(IRC) issuance or in-principle approval ▶ CIT exemption for six years and 50% Or
reduction for 13 subsequent years ▶ Subject A which meets one of the
▶ B
► - New investment projects (including the expansion of such new projects) ▶ Land rental, water surface rental following conditions:
establishing innovation centers and research and development centers which exemption for 22 years and 75% ▶ High technology project level 2
have total investment capital of VND3,000 billion (equiv. USD130 million) reduction for the remaining years ▶ Participation of Vietnamese suppliers
or above and will disburse at least VND1,000 billion (equiv. USD43 million) and service providers level 2
within three years from the date of IRC issuance or in-principle approval ▶ Technology transfer level 2
▶ ►C - National Innovation Center established under a decision of the Prime
than 40% of the total production
Minister costs of finished products
Non-subject:
▶ ►Investment projects that have been granted investment certificate, IRC,
or in-principle approval prior to the effective date of the LOI 2020. In which:
▶ ►Investment projects in following sectors:
▶ Level
► of high technology project is defined based on level of high-tech
product revenue, R&D expenses and personnel.
▶ Mineral mining projects
▶ Projects on manufacturing, sale of goods and services subject to special ▶ Level
► of participation of Vietnamese suppliers and service providers in
excise tax according to the Law on Special Sales Tax No. 27/2008/ the supply chain is defined based on level of Vietnamese enterprises
QH12, except for projects on manufacturing of automobiles, aircrafts, participating and their value contributed into the supply chain.
and yachts ▶ ►Level of technology transfer is defined based on number of Vietnamese
▶ Commercial housing construction projects prescribed by the Law on enterprises received the technology transfer.
Residential Housing No. 65/2014/QH13
1 Roughly converted and rounded for readers’ reference only. Vietcombank’s exchange rate on 10 October
2021: USD1 = VND22.860
Facilitating the restructure and M&A activity 1 ordinary shares of an enterprise to request a General Meeting of Shareholders.
The minority of shareholders may also request an inspection committee to
The LOI 2020 allows investors to: investigate issues relating to the management and administration of the
company. Furthermore, to exercise these rights, such shareholders are no longer
▶ Amend the objectives, scale and contents of their investment projects
required to hold their shares for a period of at least six consecutive months.
▶ Merge, separate of their investment projects
▶ Change investors Changes in the management structure of limited
▶ Partly or wholly transfer investment projects liability companies
Under the LOE 2020, a Limited Liability Company (LLC) is no longer required
These new regulations create a clearer legal framework to facilitate M&A deals.
to have an inspection committee (in respect of a multi-member LLC) or an
6.2
inspector (in respect of a single-member LLC). An inspection committee (or
inspector) is now only required in respect of an LLC that is a State Owned
Law on
6.3
Enterprise (SOE) or its subsidiary.
Enterprise 2020 Law on Tax

Administration
The new Law on Enterprise No. 59/2020/QH14 (LOE 2020) which was released
on 17 June 2020 and took effect from 1 January 2021 reduces the compliance
burden for investors.
In recent years, the Ministry of Finance (MOF) and the General Department of
Taxation have made efforts to reform and simplify tax administration policies
Company seal and procedures.
Unlike the previous rules, the new regulation does not require the specific
From 1 July 2020, most elements of the new Law on Tax Administration
compulsory contents for the seal or registration obligation. The company shall
No. 38/2019/QH14 came into force (except for regulations on electronic
decide on the type, quantity, form and content of the seal of the company,
documents and invoices of this law which will come into force from 1 July
its branches, representative offices and other units. The management and
2022). The new law brings some additional changes that are considered
keeping of the seal shall comply with the provisions of the company’s charter or business friendly.
regulations promulgated by the company.
1 Conflict can be avoided, according to the new law, since no
Simplified administrative procedures administrative penalty and late tax payment is imposed if taxpayers
complied with local tax authorities’ guidance which led to a deficit of tax
Under previous laws, in theory, any change in business registration information
liability or a surplus tax refund.
of an enterprise must be registered with the licensing authority. However, under
the LOE 2020, there is no requirement to notify on changes to enterprise’s 2 There will be more time for individual taxpayers to comply with their
management position (i.e. members of the Board of Managers, members of the obligations since the deadline of Personal Income Tax Finalization is
Inspection Committee or Inspectors) and on private placement of joint stock extended by one month to the last day of the fourth month after the
companies. calendar year end.
3 The old law regulated but did not have specific guidance on the use of
Minority shareholder protection electronic invoices and electronic documents. The new law provides
detailed guidance on the usage of electronic invoices. Under the new law
The LOE 2020 increases the protections of minority shareholders by allowing a electronic invoices will be mandatory for most enterprises and the use
shareholder, or group of shareholders, owning just 5% (previously 10%) of the total of electronic documents will be promoted. Using electronic invoices and
1 Article 41 of the LOI 2020 electronic documents should be less time-consuming and more accurate.
Facilitating the restructure and M&A activity 1 ordinary shares of an enterprise to request a General Meeting of Shareholders.
The minority of shareholders may also request an inspection committee to
The LOI 2020 allows investors to: investigate issues relating to the management and administration of the
company. Furthermore, to exercise these rights, such shareholders are no longer
▶ Amend the objectives, scale and contents of their investment projects
required to hold their shares for a period of at least six consecutive months.
▶ Merge, separate of their investment projects
▶ Change investors Changes in the management structure of limited
▶ Partly or wholly transfer investment projects liability companies
Under the LOE 2020, a Limited Liability Company (LLC) is no longer required
These new regulations create a clearer legal framework to facilitate M&A deals.
to have an inspection committee (in respect of a multi-member LLC) or an
6.2
inspector (in respect of a single-member LLC). An inspection committee (or
inspector) is now only required in respect of an LLC that is a State Owned
Law on
6.3
Enterprise (SOE) or its subsidiary.
Enterprise 2020 Law on Tax

Administration
The new Law on Enterprise No. 59/2020/QH14 (LOE 2020) which was released
on 17 June 2020 and took effect from 1 January 2021 reduces the compliance
burden for investors.
In recent years, the Ministry of Finance (MOF) and the General Department of
Taxation have made efforts to reform and simplify tax administration policies
Company seal and procedures.
Unlike the previous rules, the new regulation does not require the specific
From 1 July 2020, most elements of the new Law on Tax Administration
compulsory contents for the seal or registration obligation. The company shall
No. 38/2019/QH14 came into force (except for regulations on electronic
decide on the type, quantity, form and content of the seal of the company,
documents and invoices of this law which will come into force from 1 July
its branches, representative offices and other units. The management and
2022). The new law brings some additional changes that are considered
keeping of the seal shall comply with the provisions of the company’s charter or business friendly.
regulations promulgated by the company.
1 Conflict can be avoided, according to the new law, since no
Simplified administrative procedures administrative penalty and late tax payment is imposed if taxpayers
complied with local tax authorities’ guidance which led to a deficit of tax
Under previous laws, in theory, any change in business registration information
liability or a surplus tax refund.
of an enterprise must be registered with the licensing authority. However, under
the LOE 2020, there is no requirement to notify on changes to enterprise’s 2 There will be more time for individual taxpayers to comply with their
management position (i.e. members of the Board of Managers, members of the obligations since the deadline of Personal Income Tax Finalization is
Inspection Committee or Inspectors) and on private placement of joint stock extended by one month to the last day of the fourth month after the
companies. calendar year end.
3 The old law regulated but did not have specific guidance on the use of
Minority shareholder protection electronic invoices and electronic documents. The new law provides
detailed guidance on the usage of electronic invoices. Under the new law
The LOE 2020 increases the protections of minority shareholders by allowing a electronic invoices will be mandatory for most enterprises and the use
shareholder, or group of shareholders, owning just 5% (previously 10%) of the total of electronic documents will be promoted. Using electronic invoices and
1 Article 41 of the LOI 2020 electronic documents should be less time-consuming and more accurate.
7
Changes before and after the latest Law on Tax Administration coming
into force
1
Equitization
The Vietnamese Government has expanded the private investment regime

into a large number of SOEs. During the period of 2016 to 2020, there has
Before ▶ After ▶ Impact No administrative or late been a focus on increasing the value of equitization instead of increasing
tax payment penalty is the number.
NOT Regulated Regulated Avoid conflict imposed where a taxpayer
takes a position that
complies with the Tax Number of equitized SOEs in the period of 2011 to 2020
Authorities’ guidance
2
14 26 73 175 220 55 69 32 96
Extending the deadline Before ▶ After ▶ Impact

of PIT finalization for
individuals 90 days after Last day of the More time for
y
ỷ ear-end (*) fourth month taxpayers to
after year-end comply
(*)
(*) calendar year
3
2011 2012 2013 2014 2015 2016 2017 2018 2019-2020
Source: Page 38, “Kinh te Nha nuoc: Danh gia ket qua thuc hien giai doan 2011-2020 va De xuat phuong huong giai phap
cho giai doan 2021-2030”, Central Institute for Economic Management of Vietnam
Under the LOE 2020, an enterprise in which the State holds more than 50%
Before ▶ After ▶ Impact Making electronic of the charter capital or voting shares shall be regarded as an SOE. In the
invoices compulsory for previous law, an SOE means an enterprise of which 100% charter capital is
Regulated but Focused Increase most organizations and held by the State.
not focused with detailed accuracy, less promoting the usage of
guidance time consuming
electronic documents
Source: Clause 16, Article 16, Article 44, 89, 153, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019,
issued by the National Assembly of Vietnam
7
Changes before and after the latest Law on Tax Administration coming
into force
1
Equitization
The Vietnamese Government has expanded the private investment regime

into a large number of SOEs. During the period of 2016 to 2020, there has
Before ▶ After ▶ Impact No administrative or late been a focus on increasing the value of equitization instead of increasing
tax payment penalty is the number.
NOT Regulated Regulated Avoid conflict imposed where a taxpayer
takes a position that
complies with the Tax Number of equitized SOEs in the period of 2011 to 2020
Authorities’ guidance
2
14 26 73 175 220 55 69 32 96
Extending the deadline Before ▶ After ▶ Impact

of PIT finalization for
individuals 90 days after Last day of the More time for
y
ỷ ear-end (*) fourth month taxpayers to
after year-end comply
(*)
(*) calendar year
3
2011 2012 2013 2014 2015 2016 2017 2018 2019-2020
Source: Page 38, “Kinh te Nha nuoc: Danh gia ket qua thuc hien giai doan 2011-2020 va De xuat phuong huong giai phap
cho giai doan 2021-2030”, Central Institute for Economic Management of Vietnam
Under the LOE 2020, an enterprise in which the State holds more than 50%
Before ▶ After ▶ Impact Making electronic of the charter capital or voting shares shall be regarded as an SOE. In the
invoices compulsory for previous law, an SOE means an enterprise of which 100% charter capital is
Regulated but Focused Increase most organizations and held by the State.
not focused with detailed accuracy, less promoting the usage of
guidance time consuming
electronic documents
Source: Clause 16, Article 16, Article 44, 89, 153, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019,
Investment
protection and
1Investment
protection 1
Investment
Under the LOI 2020, the Government ▶ Entitle to new incentives if
provides the following investment more favorable
protection to foreign investors:
Keep current incentives if less
incentives
▶
favorable than before

Investment protection to
foreign investors ▶ If the investor is no longer
entitled to incentives
for national defense and
security reasons, relevant
▶ No appropriation or confiscation compensation may be applied
▶ To be compensated in case
the confiscation for national
defense, security or national
interests owned as
gally set
Le s
Bus
Cha
iness activitie
No priority to domestic
nges of laws
▶
Investment
goods, services or vendors
protection
▶ No restriction on export ratio
quantity, value, types of
goods, services
s
▶ Self-balance of import- Tra as
nsf rse
export, import substitution, er assets to ove
R&D ratio
▶ Self-decide the headquarter
location or location to
provide goods/service ▶ Investment capital and liquidation
▶ Income from business activities
▶ Lawful money and other assets
1 Articles 10, 11, 12, 13 of the LOI 2020
Investment
protection and
1Investment
protection 1
Investment
Under the LOI 2020, the Government ▶ Entitle to new incentives if
provides the following investment more favorable
protection to foreign investors:
Keep current incentives if less
incentives
▶
favorable than before

Investment protection to
foreign investors ▶ If the investor is no longer
entitled to incentives
for national defense and
security reasons, relevant
▶ No appropriation or confiscation compensation may be applied
▶ To be compensated in case
the confiscation for national
defense, security or national
interests owned as
gally set
Le s
Bus
Cha
iness activitie
No priority to domestic
nges of laws
▶
Investment
goods, services or vendors
protection
▶ No restriction on export ratio
quantity, value, types of
goods, services
s
▶ Self-balance of import- Tra as
nsf rse
export, import substitution, er assets to ove
R&D ratio
▶ Self-decide the headquarter
location or location to
provide goods/service ▶ Investment capital and liquidation
▶ Income from business activities
▶ Lawful money and other assets
1 Articles 10, 11, 12, 13 of the LOI 2020
2
Types of investment
incentive and support 1
The LOI 2020 provides the following forms of investment incentives and
2.2
Forms of investment
support
Development of technical and social infrastructure inside and
government support: 1 outside the investment project
2.1
2 Training and development of human resources
Forms of investment 3 Credit supports

incentive Access to business premises and business relocation under decisions
4 of regulatory agencies
Investment incentives 5 Science, technology and technology transfer
6 Market development and information provision
Import duties Accelerated CIT incentives: Exemption and

exemption depreciation, preferential tax reduction of 7 R&D
increasing the rate and tax land levy and
deductible holiday rental Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly of Vietnam
expenses when
calculating
taxable income
1 Articles 15, 18 of the LOI 2020
2
Types of investment
incentive and support 1
The LOI 2020 provides the following forms of investment incentives and
2.2
Forms of investment
support
Development of technical and social infrastructure inside and
government support: 1 outside the investment project
2.1
2 Training and development of human resources
Forms of investment 3 Credit supports

incentive Access to business premises and business relocation under decisions
4 of regulatory agencies
Investment incentives 5 Science, technology and technology transfer
6 Market development and information provision
Import duties Accelerated CIT incentives: Exemption and

exemption depreciation, preferential tax reduction of 7 R&D
increasing the rate and tax land levy and
deductible holiday rental Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly of Vietnam
expenses when
calculating
taxable income
1 Articles 15, 18 of the LOI 2020
2.3
Projects eligible for
Investment projects in encouraged sectors regulated in Clause 1

2.4
Investment incentives and
support in IZs and EZs
Investment
1 Article 16 of the LOI 2020. incentives Industrial Zones (IZs) Economic Zones (EZs)
and support
Investment projects located in encouraged areas regulated in Clause 2 CIT Tax exemption for two years and 50% CIT incentive rate of 10% in 15 years.
2 Article 16 of the LOI 2020.
tax deduction for four following years. Tax exemption for 04 years and 50% tax
deduction for 09 following years (excluding
income from real estate transfer).
Big investment with total investment capital from VND6,000 billion
3 with detailed conditions on disbursement schedule, revenue or labor. Import Exported goods from Export Processing Investment projects located in coastal
duty Zone (EPZ), imported goods to EPZ for EZs are free of import duty for imported
processing exported goods are not subject goods to create fixed assets and free
Social housing construction projects; investment projects located in to customs duty. of import duty for importing materials
4 rural areas and employing at least 500 employees; investment projects Investment projects for IZ infrastructure and components not yet produced
development and those located in IZ are domestically for manufacturing in five
that employ persons with disabilities in accordance with regulations of years from the operation date.
free of import duty for imported goods to
law on persons with disabilities. create fixed assets.
Investment projects for IZ infrastructure
development are free of import duty for
Hi-technology enterprises, science and technology enterprises and
5 importing materials and components not yet
science and technology organizations, projects involving transfer produced domestically for manufacturing in
of technologies on the List of technologies the transfer of which is five years from the operation date.
encouraged in accordance with regulations of the Law on Technology
Transfer No. 07/2017/QH14; technology incubators, science and Land Investment projects for IZ infrastructure Investment projects located in EZs are
development and operation are free free of land rental at different levels
technology enterprise incubators prescribed by the Law on High of land rental at different levels from from 11 years to the whole rental term
Technology No. 21/2008/QH12, and the Law on Science and 11 years to the whole rental term depending on specific conditions.
depending on specific conditions.
Technology No. 29/2013/QH13, enterprises manufacturing and
providing technologies, equipment, products and services with a view
Credit Investment projects for IZ infrastructure EZs are allowed to employ other capital
to satisfaction of environment protection requirements prescribed by development are entitled to investment mobilization methods for construction of
the Law on Environmental Protection No. 55/2014/QH13. loans in accordance with the Decree important socio-technical infrastructure,
32/2017/ND-CP. namely bond issue, Official Development
Assistance (ODA), preferential credit,
Innovation start-up projects, national innovation centers and research
6 and development centers.
Public-Private Partnership (PPP) fund,
advance from investors, etc.
Construc- Construction of some key facilities in IZs Construction of some key facilities in EZs
Business investment in small and medium-sized enterprises’ product
7 distribution chain; business investment in technical establishments tion are supported by the State budget. are supported by the State budget.
Expenses for construction, operation, Expenses for construction, operation,
supporting small and medium-sized enterprises, small and medium- rental of dormitories and other social rental of dormitories and other social
infrastructure work for workers in EZs are
sized enterprise incubators; business investment in co-working spaces infrastructure work for workers in IZs are
deductible for CIT calculation.
serving small and medium-sized enterprises and innovation startups Investment projects for construction of
Investment projects for construction of
prescribed by the Law on Small and Medium-Sized Enterprises. housing and other facilities for workers are housing and other facilities for workers are
entitled to regulated incentives for social entitled to regulated incentives for social
Source: Clause 2, Article 15, Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly housing construction and related fields.
of Vietnam
housing construction and related fields.
2.3
Projects eligible for
Investment projects in encouraged sectors regulated in Clause 1

2.4
Investment incentives and
support in IZs and EZs
Investment
1 Article 16 of the LOI 2020. incentives Industrial Zones (IZs) Economic Zones (EZs)
and support
Investment projects located in encouraged areas regulated in Clause 2 CIT Tax exemption for two years and 50% CIT incentive rate of 10% in 15 years.
2 Article 16 of the LOI 2020.
tax deduction for four following years. Tax exemption for 04 years and 50% tax
deduction for 09 following years (excluding
income from real estate transfer).
Big investment with total investment capital from VND6,000 billion
3 with detailed conditions on disbursement schedule, revenue or labor. Import Exported goods from Export Processing Investment projects located in coastal
duty Zone (EPZ), imported goods to EPZ for EZs are free of import duty for imported
processing exported goods are not subject goods to create fixed assets and free
Social housing construction projects; investment projects located in to customs duty. of import duty for importing materials
4 rural areas and employing at least 500 employees; investment projects Investment projects for IZ infrastructure and components not yet produced
development and those located in IZ are domestically for manufacturing in five
that employ persons with disabilities in accordance with regulations of years from the operation date.
free of import duty for imported goods to
law on persons with disabilities. create fixed assets.
Investment projects for IZ infrastructure
development are free of import duty for
Hi-technology enterprises, science and technology enterprises and
5 importing materials and components not yet
science and technology organizations, projects involving transfer produced domestically for manufacturing in
of technologies on the List of technologies the transfer of which is five years from the operation date.
encouraged in accordance with regulations of the Law on Technology
Transfer No. 07/2017/QH14; technology incubators, science and Land Investment projects for IZ infrastructure Investment projects located in EZs are
development and operation are free free of land rental at different levels
technology enterprise incubators prescribed by the Law on High of land rental at different levels from from 11 years to the whole rental term
Technology No. 21/2008/QH12, and the Law on Science and 11 years to the whole rental term depending on specific conditions.
depending on specific conditions.
Technology No. 29/2013/QH13, enterprises manufacturing and
providing technologies, equipment, products and services with a view
Credit Investment projects for IZ infrastructure EZs are allowed to employ other capital
to satisfaction of environment protection requirements prescribed by development are entitled to investment mobilization methods for construction of
the Law on Environmental Protection No. 55/2014/QH13. loans in accordance with the Decree important socio-technical infrastructure,
32/2017/ND-CP. namely bond issue, Official Development
Assistance (ODA), preferential credit,
Innovation start-up projects, national innovation centers and research
6 and development centers.
Public-Private Partnership (PPP) fund,
advance from investors, etc.
Construc- Construction of some key facilities in IZs Construction of some key facilities in EZs
Business investment in small and medium-sized enterprises’ product
7 distribution chain; business investment in technical establishments tion are supported by the State budget. are supported by the State budget.
Expenses for construction, operation, Expenses for construction, operation,
supporting small and medium-sized enterprises, small and medium- rental of dormitories and other social rental of dormitories and other social
infrastructure work for workers in EZs are
sized enterprise incubators; business investment in co-working spaces infrastructure work for workers in IZs are
serving small and medium-sized enterprises and innovation startups Investment projects for construction of
Investment projects for construction of
prescribed by the Law on Small and Medium-Sized Enterprises. housing and other facilities for workers are housing and other facilities for workers are
entitled to regulated incentives for social entitled to regulated incentives for social
Source: Clause 2, Article 15, Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly housing construction and related fields.
of Vietnam
housing construction and related fields.
1
Forms of Forms of foreign direct
business investment
A foreign investor may invest in Vietnam in the

following forms:
Establishment of a business entity
Capital contribution or purchase of shares/

stakes
Execution of an investment project
Business cooperation contract
Other forms as prescribed by the Government
Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by

the National Assembly of Vietnam
30 31
1
Forms of Forms of foreign direct
business investment
A foreign investor may invest in Vietnam in the

following forms:
Establishment of a business entity
Capital contribution or purchase of shares/

stakes
Execution of an investment project
Business cooperation contract
Other forms as prescribed by the Government
Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by

the National Assembly of Vietnam
30 31
2
Forms of enterprise
Forms of enterprise in Vietnam

3
Setting up an investment project
and a company in Vietnam
Foreign investors can set up a business in Vietnam by way of setting up

an investment project and a business organization to manage the project.
Establishment Ownership Liability Investment in conditional sector activities is subject to in-principle approval of
higher-level competent authorities (nuclear power plant, special-use forests,
Limited Established by its Either legal entities For a LLC with two or more headwater protection forests or border protection forests; construction of
Liability members by way of or individuals. members: The members airports, terminals; petroleum processing; betting and casino for foreigners;
Company capital contribution Maximum number are liable for the debts and golf courses; etc.). The process in conditional sectors takes more time and
to the LLC. must not exceed 50. other liabilities of the entity
involves specialized competent authorities.
There are two forms to the extent of their capital
of LLC: LLC with one contributions, except for the
member and LLC case specified in Clause 4
with two or more Article 47 of the LOE 2020.
members. For a one member LLC with
two or more members: The
company owner is liable
for the debts and other
liabilities to the extent of the
company’s charter capital.
Joint Stock Established by Required to have The shareholders are only

Company its founding at least three liable for the debts and other
shareholders on shareholders. liabilities of the entity to
the basis of their No maximum the extent of their capital
subscription to shares number of contributions.
of the Joint Stock shareholders.
Company (JSC).
Partnerships Established by Required to have at General partner is liable for

general partners. least two general the company’s obligations
A partnership may partners who must equal to all of his/her assets.
include limited be individuals. Limited partner is liable for
partners. the company’s debts equal
to the promised capital
contribution.
Private Established by a Owned by a single Owner is liable for the

Enterprise single individual. individual. entire operation of the
company equal to his/her
total assets.
Source: Law on Enterprise No. 59/2020/QH14, dated 17 June 2020, issued by the National Assembly of Vietnam
2
Forms of enterprise
Forms of enterprise in Vietnam

3
Setting up an investment project
and a company in Vietnam
Foreign investors can set up a business in Vietnam by way of setting up

an investment project and a business organization to manage the project.
Establishment Ownership Liability Investment in conditional sector activities is subject to in-principle approval of
higher-level competent authorities (nuclear power plant, special-use forests,
Limited Established by its Either legal entities For a LLC with two or more headwater protection forests or border protection forests; construction of
Liability members by way of or individuals. members: The members airports, terminals; petroleum processing; betting and casino for foreigners;
Company capital contribution Maximum number are liable for the debts and golf courses; etc.). The process in conditional sectors takes more time and
to the LLC. must not exceed 50. other liabilities of the entity
involves specialized competent authorities.
There are two forms to the extent of their capital
of LLC: LLC with one contributions, except for the
member and LLC case specified in Clause 4
with two or more Article 47 of the LOE 2020.
members. For a one member LLC with
two or more members: The
company owner is liable
for the debts and other
liabilities to the extent of the
company’s charter capital.
Joint Stock Established by Required to have The shareholders are only

Company its founding at least three liable for the debts and other
shareholders on shareholders. liabilities of the entity to
the basis of their No maximum the extent of their capital
subscription to shares number of contributions.
of the Joint Stock shareholders.
Company (JSC).
Partnerships Established by Required to have at General partner is liable for

general partners. least two general the company’s obligations
A partnership may partners who must equal to all of his/her assets.
include limited be individuals. Limited partner is liable for
partners. the company’s debts equal
to the promised capital
contribution.
Private Established by a Owned by a single Owner is liable for the

Enterprise single individual. individual. entire operation of the
company equal to his/her
total assets.
Procedures and timeline of registration process
Projects not subjected to in-principle approval

Procedures and timeline of setting up company
Projects inside Zones
EZs, IZs, EPZs, Submitted to
Management 15
high-tech zones da
Board ys Application
(Zones) Online Provincial Three
IRC dossiser for submission Business working days ERC
setting up
issued company,
Registration
Office
issued
including IRC
Projects outside Submitted to Provincial ys
EZs, IZs, EPZs, da
DPI 15
high-tech zones
Source: LOI 2020
Procedures and timeline of approving in principle
Projects subjected to in-principle approval
National Ministry of State Appraisal

Established Council Submit Submit National
Assembly’s Planning & Government
approval Investment 15 days (established by 90 days 60 days prior Assembly
Prime Minister) to a National
Assembly’s
session Resolution on
in-principle
Prime Ministry of Appraised approval
Prime
Minister’s Planning &
40 days Minister
approval Investment
Provincial DPI/Zones
In-principle approval
Management Board
Provincial Provincial Provincial
DPI or Zones Appraised
Authority’s People’s
Management 25 days
approval Committee
Board 5 days
Projects at Zones In-principle approval

EZs, IZs, EPZs, Management
25 days
IRC issued
high-tech zones Board
Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly of Vietnam
Procedures and timeline of registration process
Projects not subjected to in-principle approval

Procedures and timeline of setting up company
Projects inside Zones
EZs, IZs, EPZs, Submitted to
Management 15
high-tech zones da
Board ys Application
(Zones) Online Provincial Three
IRC dossiser for submission Business working days ERC
setting up
issued company,
Registration
Office
issued
including IRC
Projects outside Submitted to Provincial ys
EZs, IZs, EPZs, da
DPI 15
high-tech zones
Source: LOI 2020
Procedures and timeline of approving in principle
Projects subjected to in-principle approval
National Ministry of State Appraisal

Established Council Submit Submit National
Assembly’s Planning & Government
approval Investment 15 days (established by 90 days 60 days prior Assembly
Prime Minister) to a National
Assembly’s
session Resolution on
in-principle
Prime Ministry of Appraised approval
Prime
Minister’s Planning &
40 days Minister
approval Investment
Provincial DPI/Zones
In-principle approval
Management Board
Provincial Provincial Provincial
DPI or Zones Appraised
Authority’s People’s
Management 25 days
approval Committee
Board 5 days
Projects at Zones In-principle approval

EZs, IZs, EPZs, Management
25 days
IRC issued
high-tech zones Board
Source: Law on Investment No. 61/2020/QH14, dated 17 June 2020, issued by the National Assembly of Vietnam
Development
of intellectual
property
Being a member of the WTO, Vietnam must follow
the WTO’s requirements on IP. Also, Vietnam’s
participation in both the EVFTA and the CPTPP
Agreement requires Vietnam to meet high
standards of IP rights protection. Vietnam has an
IP strategy up to 2030 which is designed to further
enhance a comprehensive and effective IP system
in all phases of creating, establishing, exploiting
and protecting IP rights. It is targeted that by 2030,
Viet Nam will belong to the group of leading ASEAN
countries in terms of creation, protection and
exploitation of IP rights.
According to the current Law on Intellectual
Property, the three major IP rights protected in
Vietnam are: copyright and related rights; industrial
property rights; and plant breeder’s rights.
36 DDooi n
i ngg Bu
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i ness
ess I n
I n Vi
Viet
etnnaamm 22002211 37
Development
of intellectual
property
Being a member of the WTO, Vietnam must follow
the WTO’s requirements on IP. Also, Vietnam’s
participation in both the EVFTA and the CPTPP
Agreement requires Vietnam to meet high
standards of IP rights protection. Vietnam has an
IP strategy up to 2030 which is designed to further
enhance a comprehensive and effective IP system
in all phases of creating, establishing, exploiting
and protecting IP rights. It is targeted that by 2030,
Viet Nam will belong to the group of leading ASEAN
countries in terms of creation, protection and
exploitation of IP rights.
According to the current Law on Intellectual
Property, the three major IP rights protected in
Vietnam are: copyright and related rights; industrial
property rights; and plant breeder’s rights.
36 DDooi n
i ngg Bu
Bussi n
i ness
ess I n
I n Vi
Viet
etnnaamm 22002211 37
Land and 1 Land
housing
The Law on Land No. 45/2013/QH13, effective from 1 July 2014 regulates
the forms of land use for FIE, such as:
Forms of land use Financial obligations in relation to land use right
▶ Land allocated from the State ▶ For granting land use right certificate: Land
▶ Land leased from the State or use fee, land use right registration fee,
real estate developers evaluation fee for the issuance of land use right
certificate, license fee, land compensation fee
(where applicable)
▶ During operation: Land lease fee, Non-
agriculture land use fee, agriculture land use
fee, nature resource tax (where applicable)
Source: Law on Land No. 45/2013/QH13, dated 29 November 2013, issued by the National Assembly of Vietnam
Land rental fee exemptions 1
Subject Exemption duration
Projects in encouraged investment sectors 3 years

Projects in difficult socio-economic geographical areas 7 years
Projects in especially difficult socio-economic geographical 11 years
areas of in encouraged investment sectors located in difficult
socio-economic geographical areas
Projects in encouraged investment sectors located in 15 years
especially difficult socio-economic geographical areas
Projects eligible for special investment incentives as prescribed Up to 22 years
in Article 20 of the LOI 2020
Projects in especially encouraged investment sectors located Whole project lifetime
in especially difficult socio-economic geographical areas or
located in high-tech industrial zones
2
1 Each of the above incentive will be subject to specific conditions in accordance with relevant regulations.
Foreign individuals can buy, rent and purchase,
Housing
receive, or inherit commercial housing in Vietnam
which include apartments and separate houses in
housing construction investment projects.
Land and 1 Land
housing
The Law on Land No. 45/2013/QH13, effective from 1 July 2014 regulates
the forms of land use for FIE, such as:
Forms of land use Financial obligations in relation to land use right
▶ Land allocated from the State ▶ For granting land use right certificate: Land
▶ Land leased from the State or use fee, land use right registration fee,
real estate developers evaluation fee for the issuance of land use right
certificate, license fee, land compensation fee
(where applicable)
▶ During operation: Land lease fee, Non-
agriculture land use fee, agriculture land use
fee, nature resource tax (where applicable)
Source: Law on Land No. 45/2013/QH13, dated 29 November 2013, issued by the National Assembly of Vietnam
Land rental fee exemptions 1
Subject Exemption duration
Projects in encouraged investment sectors 3 years

Projects in difficult socio-economic geographical areas 7 years
Projects in especially difficult socio-economic geographical 11 years
areas of in encouraged investment sectors located in difficult
socio-economic geographical areas
Projects in encouraged investment sectors located in 15 years
especially difficult socio-economic geographical areas
Projects eligible for special investment incentives as prescribed Up to 22 years
in Article 20 of the LOI 2020
Projects in especially encouraged investment sectors located Whole project lifetime
in especially difficult socio-economic geographical areas or
located in high-tech industrial zones
2
1 Each of the above incentive will be subject to specific conditions in accordance with relevant regulations.
Foreign individuals can buy, rent and purchase,
Housing
receive, or inherit commercial housing in Vietnam
which include apartments and separate houses in
housing construction investment projects.
Accounting,
1
taxation and
customs Accounting
Vietnamese accounting regulations

The Law on Accounting is the highest accounting regulation in Vietnam.
Further guidance on accounting activities are provided by a system of
decisions, decrees, circulars, official letters and the VAS.
Accounting standards
There are currently 26 VAS issued from 2001 to 2005, which were primarily
based on the IAS and International IFRS prevailing at the time of issuance.
The VAS has not been updated with the current IASs, therefore, some new
accounting standards such as IFRS 9 on Financial Instruments, IFRS 15 on
Revenue, IFRS 16 on Leases, have not been adopted yet. However, Vietnam
has introduced a roadmap to close the gap between VAS and IFRS and it is
expected that voluntary adoption of IFRS can be made by 2022.
Accounting system
The Circular No. 200/2014/TT-BTC, dated 22 December 2014, issued by the
MOF (Circular 200) providing guidance on Vietnamese Accounting System and
the application of accounting standards is commonly used by enterprises in
Vietnam.
Accounting,
1
taxation and
customs Accounting
Vietnamese accounting regulations

The Law on Accounting is the highest accounting regulation in Vietnam.
Further guidance on accounting activities are provided by a system of
decisions, decrees, circulars, official letters and the VAS.
Accounting standards
There are currently 26 VAS issued from 2001 to 2005, which were primarily
based on the IAS and International IFRS prevailing at the time of issuance.
The VAS has not been updated with the current IASs, therefore, some new
accounting standards such as IFRS 9 on Financial Instruments, IFRS 15 on
Revenue, IFRS 16 on Leases, have not been adopted yet. However, Vietnam
has introduced a roadmap to close the gap between VAS and IFRS and it is
expected that voluntary adoption of IFRS can be made by 2022.
Accounting system
The Circular No. 200/2014/TT-BTC, dated 22 December 2014, issued by the
MOF (Circular 200) providing guidance on Vietnamese Accounting System and
the application of accounting standards is commonly used by enterprises in
Vietnam.
Initial accounting set up at newly Accounting records and financial statements
established entities
Accounting records
A new entity is required to notify the tax authority Accounting documents: Accounting vouchers and accounting books can be
on the application of Vietnamese Accounting System stored either as hard documents or electronically. If stored electronically,
including: the accounting vouchers and accounting books only need to be printed
▶ Framework: Vietnamese Accounting System if requested by the competent authorities for the purpose of testing,
inspection, monitoring and auditing.
▶ Language:
► Vietnamese language is required in
accounting records, but this can be combined Retention period: The retention period is:
with a commonly used foreign language. ▶ five years for those documents used for management or operation of the
enterprise
▶ Financial
► year: An accounting period is generally
12 months in duration and the enterprises can
▶ ten years for accounting data, accounting book
select the fiscal year end. This could be either
▶ unlimited time for documents that are important in terms of the economy,
at the end of the calendar year or at the end of national security and defense
each quarter (i.e. 31 March, 30 June and 30 Annual Financial Statements
September).
The basic set of financial statements that must be prepared under VAS and
▶ Currency
► accounting records are generally Circular 200 comprises of the following:
required to be maintained in VND. Entities that ▶ Balance sheet, including a separate schedule for off balance sheet items
receive and pay mainly in a foreign currency can ▶ Income statement
select the foreign currency to be used for their ▶ Cash flow statement
accounting records and financial statements if
they meet all the stipulated requirements.
▶ Notes to the financial statements
An entity is required to appoint a chief accountant The annual financial statements must be approved by the chief accountant
who must satisfy the criteria and conditions and the legal representative and a copy of the financial statements must
stipulated by the Law on Accounting and guiding be submitted to the local authorities within 90 days of the end of the
financial year.
regulations. If a chief accountant cannot be
appointed, the entity can either temporarily appoint For statutory reporting, entities using a currency other than VND as their
a person in-charge of accounting (maximum of 12 accounting currency must convert their financial statements prepared under
months) who meets the criteria and conditions as that currency into VND in accordance with certain regulations.
required by the regulations or outsource the chief Foreign invested entities are required to have their annual financial
accountant position from a competent accounting statements audited. Those entities must appoint an audit firm from a list of
service company. auditors approved and published by the MOF annually.
Initial accounting set up at newly Accounting records and financial statements
established entities
Accounting records
A new entity is required to notify the tax authority Accounting documents: Accounting vouchers and accounting books can be
on the application of Vietnamese Accounting System stored either as hard documents or electronically. If stored electronically,
including: the accounting vouchers and accounting books only need to be printed
▶ Framework: Vietnamese Accounting System if requested by the competent authorities for the purpose of testing,
inspection, monitoring and auditing.
▶ Language:
► Vietnamese language is required in
accounting records, but this can be combined Retention period: The retention period is:
with a commonly used foreign language. ▶ five years for those documents used for management or operation of the
enterprise
▶ Financial
► year: An accounting period is generally
12 months in duration and the enterprises can
▶ ten years for accounting data, accounting book
select the fiscal year end. This could be either
▶ unlimited time for documents that are important in terms of the economy,
at the end of the calendar year or at the end of national security and defense
each quarter (i.e. 31 March, 30 June and 30 Annual Financial Statements
September).
The basic set of financial statements that must be prepared under VAS and
▶ Currency
► accounting records are generally Circular 200 comprises of the following:
required to be maintained in VND. Entities that ▶ Balance sheet, including a separate schedule for off balance sheet items
receive and pay mainly in a foreign currency can ▶ Income statement
select the foreign currency to be used for their ▶ Cash flow statement
accounting records and financial statements if
they meet all the stipulated requirements.
▶ Notes to the financial statements
An entity is required to appoint a chief accountant The annual financial statements must be approved by the chief accountant
who must satisfy the criteria and conditions and the legal representative and a copy of the financial statements must
stipulated by the Law on Accounting and guiding be submitted to the local authorities within 90 days of the end of the
financial year.
regulations. If a chief accountant cannot be
appointed, the entity can either temporarily appoint For statutory reporting, entities using a currency other than VND as their
a person in-charge of accounting (maximum of 12 accounting currency must convert their financial statements prepared under
months) who meets the criteria and conditions as that currency into VND in accordance with certain regulations.
required by the regulations or outsource the chief Foreign invested entities are required to have their annual financial
accountant position from a competent accounting statements audited. Those entities must appoint an audit firm from a list of
service company. auditors approved and published by the MOF annually.
2Taxation
2.1
Tax regime in Vietnam
In the majority of cases, tax liability is self-assessed meaning that the taxpayer The following taxes are relevant for entities looking to invest in Vietnam:
is responsible for determining the amount of tax it must pay. Following
self-assessment and payment, the taxpayer will be subject to an audit or All taxes are levied at a national level
inspection by the tax authorities. Audits usually take place every one to five
years. Any reassessments under the audit process will either be settled by the
taxpayer or the taxpayer may go through one of the appeal mechanisms. Classification Taxes
Standard process for taxpayers in determining tax obligations Major taxes Corporate Income Tax (CIT)
Value Added Tax (VAT)
Foreign Contractor Withholding Tax (FCWT)
Personal Income Tax (PIT)
(1) Calculation (2) Declaration and Payment
Tax liability calculation Tax returns submission
Tax liability payment Other taxes Special Sales Taxes (SST)
Natural Resources Tax
Environment Protection Tax (EPT)
Business License Fee (BLF)
(4) Resolve impacts (3) Audit/Inspection
Additional tax & penalty payment; On regular basis and a number of others
or Initiate lawsuit (one to five years at a time)
Source: Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National Assembly of
Vietnam; Law on Value-Added Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam;
Source: Decree No. 125/2020/ND-CP, dated 19 October 2020, issued by the Government; Article 8, Decree No. Law No. 31/2013/QH13 amending, supplementing a number of Articles of Law on Value-Added Tax, dated 19 June
126/2020/ND-CP, dated 19 October 2020, issued by the Government; Law on Tax Administration No. 38/2019/QH14, 2013; Law on Special Sales Tax No. 27/2008/QH12, dated 14 November 2008, issued by the National Assembly of
dated 13 June 2019, issued by the National Assembly of Vietnam Vietnam; Decree No. 50/2010/ND-CP, dated 14 May 2010, issued by the Government
2Taxation
2.1
Tax regime in Vietnam
In the majority of cases, tax liability is self-assessed meaning that the taxpayer The following taxes are relevant for entities looking to invest in Vietnam:
is responsible for determining the amount of tax it must pay. Following
self-assessment and payment, the taxpayer will be subject to an audit or All taxes are levied at a national level
inspection by the tax authorities. Audits usually take place every one to five
years. Any reassessments under the audit process will either be settled by the
taxpayer or the taxpayer may go through one of the appeal mechanisms. Classification Taxes
Standard process for taxpayers in determining tax obligations Major taxes Corporate Income Tax (CIT)
Value Added Tax (VAT)
Foreign Contractor Withholding Tax (FCWT)
Personal Income Tax (PIT)
(1) Calculation (2) Declaration and Payment
Tax liability calculation Tax returns submission
Tax liability payment Other taxes Special Sales Taxes (SST)
Natural Resources Tax
Environment Protection Tax (EPT)
Business License Fee (BLF)
(4) Resolve impacts (3) Audit/Inspection
Additional tax & penalty payment; On regular basis and a number of others
or Initiate lawsuit (one to five years at a time)
Source: Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National Assembly of
Vietnam; Law on Value-Added Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam;
Source: Decree No. 125/2020/ND-CP, dated 19 October 2020, issued by the Government; Article 8, Decree No. Law No. 31/2013/QH13 amending, supplementing a number of Articles of Law on Value-Added Tax, dated 19 June
126/2020/ND-CP, dated 19 October 2020, issued by the Government; Law on Tax Administration No. 38/2019/QH14, 2013; Law on Special Sales Tax No. 27/2008/QH12, dated 14 November 2008, issued by the National Assembly of
dated 13 June 2019, issued by the National Assembly of Vietnam Vietnam; Decree No. 50/2010/ND-CP, dated 14 May 2010, issued by the Government
2.2
Tax compliance timeline
2.3
Corporate Income Tax
Submission schedule for tax returns Tax calculation

Declaration basis Deadline CIT VAT(*) FCWT PIT(*) BLF Determination of corporate income tax
Monthly 20th day of the following month
CIT Payable
Quarterly (**) 30th day of the following quarter
Annually/ 90th day from the fiscal year-end

Finalization
Assessable Income x Tax Rate
Upon occurrence 10th day from the payment day

(***)
(*) The VAT & PIT filing are by default on a monthly basis. Quarterly VAT filing is applicable upon an enterprises’ request
and is only applicable to (i) newly established enterprises for a 12-month period; or (ii) enterprises having previous fiscal Total Deductible Other Loss Carried
year annual revenue less than VND 50 billion. Quarterly PIT filing shall be applicable upon enterprises’ request if the VAT Revenue - Expenses (*) + Incomes - Forward (**)
filing is on a quarterly basis.
(**) Where an enterprise executes projects for infrastructure or housing for sale or for lease and collects advances
from customers, the enterprise is required to submit a CIT declaration on a quarterly basis and withhold 1% of the total
revenue/ advance. (*) To be deductible an expense must satisfy 4 conditions: (1) Incurred and in relation to business activities; (2) supported
by proper documents; (3) payments greater than VND 20 million must be supported by non-cash payment (e.g. bank
(***) (i) For CIT filing: real estate transfer declared by taxpayers that are not real estate companies, or by real estate transfer); and (4) must not be in the list of non-deductible expenses specified by the applicable regulations.
companies that choose this approach; or by any foreign organization that does business in Vietnam or earns income in
Vietnam from capital transfer but its operations do not comply with regulations of the LOI or the LOE. (ii) For VAT filing: (**) Losses can be carried forward for 5 years. There are specific rules and restrictions around offsetting losses against
real estate transfer transactions of enterprises registered VAT under direct method having VAT liability or VAT incurred profits from different types of business activities.
at import stage; (iii) for PIT filing: income from capital transfer, real estate transfer, capital investment, copyrights, Source: Article 7, Law on Corporate Income Tax No. 14/2008/QH12, dated 03 June 2008, issued by the National
franchises, prizes, inheritance, gifts; (iv) For FCWT: If an enterprise incurs FCWT many times in a month, it shall file on a Assembly of Vietnam
monthly basis instead of filing upon each occurrence.
Source: Article 44, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019, issued by the National
Assembly of Vietnam; Decree No. 139/2016/ND-CP, dated 4 October 2016, issued by the Government, regulating
License Tax
2.2
Tax compliance timeline
2.3
Corporate Income Tax
Submission schedule for tax returns Tax calculation

Declaration basis Deadline CIT VAT(*) FCWT PIT(*) BLF Determination of corporate income tax
Monthly 20th day of the following month
CIT Payable
Quarterly (**) 30th day of the following quarter
Annually/ 90th day from the fiscal year-end

Finalization
Assessable Income x Tax Rate
Upon occurrence 10th day from the payment day

(***)
(*) The VAT & PIT filing are by default on a monthly basis. Quarterly VAT filing is applicable upon an enterprises’ request
and is only applicable to (i) newly established enterprises for a 12-month period; or (ii) enterprises having previous fiscal Total Deductible Other Loss Carried
year annual revenue less than VND 50 billion. Quarterly PIT filing shall be applicable upon enterprises’ request if the VAT Revenue - Expenses (*) + Incomes - Forward (**)
filing is on a quarterly basis.
(**) Where an enterprise executes projects for infrastructure or housing for sale or for lease and collects advances
from customers, the enterprise is required to submit a CIT declaration on a quarterly basis and withhold 1% of the total
revenue/ advance. (*) To be deductible an expense must satisfy 4 conditions: (1) Incurred and in relation to business activities; (2) supported
by proper documents; (3) payments greater than VND 20 million must be supported by non-cash payment (e.g. bank
(***) (i) For CIT filing: real estate transfer declared by taxpayers that are not real estate companies, or by real estate transfer); and (4) must not be in the list of non-deductible expenses specified by the applicable regulations.
companies that choose this approach; or by any foreign organization that does business in Vietnam or earns income in
Vietnam from capital transfer but its operations do not comply with regulations of the LOI or the LOE. (ii) For VAT filing: (**) Losses can be carried forward for 5 years. There are specific rules and restrictions around offsetting losses against
real estate transfer transactions of enterprises registered VAT under direct method having VAT liability or VAT incurred profits from different types of business activities.
at import stage; (iii) for PIT filing: income from capital transfer, real estate transfer, capital investment, copyrights, Source: Article 7, Law on Corporate Income Tax No. 14/2008/QH12, dated 03 June 2008, issued by the National
franchises, prizes, inheritance, gifts; (iv) For FCWT: If an enterprise incurs FCWT many times in a month, it shall file on a Assembly of Vietnam
monthly basis instead of filing upon each occurrence.
Source: Article 44, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019, issued by the National
Assembly of Vietnam; Decree No. 139/2016/ND-CP, dated 4 October 2016, issued by the Government, regulating
License Tax
Non-deductible expenses
List of non-deductible expenses
Notable non-deductible expenses
▶ Depreciation of fixed ▶ Employment costs not ▶ Employee welfare

assets not used for actually paid or not clearly expenses exceeding the
business purposes or stipulated under a labor cap of one-month average
exceeding the regulated contract, collective labor monthly salary
depreciation rates agreement or company’s
policies
▶ Cost of raw materials, ▶ Interest on loans from ▶ Interest on loans

supplies, fuel, power non-economic and corresponding to the
and goods exceeding the non-credit organizations portion of charter capital Tax rate In general, the preferential tax
reasonable consumption exceeding 1.5 times the not yet contributed rate under the incentive regime is
levels as stipulated by the interest rate announced in accordance with The current standard CIT tax rate is applicable from the first year of
Government by the SBV registered contribution 20%. The CIT rate for enterprises in revenue generation. Any tax holiday is
schedule applicable from the first profit-making
exploration and mining of petroleum,
gas and other rare and precious year or the fourth year of revenue
▶ Periodical accrued ▶ Provisions for financial ▶ Unrealized foreign natural resources ranges from 32% generation, whichever comes first.
expenses not paid or not investment losses, exchange losses due to
to 50% depending on the location For high-tech enterprises,
fully paid at the end of the inventory devaluation, bad the year-end revaluation
period debts, product warranties of foreign currency and type of project. agriculture enterprises applying
or construction works, items other than account high technologies, enterprises as
not in accordance with payables
regulations Tax payment prescribed by the Law on High
Technology, the preferential tax rates
From fiscal year 2021, the are applicable from the year in which
▶ Overhead cost allocated ▶ Contribution to voluntary ▶ Administrative penalties,
provisional CIT payments for the they are granted the Certificates of
to the Permanent pension insurance, life fines, late payment
Establishment by foreign insurance for employees interest, etc. first three-quarters must be more High-tech Enterprise or Certificate of
companies exceeding the exceeding VND3 million/ than 75% of the total CIT finalization Agriculture Enterprise Applying High
amount determined based person/month amount, otherwise late tax payment Technologies.
on the revenue-based
interest will apply. The following table summarises the
allocation ratio
incentive regime in Vietnam.
▶ Donations other than
certain donations for
▶ Certain expenses related
to the issuance, purchase
▶ Net interest expenses
exceeding 30% EBITDA
Tax incentives
education, health care, and sale of shares (for enterprises
natural disaster or having related party The level of CIT incentives that
building charitable homes transactions). The organizations are entitled to varies
among other things excess amount may be based on many factors, including
carried forwarded for five location, sector and business scale.
consecutive years
If organizations are entitled to a
number of different incentives
Source: Article 9, Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National regimes they may choose to apply the
Assembly of Vietnam
most favorable one.
Non-deductible expenses
List of non-deductible expenses
Notable non-deductible expenses
▶ Depreciation of fixed ▶ Employment costs not ▶ Employee welfare

assets not used for actually paid or not clearly expenses exceeding the
business purposes or stipulated under a labor cap of one-month average
exceeding the regulated contract, collective labor monthly salary
depreciation rates agreement or company’s
policies
▶ Cost of raw materials, ▶ Interest on loans from ▶ Interest on loans

supplies, fuel, power non-economic and corresponding to the
and goods exceeding the non-credit organizations portion of charter capital Tax rate In general, the preferential tax
reasonable consumption exceeding 1.5 times the not yet contributed rate under the incentive regime is
levels as stipulated by the interest rate announced in accordance with The current standard CIT tax rate is applicable from the first year of
Government by the SBV registered contribution 20%. The CIT rate for enterprises in revenue generation. Any tax holiday is
schedule applicable from the first profit-making
exploration and mining of petroleum,
gas and other rare and precious year or the fourth year of revenue
▶ Periodical accrued ▶ Provisions for financial ▶ Unrealized foreign natural resources ranges from 32% generation, whichever comes first.
expenses not paid or not investment losses, exchange losses due to
to 50% depending on the location For high-tech enterprises,
fully paid at the end of the inventory devaluation, bad the year-end revaluation
period debts, product warranties of foreign currency and type of project. agriculture enterprises applying
or construction works, items other than account high technologies, enterprises as
not in accordance with payables
regulations Tax payment prescribed by the Law on High
Technology, the preferential tax rates
From fiscal year 2021, the are applicable from the year in which
▶ Overhead cost allocated ▶ Contribution to voluntary ▶ Administrative penalties,
provisional CIT payments for the they are granted the Certificates of
to the Permanent pension insurance, life fines, late payment
Establishment by foreign insurance for employees interest, etc. first three-quarters must be more High-tech Enterprise or Certificate of
companies exceeding the exceeding VND3 million/ than 75% of the total CIT finalization Agriculture Enterprise Applying High
amount determined based person/month amount, otherwise late tax payment Technologies.
on the revenue-based
interest will apply. The following table summarises the
allocation ratio
incentive regime in Vietnam.
▶ Donations other than
certain donations for
▶ Certain expenses related
to the issuance, purchase
▶ Net interest expenses
exceeding 30% EBITDA
Tax incentives
education, health care, and sale of shares (for enterprises
natural disaster or having related party The level of CIT incentives that
building charitable homes transactions). The organizations are entitled to varies
among other things excess amount may be based on many factors, including
carried forwarded for five location, sector and business scale.
consecutive years
If organizations are entitled to a
number of different incentives
Source: Article 9, Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National regimes they may choose to apply the
Assembly of Vietnam
most favorable one.
By Sector
Level of CIT incentives

Activities
Tax rate Tax holiday
▶ High-tech enterprises/ Application of high 10% for 4 years of tax

technologies enterprises 15 years exemption;
▶ Investment and development of water and 50% reduction
plants, power plants, water drainage and for the next 9 years
supply system, bridges, roadway, railway,
ports, etc.)
▶ Software production
▶ Production of composite materials, light
building materials, rare materials, production
of renewable energy, clean energy, energy
from waste destruction and biotechnology
development
▶ Environmental protection
▶ Supporting industries
▶ Socialized projects in regions with difficult/ 10% for whole 4 years of tax
especially difficult socio-economic conditions project’s exemption;
Summary of the incentive regime in Vietnam duration and 50% reduction
for the next 5 years
By Location
Level of CIT incentives ▶ Socialized project not located in difficult or 10% for whole Tax exemption
Activities especially difficult socio-economic regions project’s and reduction
Tax rate Tax holiday duration under incentives
for location (if
applicable)
▶ With especially difficult socio-economic 10% for 4 years of tax
conditions 15 years exemption;
▶ Economics zones and 50% ▶ Farming, husbandry, processing of agriculture 10% for whole 4 years of tax
▶ High-tech zones, including concentrated reduction for the and aquaculture in difficult regions; forestry in project’s exemption;
information technology parks established next 9 years difficult regions; production of plant varieties, duration and 50% reduction
under the Prime Minister’s decision animal breeds; production of salt; preservation for the next 5 years
of agriculture products, aquaculture products
and foods, etc.
▶ With difficult socio-economic conditions 17% for 2 years of tax
10 years exemption;
and 50% ▶ Farming, husbandry, processing of agriculture 15% for whole Not applicable
reduction for the and aquaculture products not located in project’s
next 4 years difficult and especially difficult regions duration
▶ Industrial park (not located in a favorable Not 2 years of tax ▶ Manufacturing of steel, energy saving 17% for Not applicable
socio-economic location) applicable exemption; products, machinery and equipment serving 10 years
and 50% agriculture, forestry, fisheries and salt
reduction for the production, traditional crafts, etc.
next 4 years
By Sector

Activities
Tax rate Tax holiday
▶ High-tech enterprises/ Application of high 10% for 4 years of tax

technologies enterprises 15 years exemption;
▶ Investment and development of water and 50% reduction
plants, power plants, water drainage and for the next 9 years
supply system, bridges, roadway, railway,
ports, etc.)
▶ Software production
▶ Production of composite materials, light
building materials, rare materials, production
of renewable energy, clean energy, energy
from waste destruction and biotechnology
development
▶ Environmental protection
▶ Supporting industries
▶ Socialized projects in regions with difficult/ 10% for whole 4 years of tax
especially difficult socio-economic conditions project’s exemption;
Summary of the incentive regime in Vietnam duration and 50% reduction
By Location
Level of CIT incentives ▶ Socialized project not located in difficult or 10% for whole Tax exemption
Activities especially difficult socio-economic regions project’s and reduction
Tax rate Tax holiday duration under incentives
for location (if
applicable)
▶ With especially difficult socio-economic 10% for 4 years of tax
conditions 15 years exemption;
▶ Economics zones and 50% ▶ Farming, husbandry, processing of agriculture 10% for whole 4 years of tax
▶ High-tech zones, including concentrated reduction for the and aquaculture in difficult regions; forestry in project’s exemption;
information technology parks established next 9 years difficult regions; production of plant varieties, duration and 50% reduction
under the Prime Minister’s decision animal breeds; production of salt; preservation for the next 5 years
of agriculture products, aquaculture products
and foods, etc.
▶ With difficult socio-economic conditions 17% for 2 years of tax
10 years exemption;
and 50% ▶ Farming, husbandry, processing of agriculture 15% for whole Not applicable
reduction for the and aquaculture products not located in project’s
next 4 years difficult and especially difficult regions duration
▶ Industrial park (not located in a favorable Not 2 years of tax ▶ Manufacturing of steel, energy saving 17% for Not applicable
socio-economic location) applicable exemption; products, machinery and equipment serving 10 years
and 50% agriculture, forestry, fisheries and salt
reduction for the production, traditional crafts, etc.
next 4 years
2.4
By Business scale
Activities
Tax rate
Tax holiday
Value Added Tax
▶ VND6,000 billion capital projects (*) 10% for 4 years of tax
▶ VND12,000 billion capital projects (**) 15 years exemption;
and 50% reduction VAT is imposed on goods and services used in production, trading and
consumption in Vietnam (including those purchased from overseas
organizations and individuals).
▶ VND3,000 billion capital projects (***) 5% for 6 years of tax
▶ VND30,000 billion capital projects (****) 37.5 years exemption;
and 50% reduction VAT liabilities Declaration method
for the next 13
years In general, VAT liabilities must be There are two methods for VAT
paid to the local tax authorities declaration including the credit
(*) The capital must be contributed within three years from being licensed and the project must have a minimum annual where the business activities take method and the direct method.
revenue of 10,000 billion by the fourth years of revenue-generation or employ more than 3,000 employees by the fourth
years of operation. place while for imported goods, VAT The conditions for adoption of a
(**) The capital must be contributed within five years from being licensed and the project must use technologies being liabilities will be collected by the declaration method are based on
covered under the Law on High Technology, and the Law on Science and Technology. customs authorities prior to actual annual revenue, business sector,
(***) In which VND 1,000 billion must be contributed within three years from being licensed. The incentive shall apply for importation. accounting systems and business
investment projects establishing innovation centers and research and development centers. intentions.
(****) In which VND 10,000 billion must be contributed within three years from being licensed. The incentive shall apply
for investment projects in sectors subject to special investment incentives.
Source: Article 13, Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National Comparison of the condition for credit method and direct method
Assembly of Vietnam; Article 15 and 16, Decree No. 218/2013/ND-CP, dated 26 December 2013, issued by the
Government
Conditions Credit Method Direct method
Extension of incentive scheme Annual revenue More than VND1 billion of

revenue subject to VAT
Less than VND1 billion of revenue
subject to VAT unless voluntarily
registering for the credit method
For investment projects of a large scale and utilizing high or new technologies,
which are considered in need of particular attraction, the duration of the 10%
Business sector Voluntarily register for VAT Engaging in trading gold, silver and
tax rate may be extended up to 30 years based on a proposal by the Minister
declaration under credit precious stones
of Finance and approval of the Prime Minister. method Business individuals and
households
Accounting Maintaining complete books Not required to maintain proper

systems of account, invoices and books of account and foreign
documents in accordance organizations/ individuals carrying
with relevant accounting, tax out business not regulated under
regulations the LOI
Source: Article 7, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Article 12,
Circular No. 219/2013/TT-BTC, dated 31 December 2013, issued by the MOF
2.4
By Business scale
Activities
Tax rate
Tax holiday
Value Added Tax
▶ VND6,000 billion capital projects (*) 10% for 4 years of tax
▶ VND12,000 billion capital projects (**) 15 years exemption;
and 50% reduction VAT is imposed on goods and services used in production, trading and
consumption in Vietnam (including those purchased from overseas
organizations and individuals).
▶ VND3,000 billion capital projects (***) 5% for 6 years of tax
▶ VND30,000 billion capital projects (****) 37.5 years exemption;
and 50% reduction VAT liabilities Declaration method
for the next 13
years In general, VAT liabilities must be There are two methods for VAT
paid to the local tax authorities declaration including the credit
(*) The capital must be contributed within three years from being licensed and the project must have a minimum annual where the business activities take method and the direct method.
revenue of 10,000 billion by the fourth years of revenue-generation or employ more than 3,000 employees by the fourth
years of operation. place while for imported goods, VAT The conditions for adoption of a
(**) The capital must be contributed within five years from being licensed and the project must use technologies being liabilities will be collected by the declaration method are based on
covered under the Law on High Technology, and the Law on Science and Technology. customs authorities prior to actual annual revenue, business sector,
(***) In which VND 1,000 billion must be contributed within three years from being licensed. The incentive shall apply for importation. accounting systems and business
investment projects establishing innovation centers and research and development centers. intentions.
(****) In which VND 10,000 billion must be contributed within three years from being licensed. The incentive shall apply
for investment projects in sectors subject to special investment incentives.
Source: Article 13, Law on Corporate Income Tax No. 14/2008/QH12, dated 3 June 2008, issued by the National Comparison of the condition for credit method and direct method
Assembly of Vietnam; Article 15 and 16, Decree No. 218/2013/ND-CP, dated 26 December 2013, issued by the
Government
Conditions Credit Method Direct method
Extension of incentive scheme Annual revenue More than VND1 billion of

revenue subject to VAT
Less than VND1 billion of revenue
subject to VAT unless voluntarily
registering for the credit method
For investment projects of a large scale and utilizing high or new technologies,
which are considered in need of particular attraction, the duration of the 10%
Business sector Voluntarily register for VAT Engaging in trading gold, silver and
tax rate may be extended up to 30 years based on a proposal by the Minister
declaration under credit precious stones
of Finance and approval of the Prime Minister. method Business individuals and
households
Accounting Maintaining complete books Not required to maintain proper

systems of account, invoices and books of account and foreign
documents in accordance organizations/ individuals carrying
with relevant accounting, tax out business not regulated under
regulations the LOI
Source: Article 7, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Article 12,
Circular No. 219/2013/TT-BTC, dated 31 December 2013, issued by the MOF
Tax calculation (Credit method) Direct method
VAT payable calculation (credit method) VAT payable calculation and tax rate summary (Direct method)
Input VAT (*) Output VAT VAT payable

Tax calculation Tax rate
VAT amounts on all VAT Total VAT on goods or Output VAT minus
1%
▶
Distribution; supply of goods
invoices of purchased services sold Input VAT Revenue
goods and services
VAT amount paid on
2%
▶
imported goods Other cases
▶ VAT amount paid under
the FCWT regime Tax rate
Manufacturing; transportation; services attached to
3% the supply of goods; construction, including supply
of materials
(*) In order for input VAT to be creditable it must be (1) related to the enterprise’s business activities; (2.1) be supported
by legitimate VAT invoices; or (2.2) be supported by payment evidence (via non-cash mode for invoices of VND20 million
VAT payable
or more); or (2.3) be supported by a tax payment voucher (for import VAT); or (2.4) a FCWT payment voucher (for VAT
of FCWT).
(Revenue)
x (VAT rate) 5% Services; construction excluding supply of materials
Source: Article 7, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government
Source: Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Article 12, Circular No.
219/2013/TT-BTC, dated 31 December 2013, issued by the MOF; Law No. 31/2013/QH13 amending, supplementing a
Tax rate (Credit method) number of Articles of Law on Value-Added Tax, dated 19 June 2013
VAT Tax rate summary (credit method)
Export goods and services
0% International transportation
Aviation and maritime services either directly for foreign entities or
through agents
5%
Clean water, pesticide services for digging, embanking, dredging
of canals, agricultural machinery and equipment, sugar and by-
products, medical equipment, teaching aids, artistic, sport activities.
10% Standard VAT rate, applicable to goods and services other than those
mentioned above
Tax calculation (Credit method) Direct method
VAT payable calculation (credit method) VAT payable calculation and tax rate summary (Direct method)
Input VAT (*) Output VAT VAT payable

Tax calculation Tax rate
VAT amounts on all VAT Total VAT on goods or Output VAT minus
1%
▶
Distribution; supply of goods
invoices of purchased services sold Input VAT Revenue
goods and services
VAT amount paid on
2%
▶
imported goods Other cases
▶ VAT amount paid under
the FCWT regime Tax rate
Manufacturing; transportation; services attached to
3% the supply of goods; construction, including supply
of materials
(*) In order for input VAT to be creditable it must be (1) related to the enterprise’s business activities; (2.1) be supported
by legitimate VAT invoices; or (2.2) be supported by payment evidence (via non-cash mode for invoices of VND20 million
VAT payable
or more); or (2.3) be supported by a tax payment voucher (for import VAT); or (2.4) a FCWT payment voucher (for VAT
of FCWT).
(Revenue)
x (VAT rate) 5% Services; construction excluding supply of materials
Source: Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Article 12, Circular No.
219/2013/TT-BTC, dated 31 December 2013, issued by the MOF; Law No. 31/2013/QH13 amending, supplementing a
Tax rate (Credit method) number of Articles of Law on Value-Added Tax, dated 19 June 2013
VAT Tax rate summary (credit method)
Export goods and services
0% International transportation
Aviation and maritime services either directly for foreign entities or
through agents
5%
Clean water, pesticide services for digging, embanking, dredging
of canals, agricultural machinery and equipment, sugar and by-
products, medical equipment, teaching aids, artistic, sport activities.
10% Standard VAT rate, applicable to goods and services other than those
mentioned above
Non-taxable and non-declaration income VAT Refund
Under VAT regulations, Income gained from some business activities is not be subject Taxpayers can claim VAT refunds from the tax authorities only in the following cases
to VAT or does not need to be declared.
List of cases can claim VAT refunds
List of income not subject to VAT or exempted from VAT declaration
Cases Main conditions
Non-taxable income
New projects Adopting VAT credit method
▶ Unprocessed or preprocessed products from farming, breeding, and aquaculture; investment Under pre-operation investment period
breeds of livestock, plant varieties, including eggs, breeds, seeds, stems, tubers, Total accumulated input VAT exceeds VND300 million (some
semen, embryos, genetic materials exceptions may apply)
▶ Transfer of right to use land
▶ Human insurance; agriculture insurance services; insurance for ships and instruments Exporting Adopting VAT credit method
for fishing; reinsurance activities Total accumulated input VAT for export production (after offsetting
▶ Finance, banking, and securities services including loans, bank/insurance guarantee, the VAT liabilities of domestic activities) exceed VND300 million
finance lease, issuance of credit cards, brokerage, capital transfer, FX trading, (capped at 10% of export revenue)
derivatives, collateral and related financial instruments
(*) Nonrefundable: Goods that are imported and then exported
▶ Public postal and telecommunications services, and public Internet services provided by outside a customs-controlled area or goods that are exported
the government, postal and telecommunications services from abroad (inbound) outside the customs-controlled area in accordance with the customs
▶ Education and vocational training according to prevailing regulations regulations
▶ Machinery and equipment not locally produced, imported for specific purpose
▶ Temporarily imported goods
Business Business transfer, conversion, merger, consolidation division,
▶ Goods and services traded between a foreign party and a free trade zone, or among
dissolution, bankruptcy or shutdown
free trade zones
▶ Technology transfers according to the Law on Technology Transfer; intellectual
property right transfers according to the Law on Intellectual Property (except exported Other cases Projects and programs financed by ODA grant, grant aids or
software) humanitarian aids
Entities granted diplomatic immunity and privileges as per relevant laws
Income that does not need to be declared Those cases eligible for refund as defined in international treaties
that the Socialist Republic of Vietnam has entered into.
▶ Monetary compensation, financial income
▶ Services provided by a business that does not have a permanent establishment in Source: Article 9, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Law No.
31/2013/QH13 amending, supplementing a number of Articles of Law on Value-Added Tax, dated 19 June 2013
Vietnam
▶ Project of investment transfer
▶ Transfer of assets within a company and dependent units
Capital contribution of assets
Electronic invoices
▶
▶ Commission for some agent services
▶ Payment on behalf (including income from undertaking payments on behalf of
government authorities) At present, taxpayers can choose between issuing paper invoices or e-invoices.
▶ Goods imported after having been exported (goods return) From 1 July 2022, e-invoices must be used by most enterprises except in very
specific cases.
Source: Article 3, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Law No.
Non-taxable and non-declaration income VAT Refund
Under VAT regulations, Income gained from some business activities is not be subject Taxpayers can claim VAT refunds from the tax authorities only in the following cases
to VAT or does not need to be declared.
List of cases can claim VAT refunds
List of income not subject to VAT or exempted from VAT declaration
Cases Main conditions
Non-taxable income
New projects Adopting VAT credit method
▶ Unprocessed or preprocessed products from farming, breeding, and aquaculture; investment Under pre-operation investment period
breeds of livestock, plant varieties, including eggs, breeds, seeds, stems, tubers, Total accumulated input VAT exceeds VND300 million (some
semen, embryos, genetic materials exceptions may apply)
▶ Transfer of right to use land
▶ Human insurance; agriculture insurance services; insurance for ships and instruments Exporting Adopting VAT credit method
for fishing; reinsurance activities Total accumulated input VAT for export production (after offsetting
▶ Finance, banking, and securities services including loans, bank/insurance guarantee, the VAT liabilities of domestic activities) exceed VND300 million
finance lease, issuance of credit cards, brokerage, capital transfer, FX trading, (capped at 10% of export revenue)
derivatives, collateral and related financial instruments
(*) Nonrefundable: Goods that are imported and then exported
▶ Public postal and telecommunications services, and public Internet services provided by outside a customs-controlled area or goods that are exported
the government, postal and telecommunications services from abroad (inbound) outside the customs-controlled area in accordance with the customs
▶ Education and vocational training according to prevailing regulations regulations
▶ Machinery and equipment not locally produced, imported for specific purpose
▶ Temporarily imported goods
Business Business transfer, conversion, merger, consolidation division,
▶ Goods and services traded between a foreign party and a free trade zone, or among
dissolution, bankruptcy or shutdown
free trade zones
▶ Technology transfers according to the Law on Technology Transfer; intellectual
property right transfers according to the Law on Intellectual Property (except exported Other cases Projects and programs financed by ODA grant, grant aids or
software) humanitarian aids
Entities granted diplomatic immunity and privileges as per relevant laws
Income that does not need to be declared Those cases eligible for refund as defined in international treaties
that the Socialist Republic of Vietnam has entered into.
▶ Monetary compensation, financial income
▶ Services provided by a business that does not have a permanent establishment in Source: Article 9, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Law No.
Vietnam
▶ Project of investment transfer
▶ Transfer of assets within a company and dependent units
Capital contribution of assets
Electronic invoices
▶
▶ Commission for some agent services
▶ Payment on behalf (including income from undertaking payments on behalf of
government authorities) At present, taxpayers can choose between issuing paper invoices or e-invoices.
▶ Goods imported after having been exported (goods return) From 1 July 2022, e-invoices must be used by most enterprises except in very
specific cases.
Source: Article 3, Decree No. 209/2013/ND-CP, dated 18 December 2013, issued by the Government; Law No.
Taxable and non-taxable transactions
Comparison of transactions applied FCWT and non-FCWT
2.5
Transactions FCWT Non-FCWT
Foreign contractor Services Services provided or consumed

inside Vietnam
Services provided and
consumed outside Vietnam
withholding tax
Goods Supply of goods attached with Supply of goods not attached
services in Vietnam with services in Vietnam and
Supply of goods in which the final the final delivery point is
delivery points is inside Vietnam outside Vietnam
Taxpayers
Others (*) Construction & installation
FCWT applies to foreign contractors (FCs) Interest
doing business and earning income from Royalties
Vietnam under a contract, agreement or Penalty/Compensation
undertaking. In additions, from 1 July 2020, Income from transportation
under the new Law on Tax Administration, activities
overseas service providers providing Securities transfer
electronic commerce, digital business and
other services provided by overseas providers (*) No dividend withholding tax applies to corporate shareholders
without permanent establishments in Vietnam Source: Article 1 and 2, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF; Law on Value-Added
Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam; Decree No. 209/2013/ND-CP,
shall directly or authorize representatives dated 18 December 2013, issued by the Government; Law No. 31/2013/QH13 amending, supplementing a number of
to apply for taxpayer registration, declare Articles of Law on Value-Added Tax, dated 19 June 2013
and pay tax in Vietnam in accordance with
regulations of the MOF. Deemed tax
(both CIT and VAT of FCWT) on revenue Declaration methods and calculation
earned will be applied.
FCWT comprises both a CIT and VAT component.
The filing and calculation of FCWT is based on one of three methods: (1)
Deemed method (default); (ii) Hybrid method; and (iii) Declaration method.
Taxable and non-taxable transactions
Comparison of transactions applied FCWT and non-FCWT
2.5
Transactions FCWT Non-FCWT
Foreign contractor Services Services provided or consumed

inside Vietnam
Services provided and
consumed outside Vietnam
withholding tax
Goods Supply of goods attached with Supply of goods not attached
services in Vietnam with services in Vietnam and
Supply of goods in which the final the final delivery point is
delivery points is inside Vietnam outside Vietnam
Taxpayers
Others (*) Construction & installation
FCWT applies to foreign contractors (FCs) Interest
doing business and earning income from Royalties
Vietnam under a contract, agreement or Penalty/Compensation
undertaking. In additions, from 1 July 2020, Income from transportation
under the new Law on Tax Administration, activities
overseas service providers providing Securities transfer
electronic commerce, digital business and
other services provided by overseas providers (*) No dividend withholding tax applies to corporate shareholders
without permanent establishments in Vietnam Source: Article 1 and 2, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF; Law on Value-Added
Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam; Decree No. 209/2013/ND-CP,
shall directly or authorize representatives dated 18 December 2013, issued by the Government; Law No. 31/2013/QH13 amending, supplementing a number of
to apply for taxpayer registration, declare Articles of Law on Value-Added Tax, dated 19 June 2013
and pay tax in Vietnam in accordance with
regulations of the MOF. Deemed tax
(both CIT and VAT of FCWT) on revenue Declaration methods and calculation
earned will be applied.
FCWT comprises both a CIT and VAT component.
The filing and calculation of FCWT is based on one of three methods: (1)
Deemed method (default); (ii) Hybrid method; and (iii) Declaration method.
Comparison of criterias among FCWT methods FCWT tax rate summary
Criteria Deemed Method Declaration method Hybrid method Business activities VAT rate CIT rate
Filing Vietnamese Party Foreign Contractor Foreign Contractor Supply of goods in Vietnam or the goods are associated with
services rendered in Vietnam (including on-spot export and
import, distribution of goods in Vietnam or delivery of goods Exempt 1%
Calculation VAT = Taxable income VAT = Output VAT VAT = Output VAT
where the seller bears the risks relating to delivery of the goods
x deemed rate – Input VAT – Input VAT
(*) Credit method (*) Credit method
within Vietnam)
CIT = Taxable income
x deemed rate CIT = Taxable income CIT = Taxable income
x rate x deemed rate Services 5% 5%
(*) same as a domestic
corporation
Supply of goods attached to services where the value is
Exempt 1%
separated (Income from goods)
Revenue/ Tax liability shall No detailed No detailed
Profit be withheld before requirement requirement
remittance remittance Supply of goods attached to services where the value is 5% 5%
separated (Income from services)
Source: Article 12 and 13, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF; Law on Value-
Added Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam; Decree No. 209/2013/
Supply of machinery and equipment with services attached
where the value is not separated 3% 2%
ND-CP, dated 18 December 2013, issued by the Government; Law No. 31/2013/QH13 amending, supplementing a
number of Articles of Law on Value-Added Tax, dated 19 June 2013
Construction, installation inclusive of raw materials, machinery

and equipment 3% 2%
The Deemed Method is the default method, and the most common method.
The Declaration method and Hybrid method must be selected and can only be
chosen if the following conditions are met: Construction, installation exclusive of raw materials, machinery
and equipment 5% 2%
▶ The taxpayer is conducting a business in Vietnam under a contract with a
duration of 183 days or more
Loan interest Exempt 5%
▶ The taxpayer has a registered Permanent Establishment in Vietnam (e.g.
Project Office Royalties (in accordance with the Law on Intellectual Property) Exempt 10%
▶ The taxpayer applies the Vietnamese Accounting Systems
Royalties (not in accordance with the Law on Intellectual Property) 5% 10%
Tax rates Software Exempt 10%
For the deemed method, different tax rates apply depending on the type of
Software Services Exempt 5%
business activity
Other cases where the value of different activities is not Highest rate applicable
separated
Source: Article 12 and 13, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF
Comparison of criterias among FCWT methods FCWT tax rate summary
Criteria Deemed Method Declaration method Hybrid method Business activities VAT rate CIT rate
Filing Vietnamese Party Foreign Contractor Foreign Contractor Supply of goods in Vietnam or the goods are associated with
services rendered in Vietnam (including on-spot export and
import, distribution of goods in Vietnam or delivery of goods Exempt 1%
Calculation VAT = Taxable income VAT = Output VAT VAT = Output VAT
where the seller bears the risks relating to delivery of the goods
x deemed rate – Input VAT – Input VAT
(*) Credit method (*) Credit method
within Vietnam)
CIT = Taxable income
x deemed rate CIT = Taxable income CIT = Taxable income
x rate x deemed rate Services 5% 5%
(*) same as a domestic
corporation
Supply of goods attached to services where the value is
Exempt 1%
separated (Income from goods)
Revenue/ Tax liability shall No detailed No detailed
Profit be withheld before requirement requirement
remittance remittance Supply of goods attached to services where the value is 5% 5%
separated (Income from services)
Source: Article 12 and 13, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF; Law on Value-
Added Tax No. 13/2008/QH12, dated 3 June 2008, issued by the National Assembly of Vietnam; Decree No. 209/2013/
Supply of machinery and equipment with services attached
where the value is not separated 3% 2%
ND-CP, dated 18 December 2013, issued by the Government; Law No. 31/2013/QH13 amending, supplementing a
number of Articles of Law on Value-Added Tax, dated 19 June 2013
Construction, installation inclusive of raw materials, machinery

and equipment 3% 2%
The Deemed Method is the default method, and the most common method.
The Declaration method and Hybrid method must be selected and can only be
chosen if the following conditions are met: Construction, installation exclusive of raw materials, machinery
and equipment 5% 2%
▶ The taxpayer is conducting a business in Vietnam under a contract with a
duration of 183 days or more
Loan interest Exempt 5%
▶ The taxpayer has a registered Permanent Establishment in Vietnam (e.g.
Project Office Royalties (in accordance with the Law on Intellectual Property) Exempt 10%
▶ The taxpayer applies the Vietnamese Accounting Systems
Royalties (not in accordance with the Law on Intellectual Property) 5% 10%
Tax rates Software Exempt 10%
For the deemed method, different tax rates apply depending on the type of
Software Services Exempt 5%
business activity
Other cases where the value of different activities is not Highest rate applicable
separated
Source: Article 12 and 13, Circular No. 103/2014/TT-BTC, dated 6 August 2014, issued by the MOF
2.6
Personal income tax
Tax residency status

Tax resident vs. tax non-resident
Comparison between tax residents and tax non-residents
The incidence of PIT depends on whether an individual is a tax resident or a Tax resident Tax non-resident
tax non-resident of Vietnam
Taxable income Worldwide income Vietnam-sourced income
Determination of tax residency status in Vietnam

Deductions to Family relief No
employment income Compulsory insurances
Stay in Vietnam for 183 days Voluntary pension fund/insurance
or more in a calendar year or (capped at VND1 million/month)
Yes
12-consecutive month period Tax resident Donations to charitable,
from the 1st arrival date to humanitarian, study
Vietnam? encouragement funds
Rented accommodation (hotel,
No rented house, working place, Tax rate on Progressive tax rates Flat rate of 20%
etc.) with total rental terms employment income (5%-10%) (*)
Tax non- No Have a regular place of >= 183 days in a tax year
resident residence in Vietnam?
Tax finalization on Required Not required
Holding temporary/permanent
Yes employment income
residence card/ family record
book in Vietnam
Tax resident of another Double taxation Foreign tax credit on foreign- Tax exemption if conditions
Tax No
country, evidenced by tax elimination sourced income stated in the tax treaty are
resident satisfied (a notification to the
resident certificate, etc.
tax authority is required).
Yes
(*) Upon paying income of VND2 million or more to a tax resident who does not sign a labor contract or signs a labor
contract with term of less than 3 months, the Vietnam-based income payer shall withhold PIT at 10% unless the income
Tax non-resident payee provides a valid commitment on under-taxation-threshold-income. The progressive tax rates shall still be applied on
total annual employment income of the tax residents upon their tax finalizations.
Source: Article 1 and 7, Clause 1 of Article 18, Clause 2 of Article 26 of the Circular No. 111/2013/TT-BTC, dated 15
Source: Clause 1 and 2, Article 1, Circular No. 111/2013/TT-BTC, dated 15 August 2013, issued by the MOF August 2013, issued by the MOF; Clause 13 of Article 16 of the Circular No. 156/2013/TT-BTC, dated 06 November
2013, issued by the MOF
2.6
Personal income tax
Tax residency status

Tax resident vs. tax non-resident
Comparison between tax residents and tax non-residents
The incidence of PIT depends on whether an individual is a tax resident or a Tax resident Tax non-resident
tax non-resident of Vietnam
Taxable income Worldwide income Vietnam-sourced income
Determination of tax residency status in Vietnam

Deductions to Family relief No
employment income Compulsory insurances
Stay in Vietnam for 183 days Voluntary pension fund/insurance
or more in a calendar year or (capped at VND1 million/month)
Yes
12-consecutive month period Tax resident Donations to charitable,
from the 1st arrival date to humanitarian, study
Vietnam? encouragement funds
Rented accommodation (hotel,
No rented house, working place, Tax rate on Progressive tax rates Flat rate of 20%
etc.) with total rental terms employment income (5%-10%) (*)
Tax non- No Have a regular place of >= 183 days in a tax year
resident residence in Vietnam?
Tax finalization on Required Not required
Holding temporary/permanent
Yes employment income
residence card/ family record
book in Vietnam
Tax resident of another Double taxation Foreign tax credit on foreign- Tax exemption if conditions
Tax No
country, evidenced by tax elimination sourced income stated in the tax treaty are
resident satisfied (a notification to the
resident certificate, etc.
tax authority is required).
Yes
(*) Upon paying income of VND2 million or more to a tax resident who does not sign a labor contract or signs a labor
contract with term of less than 3 months, the Vietnam-based income payer shall withhold PIT at 10% unless the income
Tax non-resident payee provides a valid commitment on under-taxation-threshold-income. The progressive tax rates shall still be applied on
total annual employment income of the tax residents upon their tax finalizations.
Source: Article 1 and 7, Clause 1 of Article 18, Clause 2 of Article 26 of the Circular No. 111/2013/TT-BTC, dated 15
Source: Clause 1 and 2, Article 1, Circular No. 111/2013/TT-BTC, dated 15 August 2013, issued by the MOF August 2013, issued by the MOF; Clause 13 of Article 16 of the Circular No. 156/2013/TT-BTC, dated 06 November
2013, issued by the MOF
Tax year
Determination of tax year of a tax resident in Vietnam ▶ Mobile phone allowance
▶ Wages for working at night or overtime in excess of the normal wages
▶ First ta
ẽ x year ▶ Non-compulsory insurance without accumulated premium (e.g. health,
accident insurance) for employees
No. of presence days in the first calendar year
(day in & day out are counted as one day)
▶ Training fees relevant to employees’ profession or in line with the
employers’ plan
▶ Tuition fees for the children of expatriates working in Vietnam to study in
Vietnam and children of Vietnamese working abroad to study abroad from
kindergarten to high school level
>= 183 days < 183 days but >=
183 days in the 12
▶ Transportation for conveying employees from their residence to their
consecutive month workplace and vice versa
period from the first ▶ Allowance for marriage and condolences for funeral of the employees and
arrival date to Vietnam
their family members (capped at average one month salary)
Citizen of country Citizen of country ▶ Air ticket for home leave of expatriates working in Vietnam or Vietnamese
signing DTA with not signing DTA with employees working overseas limited to one trip per year
Vietnam: first tax Vietnam: first tax
year is the calendar year is the calendar First tax year: 12
▶ Per diem and business trip expenses
year starting from the year starting from 01 consecutive month ▶ Severance allowance paid in line with the labor regulations
first arrival month to January period from the first
Vietnam arrival date to Vietnam
▶ Social insurance allowance paid by the social insurance authorities and
▶ Health care, entertainment, beauty services for collective employees
without mentioning any specific employee
▶ Second ta
ẽ x year onwards: calendar year
The following are examples of some benefits which are subject to PIT
concessional treatment:
Source: Point e.2, Clause 2, Article 26, Circular 111/2013/TT-BTC, issued by the MOF; Article 2, Circular No. 119/2014/
TT-BTC, dated 25 August 2014, issued by the MOF ▶ Accommodation and electricity, water and associated services provided
and arranged by the employer to the employee is taxed at the lower of the
actual expenses and 15% of the total taxable income (exclusive of house
Employment income allowance)
▶ Life insurance premiums paid by an employer for an employee is taxed at
All salary, allowances, bonuses and benefits in-kind are taxable unless a flat tax rate of 10%
specifically excluded.
The following are some examples of benefits not subject to PIT:
▶ One-off relocation allowance for expatriates to reside in Vietnam,
Vietnamese employees to work overseas or Vietnamese employees who
have long-term residence overseas to return to work in Vietnam
▶ Meal allowance in-kind (uncapped) or in cash (capped at VND730,000/month)
▶ Clothing allowance in-kind (uncapped) or in cash (capped at VND5 million/year)
Tax year
Determination of tax year of a tax resident in Vietnam ▶ Mobile phone allowance
▶ Wages for working at night or overtime in excess of the normal wages
▶ First ta
ẽ x year ▶ Non-compulsory insurance without accumulated premium (e.g. health,
accident insurance) for employees
No. of presence days in the first calendar year
(day in & day out are counted as one day)
▶ Training fees relevant to employees’ profession or in line with the
employers’ plan
▶ Tuition fees for the children of expatriates working in Vietnam to study in
Vietnam and children of Vietnamese working abroad to study abroad from
kindergarten to high school level
>= 183 days < 183 days but >=
183 days in the 12
▶ Transportation for conveying employees from their residence to their
consecutive month workplace and vice versa
period from the first ▶ Allowance for marriage and condolences for funeral of the employees and
arrival date to Vietnam
their family members (capped at average one month salary)
Citizen of country Citizen of country ▶ Air ticket for home leave of expatriates working in Vietnam or Vietnamese
signing DTA with not signing DTA with employees working overseas limited to one trip per year
Vietnam: first tax Vietnam: first tax
year is the calendar year is the calendar First tax year: 12
▶ Per diem and business trip expenses
year starting from the year starting from 01 consecutive month ▶ Severance allowance paid in line with the labor regulations
first arrival month to January period from the first
Vietnam arrival date to Vietnam
▶ Social insurance allowance paid by the social insurance authorities and
▶ Health care, entertainment, beauty services for collective employees
without mentioning any specific employee
▶ Second ta
ẽ x year onwards: calendar year
The following are examples of some benefits which are subject to PIT
concessional treatment:
Source: Point e.2, Clause 2, Article 26, Circular 111/2013/TT-BTC, issued by the MOF; Article 2, Circular No. 119/2014/
TT-BTC, dated 25 August 2014, issued by the MOF ▶ Accommodation and electricity, water and associated services provided
and arranged by the employer to the employee is taxed at the lower of the
actual expenses and 15% of the total taxable income (exclusive of house
Employment income allowance)
▶ Life insurance premiums paid by an employer for an employee is taxed at
All salary, allowances, bonuses and benefits in-kind are taxable unless a flat tax rate of 10%
specifically excluded.
The following are some examples of benefits not subject to PIT:
▶ One-off relocation allowance for expatriates to reside in Vietnam,
Vietnamese employees to work overseas or Vietnamese employees who
have long-term residence overseas to return to work in Vietnam
▶ Meal allowance in-kind (uncapped) or in cash (capped at VND730,000/month)
▶ Clothing allowance in-kind (uncapped) or in cash (capped at VND5 million/year)
Deductions Tax rates
Tax relieves for tax residents Tax rates on employment income
Monthly assessable
Residents (*) Non-residents
▶ Self relief: VND11 million/ income (INC) (VND million)
month
INC ≤ 5 5%
Family relief ▶ Dependent relief: VND4.4
million/dependent/month 5 < INC ≤ 10 10%
(registration of dependents
and submission of supporting
documents are required) 10 < INC ≤ 18 15%
20%
Charity/ 18 < INC ≤ 32 20%
Compulsory
humanitarian Deductions insurances
contributions 32 < INC ≤ 52 25%
52 < INC ≤ 80 30%
INC > 80 35%

Voluntary pension ▶ Capped at VND1 million/
contribution month on the contributions (*) Upon paying income of VND2 million or more to a tax resident who does not sign a labor contract or signs a labor
by both employer and contract with term of less than 3 months, the Vietnam-based income payer shall withhold PIT at 10% unless the income
employee payee provides a valid commitment on under-taxation-threshold-income. The progressive tax rates shall still be applied
on total annual employment income of the tax residents upon their tax finalizations.
Source: Clause 2 of Article 7, and Clause 1 of Article 18, Circular No. 111/2013/TT-BTC, dated 15 August 2013,
issued by the MOF
Source: Article 9 Circular No. 111/2013/TT-BTC, dated 15 August 2013, issued by the Ministry of Finance; Resolution
No. 954/2020/UBTVQH14 dated June 2, 2020 on changes to Personal Income Tax exemptions
Deductions Tax rates
Tax relieves for tax residents Tax rates on employment income
Monthly assessable
Residents (*) Non-residents
▶ Self relief: VND11 million/ income (INC) (VND million)
month
INC ≤ 5 5%
Family relief ▶ Dependent relief: VND4.4
million/dependent/month 5 < INC ≤ 10 10%
(registration of dependents
and submission of supporting
documents are required) 10 < INC ≤ 18 15%
20%
Charity/ 18 < INC ≤ 32 20%
Compulsory
humanitarian Deductions insurances
contributions 32 < INC ≤ 52 25%
52 < INC ≤ 80 30%
INC > 80 35%

Voluntary pension ▶ Capped at VND1 million/
contribution month on the contributions (*) Upon paying income of VND2 million or more to a tax resident who does not sign a labor contract or signs a labor
by both employer and contract with term of less than 3 months, the Vietnam-based income payer shall withhold PIT at 10% unless the income
employee payee provides a valid commitment on under-taxation-threshold-income. The progressive tax rates shall still be applied
on total annual employment income of the tax residents upon their tax finalizations.
Source: Clause 2 of Article 7, and Clause 1 of Article 18, Circular No. 111/2013/TT-BTC, dated 15 August 2013,
issued by the MOF
Source: Article 9 Circular No. 111/2013/TT-BTC, dated 15 August 2013, issued by the Ministry of Finance; Resolution
No. 954/2020/UBTVQH14 dated June 2, 2020 on changes to Personal Income Tax exemptions
Tax rates on non-employment income Tax declaration deadline
Types of income Residents Non-residents Description Deadlines
Business income 0.5% - 5% (based on 1% - 5% (based on type Tax registration Within 10 working days from the date the individual
type of business income) of business income) incurs tax obligation
Income from capital investment 5% 5% Monthly tax filing and payment By the 20th day following the reporting month
Quarterly tax filing and payment By the end of the month following the reporting quarter
Income from capital contribution 20% (on net gain) 0.1% (on sales proceeds)
transfer
Year-end finalization filing and By the last day of the third month from the end of
payment (withholding tax return) the tax year
Income from security transfer 0.1% (on sales proceeds) 0.1% (on sales proceeds)
Year-end finalization filing and By the last day of the fourth month from the end of
Income from real estate transfer 2% (on sales proceeds) 2% (on sales proceeds) payment (direct filing) the tax year (for tax year being the calendar year)
By the last day of the third month from the end of the
tax year (for other tax years)
Income from winning prize (*) 10% 10%
End of assignment finalization Prior to leaving Vietnam or within 45 days from the
Income from commercial franchises 5% 5% and payment repatriation from Vietnam in case of authorization
and copyright (*)
Submission of dependent By the finalization due date

Income from gifts and inheritance (*) 10% 10% registration (direct family member)
Submission of dependent By 31 December of the year

(*) PIT is imposed on the income amount portion in excess of VND10 million.
registration (others)
Source: Appendix 1, Circular No. 40/2021/TT-BTC; Articles 10, 11, 13, 14, 15, 16, 17, 19, 20, 21, 22, 23, Circular
111/2013/TT-BTC
Source: Clause 2, Article 33, Article 44, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019, issued by
the National Assembly of Vietnam; Point a.5, Clause 2, Article 16, Circular No. 156/2013/TT-BTC; Clause 3, Article 21,
Circular No. 92/2015/TT-BTC; Point c.2.3, Clause 1, Article 9, Circular No. 111/2013/TT-BTC
Tax rates on non-employment income Tax declaration deadline
Types of income Residents Non-residents Description Deadlines
Business income 0.5% - 5% (based on 1% - 5% (based on type Tax registration Within 10 working days from the date the individual
type of business income) of business income) incurs tax obligation
Income from capital investment 5% 5% Monthly tax filing and payment By the 20th day following the reporting month
Quarterly tax filing and payment By the end of the month following the reporting quarter
Income from capital contribution 20% (on net gain) 0.1% (on sales proceeds)
transfer
Year-end finalization filing and By the last day of the third month from the end of
payment (withholding tax return) the tax year
Income from security transfer 0.1% (on sales proceeds) 0.1% (on sales proceeds)
Year-end finalization filing and By the last day of the fourth month from the end of
Income from real estate transfer 2% (on sales proceeds) 2% (on sales proceeds) payment (direct filing) the tax year (for tax year being the calendar year)
By the last day of the third month from the end of the
tax year (for other tax years)
Income from winning prize (*) 10% 10%
End of assignment finalization Prior to leaving Vietnam or within 45 days from the
Income from commercial franchises 5% 5% and payment repatriation from Vietnam in case of authorization
and copyright (*)
Submission of dependent By the finalization due date

Income from gifts and inheritance (*) 10% 10% registration (direct family member)
Submission of dependent By 31 December of the year

(*) PIT is imposed on the income amount portion in excess of VND10 million.
registration (others)
Source: Appendix 1, Circular No. 40/2021/TT-BTC; Articles 10, 11, 13, 14, 15, 16, 17, 19, 20, 21, 22, 23, Circular
111/2013/TT-BTC
Source: Clause 2, Article 33, Article 44, Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019, issued by
the National Assembly of Vietnam; Point a.5, Clause 2, Article 16, Circular No. 156/2013/TT-BTC; Clause 3, Article 21,
Circular No. 92/2015/TT-BTC; Point c.2.3, Clause 1, Article 9, Circular No. 111/2013/TT-BTC
2.7
Transfer pricing
The tax authorities have the power to adjust the The Vietnamese regulations contain detailed TP documentation
value of purchases, sales, exchanges and accounting requirements. The documentation must be prepared before the
records of goods and services of taxpayers if that submission of the annual CIT return. It does not need to be filed
value is not in accordance with the arm’s length but must be submitted to the tax authority within 30 working days
principle. upon request by the tax authorities in a tax audit.
The Vietnamese transfer pricing requirements Taxpayers are obliged to comply with the three-tiered TP
are broadly consistent with those set out in the documentation requirement, in line with the OCED’s BEPS
OECD Transfer Pricing Guidelines for Multinational Action13, including:
Enterprises and Tax Administrations. However, it is ▶ Master file
worth noting that the acceptable arm’s length price ▶ Local file
under Vietnam’s transfer pricing regulation is a value ▶ Copy of CbCR prepared by the overseas ultimate parent
that falls within a range determined by the 35th to
company in accordance with the laws of the respective parent
75th percentile rather than the inter-quartile range,
company’s jurisdiction
which is the traditionally accepted range.
In addition, taxpayers are obliged to prepare and submit certain
The applicable transfer pricing methods under the
stipulated disclosure forms together with their CIT finalization
Vietnam’s transfer pricing regulations include:
returns. If transfer prices are found to be non-arm’s length or
▶ Comparable uncontrolled price method non-compliant, then the Vietnamese Tax Authorities may adjust
▶ Resale price method the transfer prices and assess additional taxes and penalties.
▶ Cost plus method
Companies seeking greater certainty may consider entering an
▶ Profit-split method or profit allocation method APA. The APA period is three years with a renewal of a maximum
▶ Comparable profit method (referred to as three years.
Transactional net margin method in the OECD
Transfer Pricing Guidelines).
2.7
Transfer pricing
The tax authorities have the power to adjust the The Vietnamese regulations contain detailed TP documentation
value of purchases, sales, exchanges and accounting requirements. The documentation must be prepared before the
records of goods and services of taxpayers if that submission of the annual CIT return. It does not need to be filed
value is not in accordance with the arm’s length but must be submitted to the tax authority within 30 working days
principle. upon request by the tax authorities in a tax audit.
The Vietnamese transfer pricing requirements Taxpayers are obliged to comply with the three-tiered TP
are broadly consistent with those set out in the documentation requirement, in line with the OCED’s BEPS
OECD Transfer Pricing Guidelines for Multinational Action13, including:
Enterprises and Tax Administrations. However, it is ▶ Master file
worth noting that the acceptable arm’s length price ▶ Local file
under Vietnam’s transfer pricing regulation is a value ▶ Copy of CbCR prepared by the overseas ultimate parent
that falls within a range determined by the 35th to
company in accordance with the laws of the respective parent
75th percentile rather than the inter-quartile range,
company’s jurisdiction
which is the traditionally accepted range.
In addition, taxpayers are obliged to prepare and submit certain
The applicable transfer pricing methods under the
stipulated disclosure forms together with their CIT finalization
Vietnam’s transfer pricing regulations include:
returns. If transfer prices are found to be non-arm’s length or
▶ Comparable uncontrolled price method non-compliant, then the Vietnamese Tax Authorities may adjust
▶ Resale price method the transfer prices and assess additional taxes and penalties.
▶ Cost plus method
Companies seeking greater certainty may consider entering an
▶ Profit-split method or profit allocation method APA. The APA period is three years with a renewal of a maximum
▶ Comparable profit method (referred to as three years.
Transactional net margin method in the OECD
Transfer Pricing Guidelines).
2.8
List of jurisdictions signed DTAs with Vietnam
Double taxation
avoidance
Algeria* Germany Malaysia Saudi Arabia
Australia Hong Kong Malta Serbia
Austria Hungary Mongolia Seychelles
Vietnam has signed 80 DTAs with Azerbaijan Iceland Morocco Singapore

jurisdictions that provide relief from Bangladesh India Mozambique Slovakia
double taxation. The table below
indicates jurisdictions that Vietnam Belarus Indonesia Myanmar Spain
has signed a DTA with. Belgium** Iran Netherlands Sri Lanka
Brunei Darussalam Ireland New Zealand Sweden
Bulgaria Israel Norway Switzerland
Cambodia Italy Oman Taiwan
Canada Japan Pakistan Thailand
China Mainland Kazakhstan Palestine Tunisia
Croatia North Korea Panama Turkey
Cuba South Korea** Philippines Ukraine
Czech Republic Kuwait Poland United Arab Emirates
Denmark Laos Portugal United Kingdom
Egypt* Latvia Qatar United States*
Estonia Luxembourg Romania Uruguay
Finland Macau Russia Uzbekistan
France Macedonia* San Marino Venezuela
Source: General Department of Taxation, http://www.gdt.gov.vn/, accessed 6 April 2021, EY compilation

(*) These DTAs are not yet in force
(**) The protocols amending these DTAs are not yet effective
2.8
List of jurisdictions signed DTAs with Vietnam
Double taxation
avoidance
Algeria* Germany Malaysia Saudi Arabia
Australia Hong Kong Malta Serbia
Austria Hungary Mongolia Seychelles
Vietnam has signed 80 DTAs with Azerbaijan Iceland Morocco Singapore

jurisdictions that provide relief from Bangladesh India Mozambique Slovakia
double taxation. The table below
indicates jurisdictions that Vietnam Belarus Indonesia Myanmar Spain
has signed a DTA with. Belgium** Iran Netherlands Sri Lanka
Brunei Darussalam Ireland New Zealand Sweden
Bulgaria Israel Norway Switzerland
Cambodia Italy Oman Taiwan
Canada Japan Pakistan Thailand
China Mainland Kazakhstan Palestine Tunisia
Croatia North Korea Panama Turkey
Cuba South Korea** Philippines Ukraine
Czech Republic Kuwait Poland United Arab Emirates
Denmark Laos Portugal United Kingdom
Egypt* Latvia Qatar United States*
Estonia Luxembourg Romania Uruguay
Finland Macau Russia Uzbekistan
France Macedonia* San Marino Venezuela
Source: General Department of Taxation, http://www.gdt.gov.vn/, accessed 6 April 2021, EY compilation

(*) These DTAs are not yet in force
(**) The protocols amending these DTAs are not yet effective
DTA application notification procedures Taxable objects and rates
Any benefit arising to a company under a DTA does not apply automatically. In The following table lists the goods and services to which SST applies. We note
order to take advantage of any relief under a DTA the taxpayer must submit a there are certain exemptions to this general list.
DTA application to the local tax authority 15 days before the tax payment due
date. However, this might not be strictly implemented in practice because DTA List of tax rates applicable for goods and services
application dossier would still be considered as long as it is within the three
years time limit. Goods Tax rate (%)
There are particular cases whereby the tax authority may reject the application
Cigarettes, other products derived from tobacco plants 75
under the DTA including:
Sprit/Wine 35-65
▶ The application for exemption/reduction is submitted more than three years
after the tax obligation arises Beer 65
▶ The transaction is solely for the purpose of enjoying DTA benefits Automobiles having fewer than 24 sears 5-150
▶ The applicant is not the true beneficiary of the tax payment being considered Motorcycles with cylinder capacity above 125cm3 20
for exemption/reduction Aircraft/Yacht 30
Gasoline 7-10
Mutual agreement procedures (MAP) Playing cards 40
A MAP process is available. All DTAs concluded by Vietnam incorporate a Votive papers and objects 70
provision on MAP. A MAP request has to be submitted within three years from
the date of receiving the first notice from the tax authority leading to the Services Tax rate (%)
tax treatment deemed by the complainant not to be in accordance with the
provisions of the DTA. For this, the complainant must fulfil all tax obligations Dancing club business 40
stated in the tax treatment decisions (which are tax administrative decisions, Massage, karaoke, betting business 30
tax notices, etc.) issued by tax authority before and during the process of Casino, electronic casino game business 35
settlement of MAP request.
2.9
Golf course business 20
Lottery business 15
Air-conditioners of 90,000 BTU or less (Except for ones 10
equipped on transport vehicles)
Special sales tax Source: Article 7, Law on Special Sales Tax No. 27/2008/QH12 dated 14 November 2008, issued by the National
Assembly of Vietnam; Item 2, Article 2, Law No. 106/2016/QH13 amending the Law on Value Added Tax, Law on Special
Sales Tax, and Law on Tax Administration, dated 06 April 2016, issued by the National Assembly of Vietnam
2.10
SST is an indirect tax imposed on certain special goods produced, traded, or
imported by enterprises in Vietnam
Taxpayer Business license fee

SST payers include producers and importers of goods and providers of services
which are subject to SST.
Exporters that purchase SST liable goods from producers for export and do There is a nominal tax (maximum amount VND3 million) on the registered capital
not export but sell them domestically shall also pay SST. (charter capital or invested capital) of an enterprise. It is collected annually.
DTA application notification procedures Taxable objects and rates
Any benefit arising to a company under a DTA does not apply automatically. In The following table lists the goods and services to which SST applies. We note
order to take advantage of any relief under a DTA the taxpayer must submit a there are certain exemptions to this general list.
DTA application to the local tax authority 15 days before the tax payment due
date. However, this might not be strictly implemented in practice because DTA List of tax rates applicable for goods and services
application dossier would still be considered as long as it is within the three
years time limit. Goods Tax rate (%)
There are particular cases whereby the tax authority may reject the application
Cigarettes, other products derived from tobacco plants 75
under the DTA including:
Sprit/Wine 35-65
▶ The application for exemption/reduction is submitted more than three years
after the tax obligation arises Beer 65
▶ The transaction is solely for the purpose of enjoying DTA benefits Automobiles having fewer than 24 sears 5-150
▶ The applicant is not the true beneficiary of the tax payment being considered Motorcycles with cylinder capacity above 125cm3 20
for exemption/reduction Aircraft/Yacht 30
Gasoline 7-10
Mutual agreement procedures (MAP) Playing cards 40
A MAP process is available. All DTAs concluded by Vietnam incorporate a Votive papers and objects 70
provision on MAP. A MAP request has to be submitted within three years from
the date of receiving the first notice from the tax authority leading to the Services Tax rate (%)
tax treatment deemed by the complainant not to be in accordance with the
provisions of the DTA. For this, the complainant must fulfil all tax obligations Dancing club business 40
stated in the tax treatment decisions (which are tax administrative decisions, Massage, karaoke, betting business 30
tax notices, etc.) issued by tax authority before and during the process of Casino, electronic casino game business 35
settlement of MAP request.
2.9
Golf course business 20
Lottery business 15
Air-conditioners of 90,000 BTU or less (Except for ones 10
equipped on transport vehicles)
Special sales tax Source: Article 7, Law on Special Sales Tax No. 27/2008/QH12 dated 14 November 2008, issued by the National
Assembly of Vietnam; Item 2, Article 2, Law No. 106/2016/QH13 amending the Law on Value Added Tax, Law on Special
Sales Tax, and Law on Tax Administration, dated 06 April 2016, issued by the National Assembly of Vietnam
2.10
SST is an indirect tax imposed on certain special goods produced, traded, or
imported by enterprises in Vietnam
Taxpayer Business license fee

SST payers include producers and importers of goods and providers of services
which are subject to SST.
Exporters that purchase SST liable goods from producers for export and do There is a nominal tax (maximum amount VND3 million) on the registered capital
not export but sell them domestically shall also pay SST. (charter capital or invested capital) of an enterprise. It is collected annually.
3 Customs duty
and procedures
Export duty Dutiable value

Most exported goods are exempt from export duty. Export duty is currently The dutiable value of imported and exported goods is the customs value which
only charged on certain items such as natural resources, wood, scrap metal, is determined in compliance with the WTO Valuation Agreement.
etc. The rates range from 0% to 40%.
Import duty Customs procedures

For imported goods, the applicable import duty rates vary depending on the Registration of a customs declaration with the customs office is required
type of goods imported (i.e., the HS codes of the goods) and the originating within 30 days from the date the imported goods arrive at the Vietnam
countries. check-points. Regarding exported goods, the customs declarations must be
registered with the customs office after the exported goods are available
In general, consumer goods, especially luxury goods, and goods that can
and must be at least four hours before the departure of the transport means
already be produced in Vietnam are subject to high import duties, while
or at least two hours before the departure of the aircrafts in case of goods
machinery, equipment, materials and supplies necessary for production are
exported via courier services. In practice, the export customs declarations are
subject to lower rates or even zero rated of import duties.
registered with the customs office at least one day before the departure of the
There are three types of import duty rates: transport means.
▶ Ordinary rates which are 150% of preferential rates (i.e. Most Favored
Customs declarations are subject to a risk assessment which will trigger
Nation rates)
different levels of inspection by the customs authorities (generally referred to
▶ Preferential rates for goods imported from countries that are WTO members as red, yellow, and green lane).
or countries that have Most Favored Nation treatment with Vietnam
Certain goods are banned from import/export or require the importer/exporter
▶ Special preferential rates for goods imported from jurisdictions having FTAs to obtain import and export permits from the governmental agencies.
in which Vietnam is a signing member (see details in page 80)
Other additional import duties that may be applied to imported goods include
anti-dumping tax, safeguard tax and anti-subsidy tax.
3 Customs duty
and procedures
Export duty Dutiable value

Most exported goods are exempt from export duty. Export duty is currently The dutiable value of imported and exported goods is the customs value which
only charged on certain items such as natural resources, wood, scrap metal, is determined in compliance with the WTO Valuation Agreement.
etc. The rates range from 0% to 40%.
Import duty Customs procedures

For imported goods, the applicable import duty rates vary depending on the Registration of a customs declaration with the customs office is required
type of goods imported (i.e., the HS codes of the goods) and the originating within 30 days from the date the imported goods arrive at the Vietnam
countries. check-points. Regarding exported goods, the customs declarations must be
registered with the customs office after the exported goods are available
In general, consumer goods, especially luxury goods, and goods that can
and must be at least four hours before the departure of the transport means
already be produced in Vietnam are subject to high import duties, while
or at least two hours before the departure of the aircrafts in case of goods
machinery, equipment, materials and supplies necessary for production are
exported via courier services. In practice, the export customs declarations are
subject to lower rates or even zero rated of import duties.
registered with the customs office at least one day before the departure of the
There are three types of import duty rates: transport means.
▶ Ordinary rates which are 150% of preferential rates (i.e. Most Favored
Customs declarations are subject to a risk assessment which will trigger
Nation rates)
different levels of inspection by the customs authorities (generally referred to
▶ Preferential rates for goods imported from countries that are WTO members as red, yellow, and green lane).
or countries that have Most Favored Nation treatment with Vietnam
Certain goods are banned from import/export or require the importer/exporter
▶ Special preferential rates for goods imported from jurisdictions having FTAs to obtain import and export permits from the governmental agencies.
in which Vietnam is a signing member (see details in page 80)
Other additional import duties that may be applied to imported goods include
anti-dumping tax, safeguard tax and anti-subsidy tax.
Exemption Authorized Economic Operator
Exemptions from import duty are granted for certain imported goods, some of An AEO can enjoy certain benefits such as:
which include: ▶ Fast-track customs clearance procedures (e.g., all customs declarations are
automatically allocated into green lane)
▶ Sector:
▶ Exemption from document submission and physical goods inspection
▶ Parts, components, materials that are not yet produced in Vietnam ▶ M
► onthly tax payment and submission of C/O (i.e. receive goods first and pay
imported for the assembly of automobiles
taxes later)
▶ Certain goods imported for oil and gas or shipbuilding activities ▶ Exemption from post-clearance audit (unless suspected of fraud)
▶ Materials and supplies that cannot be produced in Vietnam and imported
for direct use in production of IT products, digital contents and software Some of the conditions, among others, to be granted AEO status:
▶ Full compliance: no tax offence within two years before AEO application
▶ Certain goods imported/exported for environment protection activities
▶ High annual turnover of import/export volumes or being certified by the
▶ Goods imported for R&D or education purposes
Ministry of Science and Technology as high-tech enterprises
▶ Projects entitled to investment incentives: AEO status is valid for three years and can be extended subject to Customs’ assessment.
▶ Machinery and equipment, special means of transportation and
construction materials which are not yet produced in Vietnam imported
to form fixed assets of the projects Export Processing Enterprise
▶ Materials and parts that are not yet produced in Vietnam imported to
serve the manufacturing activity of the projects within 5 years from the Enterprises that produce goods for export may register to be an Export
date of production commencement Processing Enterprise. An EPE means a company established and operated
within an Export Processing Zone or an enterprise specializing in manufacturing
▶ Business scheme: exported products within an industrial park or an economic zone. Goods which
▶ Goods imported under toll manufacturing or contract manufacturing are imported into the EPE and consumed within the EPE are not subject to
models (i.e. goods imported for the production of exported goods) customs duty and VAT. Goods exported from the EPE to overseas markets are
▶ Goods temporarily imported within a certain period of time and not subject to export duty.
subsequently re-exported (with some exceptions)
In order to register as an EPE, the registrant company must satisfy the
▶ Low value goods: requirements for customs supervision, e.g. must have hard fences to separate
▶ Gifts within the respective prescribed limits for individuals and entities the company with the outside area or must have 24/7 operating cameras, etc.
▶ Non-commercial goods, e.g., samples, pictures, videos, models and
advertisement publications in small quantities
Customs inspection and audits
Post-clearance audits are common in Vietnam as customs authorities would
Refunds like to facilitate the customs clearance process for companies’ exported and
imported goods and the customs authorities conduct post-clearance audits
Import/export duties may be refunded in some cases such as: to monitor companies’ compliance with customs regulations. Needless to say,
▶ Import duties paid on imported goods which are later exported overseas or customs inspection is also focused during customs clearance process based on
non-tariff zones risk management principles.
▶ Export duties paid on exported goods which are later re-imported During customs audits, customs authorities focus on the following customs
compliance areas:
▶ Import duties paid on materials imported to produce goods that are
subsequently exported
▶ Inventory balance and the use of the duty-exempted imported goods
▶ Import/export duties paid on imported/exported goods but the goods are
▶ HS classification
actually imported/exported with a quantity smaller than the quantity on ▶ C
► ustoms valuation
which duty was paid ▶ Goods’ origin
▶ Eligibility for export-import duty exemption
Exemption Authorized Economic Operator
Exemptions from import duty are granted for certain imported goods, some of An AEO can enjoy certain benefits such as:
which include: ▶ Fast-track customs clearance procedures (e.g., all customs declarations are
automatically allocated into green lane)
▶ Sector:
▶ Exemption from document submission and physical goods inspection
▶ Parts, components, materials that are not yet produced in Vietnam ▶ M
► onthly tax payment and submission of C/O (i.e. receive goods first and pay
imported for the assembly of automobiles
taxes later)
▶ Certain goods imported for oil and gas or shipbuilding activities ▶ Exemption from post-clearance audit (unless suspected of fraud)
▶ Materials and supplies that cannot be produced in Vietnam and imported
for direct use in production of IT products, digital contents and software Some of the conditions, among others, to be granted AEO status:
▶ Full compliance: no tax offence within two years before AEO application
▶ Certain goods imported/exported for environment protection activities
▶ High annual turnover of import/export volumes or being certified by the
▶ Goods imported for R&D or education purposes
Ministry of Science and Technology as high-tech enterprises
▶ Projects entitled to investment incentives: AEO status is valid for three years and can be extended subject to Customs’ assessment.
▶ Machinery and equipment, special means of transportation and
construction materials which are not yet produced in Vietnam imported
to form fixed assets of the projects Export Processing Enterprise
▶ Materials and parts that are not yet produced in Vietnam imported to
serve the manufacturing activity of the projects within 5 years from the Enterprises that produce goods for export may register to be an Export
date of production commencement Processing Enterprise. An EPE means a company established and operated
within an Export Processing Zone or an enterprise specializing in manufacturing
▶ Business scheme: exported products within an industrial park or an economic zone. Goods which
▶ Goods imported under toll manufacturing or contract manufacturing are imported into the EPE and consumed within the EPE are not subject to
models (i.e. goods imported for the production of exported goods) customs duty and VAT. Goods exported from the EPE to overseas markets are
▶ Goods temporarily imported within a certain period of time and not subject to export duty.
subsequently re-exported (with some exceptions)
In order to register as an EPE, the registrant company must satisfy the
▶ Low value goods: requirements for customs supervision, e.g. must have hard fences to separate
▶ Gifts within the respective prescribed limits for individuals and entities the company with the outside area or must have 24/7 operating cameras, etc.
▶ Non-commercial goods, e.g., samples, pictures, videos, models and
advertisement publications in small quantities
Customs inspection and audits
Post-clearance audits are common in Vietnam as customs authorities would
Refunds like to facilitate the customs clearance process for companies’ exported and
imported goods and the customs authorities conduct post-clearance audits
Import/export duties may be refunded in some cases such as: to monitor companies’ compliance with customs regulations. Needless to say,
▶ Import duties paid on imported goods which are later exported overseas or customs inspection is also focused during customs clearance process based on
non-tariff zones risk management principles.
▶ Export duties paid on exported goods which are later re-imported During customs audits, customs authorities focus on the following customs
compliance areas:
▶ Import duties paid on materials imported to produce goods that are
subsequently exported
▶ Inventory balance and the use of the duty-exempted imported goods
▶ Import/export duties paid on imported/exported goods but the goods are
▶ HS classification
actually imported/exported with a quantity smaller than the quantity on ▶ C
► ustoms valuation
which duty was paid ▶ Goods’ origin
▶ Eligibility for export-import duty exemption
Free trade agreements Source: Website of WTO Center under Vietnam Chamber of Commerce and Industry at https://www.trungtamwto. vn/,
accessed 6 April 2021; EY compilation.
Notes:
Vietnam is a signing member of the following FTAs: (*) The CPTPP Agreement officially took effect on 30 December 2018. The CPTPP took effect in Vietnam on 14
January 2019.
(**) RCEP was signed on 15 November 2020 and will enter into force 60 days after six ASEAN Member States and three
FTAs Signing members non-ASEAN Member States have ratified the Agreement.
(***) The UKVFTA was signed on 29 December 2020. The Agreement has been temporarily applied from 23:00 p.m. on
31 December 2020 GMT or 6 a.m. on 1 January 2021, Vietnam time and officially took effect on 1 May 2021.
ASEAN Trade in Goods Agreement 10 ASEAN member countries (Brunei,
(ATIGA) Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand, Vietnam)
In addition to the FTAs, Vietnam has also signed trade agreements with
Comprehensive and Progressive Australia, Brunei, Canada, Chile, Japan, Cambodia, Cuba, Laos.
Agreement for Trans-Pacific Malaysia, Mexico, New Zealand, Peru,
Partnership (CPTPP) Singapore, and Vietnam (*)
ASEAN – Japan Comprehensive 10 ASEAN member countries and Japan Proof of origin
Economic Partnership (AJCEP)
Proof of origin is required when the exporters/importers claim special
ASEAN - Korea FTA (AKFTA) 10 ASEAN member countries and Korea Republic preferential duty rates under FTAs or trade agreements. Some commodities
must be accompanied with proof of origin when they are imported into
ASEAN – India FTA (AIFTA) 10 ASEAN member countries and India
Vietnam even the preferential tariffs are not available for such commodities.
ASEAN – China FTA (ACFTA) 10 ASEAN member countries and China Mainland
Proof of origin can be in the form of a paper Certificate of Origin (C/O or COO),
an origin statement or self-certification, or an electronic C/O. Each FTA has its
ASEAN - Hong Kong FTA (AHKFTA) 10 ASEAN member countries and Hong Kong own required form of proof of origin.
Generally exported goods are not required to have a proof of origin. Proof of
ASEAN - Australia - New Zealand 10 ASEAN member countries and Australia,
(AANZFTA) New Zealand origin for exported goods is applied by exporters for the importing partners to
enjoy preferential import tariffs in importing countries.
Vietnam – Chile FTA (VCFTA) Vietnam, Chile
Vietnam – Korea FTA (VKFTA) Vietnam, Korea Republic
Vietnam – Japan Economic Vietnam, Japan

Partnership Agreement (VJEPA)
Vietnam - Eurasian Economic Union Vietnam, Armenia, Belarus, Kazakhstan,

FTA (VN-EAEU FTA) Kyrgyzstan and Russia
Vietnam – European Union FTA (EVFTA) Vietnam, 27 EU member states

*Goods exported from Vietnam to the EU
are still entitled to GSP benefits until 31
December 2022
Regional Comprehensive Economic 10 ASEAN member countries and Australia,

Partnership (RCEP) (**) China Mainland, Japan, Korea, and New Zealand
Vietnam – UK FTA (UKVFTA) (***) Vietnam, the United Kingdom
Free trade agreements Source: Website of WTO Center under Vietnam Chamber of Commerce and Industry at https://www.trungtamwto. vn/,
accessed 6 April 2021; EY compilation.
Notes:
Vietnam is a signing member of the following FTAs: (*) The CPTPP Agreement officially took effect on 30 December 2018. The CPTPP took effect in Vietnam on 14
January 2019.
(**) RCEP was signed on 15 November 2020 and will enter into force 60 days after six ASEAN Member States and three
FTAs Signing members non-ASEAN Member States have ratified the Agreement.
(***) The UKVFTA was signed on 29 December 2020. The Agreement has been temporarily applied from 23:00 p.m. on
31 December 2020 GMT or 6 a.m. on 1 January 2021, Vietnam time and officially took effect on 1 May 2021.
ASEAN Trade in Goods Agreement 10 ASEAN member countries (Brunei,
(ATIGA) Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand, Vietnam)
In addition to the FTAs, Vietnam has also signed trade agreements with
Comprehensive and Progressive Australia, Brunei, Canada, Chile, Japan, Cambodia, Cuba, Laos.
Agreement for Trans-Pacific Malaysia, Mexico, New Zealand, Peru,
Partnership (CPTPP) Singapore, and Vietnam (*)
ASEAN – Japan Comprehensive 10 ASEAN member countries and Japan Proof of origin
Economic Partnership (AJCEP)
Proof of origin is required when the exporters/importers claim special
ASEAN - Korea FTA (AKFTA) 10 ASEAN member countries and Korea Republic preferential duty rates under FTAs or trade agreements. Some commodities
must be accompanied with proof of origin when they are imported into
ASEAN – India FTA (AIFTA) 10 ASEAN member countries and India
Vietnam even the preferential tariffs are not available for such commodities.
ASEAN – China FTA (ACFTA) 10 ASEAN member countries and China Mainland
Proof of origin can be in the form of a paper Certificate of Origin (C/O or COO),
an origin statement or self-certification, or an electronic C/O. Each FTA has its
ASEAN - Hong Kong FTA (AHKFTA) 10 ASEAN member countries and Hong Kong own required form of proof of origin.
Generally exported goods are not required to have a proof of origin. Proof of
ASEAN - Australia - New Zealand 10 ASEAN member countries and Australia,
(AANZFTA) New Zealand origin for exported goods is applied by exporters for the importing partners to
enjoy preferential import tariffs in importing countries.
Vietnam – Chile FTA (VCFTA) Vietnam, Chile
Vietnam – Korea FTA (VKFTA) Vietnam, Korea Republic
Vietnam – Japan Economic Vietnam, Japan

Partnership Agreement (VJEPA)
Vietnam - Eurasian Economic Union Vietnam, Armenia, Belarus, Kazakhstan,

FTA (VN-EAEU FTA) Kyrgyzstan and Russia
Vietnam – European Union FTA (EVFTA) Vietnam, 27 EU member states

*Goods exported from Vietnam to the EU
are still entitled to GSP benefits until 31
December 2022
Regional Comprehensive Economic 10 ASEAN member countries and Australia,

Partnership (RCEP) (**) China Mainland, Japan, Korea, and New Zealand
Vietnam – UK FTA (UKVFTA) (***) Vietnam, the United Kingdom
Human resources
and employment
1
Overview of workforce
of Vietnam in 2020
97.58 million people

Accounting for 1.26 percent of the world population.
Ranking No. 15 in the most populous countries (*)
36.3% 32.8%
working in working in Agriculture,
Service Sector Forestry and Fisheries Sector
30.9%
working in Industry Sector
(**)
54.8 million 4.88%

Working age An increase in
population aged 15 annual productivity
and above in 2020 (*)
(**)
24.1%
The proportion of
trained workforce
with diplomas and
certificates in 2020
(**)
(*) Source: Foreign Investment Agency, Ministry of Planning and Investment, 1
December 2020
(**) Source: Report on labor workforce in Vietnam in Q4 and the year 2020 by
MOLISA & GSO
82 83
Human resources
and employment
1
Overview of workforce
of Vietnam in 2020
97.58 million people

Accounting for 1.26 percent of the world population.
Ranking No. 15 in the most populous countries (*)
36.3% 32.8%
working in working in Agriculture,
Service Sector Forestry and Fisheries Sector
30.9%
working in Industry Sector
(**)
54.8 million 4.88%

Working age An increase in
population aged 15 annual productivity
and above in 2020 (*)
(**)
24.1%
The proportion of
trained workforce
with diplomas and
certificates in 2020
(**)
(*) Source: Foreign Investment Agency, Ministry of Planning and Investment, 1
December 2020
(**) Source: Report on labor workforce in Vietnam in Q4 and the year 2020 by
MOLISA & GSO
82 83
2
Overview of workforce in IT field in 2020
Working time
Mostly located in Ho Chi Minh City (55%) and Hanoi (29%)
▶ The standard working hours should not exceed 8 hours per day or 48 hours
74% of IT workforce holding bachelor degree per week.
▶ An employer has the right to determine the daily or weekly working hours.
However, the daily working hours should not exceed 10 hours per day or 48
hours per week where a weekly basis is applied.
86% of IT workforce holding more than two international IT certificates ▶ Overtime hours of an employee should not exceed 50% of the normal
(PMP, MCSE, CISM, CISA, etc.)
working hours in a single day.
▶ In case of weekly work, the total normal working hours plus overtime
working hours should not exceed 12 hours a day or 40 hours a month.
More than 60% of IT workforce reaching intermediate level and above ▶ The total overtime working hours should not exceed 200 hours a year,
in English except in the following cases where an employer may request an employee
to work overtime for up to 300 hours in a year provided the employer has
first submitted a written notification to the provincial labor authority and
obtained agreement from the employee:
53% of IT workforce with 5-year working experience and above
▶ Manufacture, processing of textile, garment, footwear, electric,
electronic products, processing of agricultural, forestry, aquaculture
products, salt production
Source: Report on IT workforce in 2020 by Vietnamworks
▶ Generation and supply of electricity, telecommunications, refinery
operation water supply and drainage
▶ Works that require highly skilled workers that are not available on the
labor market at the time
▶ Urgent works that cannot be delayed due to seasonal reasons or
availability of materials or products, or due to unexpected causes, bad
weather, natural disasters, fire, hostility, shortage of power or raw
materials, or technical issue of the production line
▶ Other cases prescribed by the Government
Leave days:
▶ Certain types of leave are paid for by the employer: Public holidays, Annual
leave and Personal paid leave.
▶ Certain other types of leave are paid for by Social Insurance Agency.
2
Overview of workforce in IT field in 2020
Working time
Mostly located in Ho Chi Minh City (55%) and Hanoi (29%)
▶ The standard working hours should not exceed 8 hours per day or 48 hours
74% of IT workforce holding bachelor degree per week.
▶ An employer has the right to determine the daily or weekly working hours.
However, the daily working hours should not exceed 10 hours per day or 48
hours per week where a weekly basis is applied.
86% of IT workforce holding more than two international IT certificates ▶ Overtime hours of an employee should not exceed 50% of the normal
(PMP, MCSE, CISM, CISA, etc.)
working hours in a single day.
▶ In case of weekly work, the total normal working hours plus overtime
working hours should not exceed 12 hours a day or 40 hours a month.
More than 60% of IT workforce reaching intermediate level and above ▶ The total overtime working hours should not exceed 200 hours a year,
in English except in the following cases where an employer may request an employee
to work overtime for up to 300 hours in a year provided the employer has
first submitted a written notification to the provincial labor authority and
obtained agreement from the employee:
53% of IT workforce with 5-year working experience and above
▶ Manufacture, processing of textile, garment, footwear, electric,
electronic products, processing of agricultural, forestry, aquaculture
products, salt production
Source: Report on IT workforce in 2020 by Vietnamworks
▶ Generation and supply of electricity, telecommunications, refinery
operation water supply and drainage
▶ Works that require highly skilled workers that are not available on the
labor market at the time
▶ Urgent works that cannot be delayed due to seasonal reasons or
availability of materials or products, or due to unexpected causes, bad
weather, natural disasters, fire, hostility, shortage of power or raw
materials, or technical issue of the production line
▶ Other cases prescribed by the Government
Leave days:
▶ Certain types of leave are paid for by the employer: Public holidays, Annual
leave and Personal paid leave.
▶ Certain other types of leave are paid for by Social Insurance Agency.
Certain types of leave in Vietnam
Annual leave
Public holidays From 12 to 16 working days per
year for employees who have been
Vietnamese: 11 public holidays working for an employer for
per year 12 months, depending on their
working conditions and type of work
Foreigners: 1 traditional New Year
holiday and 1 Independence Day Annual leave shall be increased by
of their country, in addition to the 1 day for every 5 years of
mentioned 11 public holidays employment with the same employer
Leave paid by SI Agency Personal paid leave

Pregnant check: 5 working days Marriage: 3 working days
Miscarriage: up to 50 days Marriage of child: 1 working day
Maternity leave: 6 months Death of parents, spouse’s parents,
Contraception: up to 15 days spouse or child: 1 working day
Parental leave: from 5 to 14 working days

Child sickness (under 7 years old):
up to 20 working days depending on
child’s age
Self-sickness: up to 60 working days Source: Article 112, 113 and 115, Labour Code
for short day and up to 180 days for No. 45/2019/QH14, dated 20 November 2019,
long day issued by the National Assembly of Vietnam; Article
26, 27, 29, 41 and from 32 to 37, Law on Social
Convalescence: up to 10 days Insurance No. 58/2014/QH13, dated 20 November
2014, issued by the National Assembly of Vietnam
3Summary of salary
scale by region
The minimum salary by region ranges from VND3,070,000 to
VND4,420,000 per month and varies for each city and province.
The above minimum salary applies from 1 January 2020.
Certain types of leave in Vietnam
Annual leave
Public holidays From 12 to 16 working days per
year for employees who have been
Vietnamese: 11 public holidays working for an employer for
per year 12 months, depending on their
working conditions and type of work
Foreigners: 1 traditional New Year
holiday and 1 Independence Day Annual leave shall be increased by
of their country, in addition to the 1 day for every 5 years of
mentioned 11 public holidays employment with the same employer
Leave paid by SI Agency Personal paid leave

Pregnant check: 5 working days Marriage: 3 working days
Miscarriage: up to 50 days Marriage of child: 1 working day
Maternity leave: 6 months Death of parents, spouse’s parents,
Contraception: up to 15 days spouse or child: 1 working day
Parental leave: from 5 to 14 working days

Child sickness (under 7 years old):
up to 20 working days depending on
child’s age
Self-sickness: up to 60 working days Source: Article 112, 113 and 115, Labour Code
for short day and up to 180 days for No. 45/2019/QH14, dated 20 November 2019,
long day issued by the National Assembly of Vietnam; Article
26, 27, 29, 41 and from 32 to 37, Law on Social
Convalescence: up to 10 days Insurance No. 58/2014/QH13, dated 20 November
2014, issued by the National Assembly of Vietnam
3Summary of salary
scale by region
The minimum salary by region ranges from VND3,070,000 to
VND4,420,000 per month and varies for each city and province.
The above minimum salary applies from 1 January 2020.
4
The unemployment insurance contribution is only required for Vietnamese
Social, health and employees and calculated based on the salary or wage, allowance and
additional payments stated in the labor contract. However, it is capped
unemployment insurance at 20 times the regional minimum salary, which currently ranges from
VND3,070,000 to VND4,420,000.
The base salary subject to compulsory insurance is not lower than minimum
regional salary at the contribution time for an employee doing work that does
The following are the statutory contribution rates for employers and not require any qualifications or degrees and are performed under normal
employees with respect to social security, health insurance and unemployment working conditions.
insurance from 1 January 2020:
The base salary subject to the compulsory insurance contribution is at least
Statutory contribution rates for employers and employees 7% higher than the minimum regional salary for employees doing jobs
requiring vocational training.
Occupational
Social Health Unemployment
diseases & Total
Currently the social insurance applies for foreigners who sign labor contracts
Insurance Insurance Insurance with Vietnamese entities with a term of 12 months or more and have a work
accident fund
permit or practice license or certificate.
5
% % % % %
Vietnamese
Employer 17 3 1 0.5 21.5
Employee 8 1.5 1 - 10.5 Recruitment & Termination

Total 25 4.5 2 0.5 32
of employment
Employer 3 3 - 0.5 6.5
Until 31
Employee - 1.5 - - 1.5
Recruitment, probation and labor contract
December
2021
Fo r e i g n e r
Total 3 4.5 - 0.5 8

Recruitment ▶
▶ Probation ▶
▶ Labor contract
Employer 17 3 - 0.5 20.5 Employers have the right Only one probationary There are two types of
From 1 to recruit employees period is allowed for a job labor contracts:
January
Employee 8 1.5 - - 9.5 directly or through and shall not exceed: An indefinite-term labor
2022
onward
employment agencies or 180 days for enterprise contract;
Total 25 4.5 - 0.5 30 dispatching agencies executive position A definite-term labor
Employees shall not pay 60 days for positions that contract, with a duration of
any recruitment cost. require college degree or up to 36 months
Source: Article 5, Decision No. 595/QD-BHXH, dated 14 April 2017, issued by the General Director of Vietnam Social above; A definite-term labor
Security; Article 12 and 13, Decree No. 143/2018/ND-CP, dated 15 October 2018, issued by the Government
30 days for positions contract can be renewed
that require a vocational only 1 time except for
The social and health insurance contribution is calculated based on the salary certificate, technicians, foreigners, directors of
and skilled employees; state-invested enterprises,
or wage, allowance and additional payments stated in the labor contract. elderly people, members of
06 working days for other
However, it is capped at 20 times the standard minimum salary provided by jobs. the management boards.
the Government. The current capped salary for the social and health insurance of the representative
contribution is VND29,800,000 (VND1,490,000 x 20). The common minimum organizations.
salary may change from year to year according to the government’s decision.
Source: Article 11, 20 and 25, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National
Assembly of Vietnam
4
The unemployment insurance contribution is only required for Vietnamese
Social, health and employees and calculated based on the salary or wage, allowance and
additional payments stated in the labor contract. However, it is capped
unemployment insurance at 20 times the regional minimum salary, which currently ranges from
VND3,070,000 to VND4,420,000.
The base salary subject to compulsory insurance is not lower than minimum
regional salary at the contribution time for an employee doing work that does
The following are the statutory contribution rates for employers and not require any qualifications or degrees and are performed under normal
employees with respect to social security, health insurance and unemployment working conditions.
insurance from 1 January 2020:
The base salary subject to the compulsory insurance contribution is at least
Statutory contribution rates for employers and employees 7% higher than the minimum regional salary for employees doing jobs
requiring vocational training.
Occupational
Social Health Unemployment
diseases & Total
Currently the social insurance applies for foreigners who sign labor contracts
Insurance Insurance Insurance with Vietnamese entities with a term of 12 months or more and have a work
accident fund
permit or practice license or certificate.
5
% % % % %
Vietnamese
Employer 17 3 1 0.5 21.5
Employee 8 1.5 1 - 10.5 Recruitment & Termination

Total 25 4.5 2 0.5 32
of employment
Employer 3 3 - 0.5 6.5
Until 31
Employee - 1.5 - - 1.5
Recruitment, probation and labor contract
December
2021
Fo r e i g n e r
Total 3 4.5 - 0.5 8

Recruitment ▶
▶ Probation ▶
▶ Labor contract
Employer 17 3 - 0.5 20.5 Employers have the right Only one probationary There are two types of
From 1 to recruit employees period is allowed for a job labor contracts:
January
Employee 8 1.5 - - 9.5 directly or through and shall not exceed: An indefinite-term labor
2022
onward
employment agencies or 180 days for enterprise contract;
Total 25 4.5 - 0.5 30 dispatching agencies executive position A definite-term labor
Employees shall not pay 60 days for positions that contract, with a duration of
any recruitment cost. require college degree or up to 36 months
Source: Article 5, Decision No. 595/QD-BHXH, dated 14 April 2017, issued by the General Director of Vietnam Social above; A definite-term labor
Security; Article 12 and 13, Decree No. 143/2018/ND-CP, dated 15 October 2018, issued by the Government
30 days for positions contract can be renewed
that require a vocational only 1 time except for
The social and health insurance contribution is calculated based on the salary certificate, technicians, foreigners, directors of
and skilled employees; state-invested enterprises,
or wage, allowance and additional payments stated in the labor contract. elderly people, members of
06 working days for other
However, it is capped at 20 times the standard minimum salary provided by jobs. the management boards.
the Government. The current capped salary for the social and health insurance of the representative
contribution is VND29,800,000 (VND1,490,000 x 20). The common minimum organizations.
salary may change from year to year according to the government’s decision.
Source: Article 11, 20 and 25, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National
Assembly of Vietnam
Termination of employment
1 4 7 9
The contract expires The employee is sentenced Employees/ Employers Foreign employee working
or the agreed work to imprisonment without unilaterally terminate the in Vietnam is deported
in the contract has suspended sentence or not labor contract in accordance under a legally effective
been completed in the case of being set free, with law. judgment or ruling of a
without agreement on is sentenced to death or is court, decision of relevant
extension, modification prohibited from performing competent state agency.
or amendment. the job stated in the labor
contract under a legally
effective judgment or ruling of
a court.
2 5 8 10
Both parties agree to The individual employer dies; is The employee is The work permit of foreign
terminate declared by a court to have lost dismissed. employee working in
civil act capacity, be missing or Vietnam is invalid
dead. The employer who is not
individual has been liquidated
or the provincial business
registration authority declared
that the legal representative
of the employer does not
implement the rights and
obligations in accordance with
the law
3 6 11
The individual employee The employer lays off the The employee fails to
dies; is declared by a employee due to structural perform his/her tasks
court to have lost civil or technological changes or during the probationary
act capacity, be missing because of economic reasons, period under the
or dead merger, consolidation or division employment contract or
of the enterprise, sale, lease, gives up the probation.
conversion of business type,
transfer of ownership or rights
to use other business asset.
Source: Article 34, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly
of Vietnam
Termination of employment
1 4 7 9
The contract expires The employee is sentenced Employees/ Employers Foreign employee working
or the agreed work to imprisonment without unilaterally terminate the in Vietnam is deported
in the contract has suspended sentence or not labor contract in accordance under a legally effective
been completed in the case of being set free, with law. judgment or ruling of a
without agreement on is sentenced to death or is court, decision of relevant
extension, modification prohibited from performing competent state agency.
or amendment. the job stated in the labor
contract under a legally
effective judgment or ruling of
a court.
2 5 8 10
Both parties agree to The individual employer dies; is The employee is The work permit of foreign
terminate declared by a court to have lost dismissed. employee working in
civil act capacity, be missing or Vietnam is invalid
dead. The employer who is not
individual has been liquidated
or the provincial business
registration authority declared
that the legal representative
of the employer does not
implement the rights and
obligations in accordance with
the law
3 6 11
The individual employee The employer lays off the The employee fails to
dies; is declared by a employee due to structural perform his/her tasks
court to have lost civil or technological changes or during the probationary
act capacity, be missing because of economic reasons, period under the
or dead merger, consolidation or division employment contract or
of the enterprise, sale, lease, gives up the probation.
conversion of business type,
transfer of ownership or rights
to use other business asset.
Source: Article 34, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly
of Vietnam
Employer unilaterally terminates the contract Employee unilaterally terminates the contract
Circumstances where an employer has the right to unilaterally terminate Circumstances where an employee has the right to unilaterally terminate
an employment contract an employment contract
1The employee
2The employee
3In the event
4The employee is
1Is not assigned
2
Is not paid
3
Is maltreated,
4
The employee
5
The employee
repeatedly fails to is sick or has of a natural not present at the to the work or adequately or assaulted, or their families is elected to
perform his or her an accident and disaster, fire, workplace after workplace or on schedule as physically or are in difficult a full-time
work as agreed in remains unable to major epidemic, the time limit of not provided agreed in the verbally insulted circumstances position in an
the employment work after having hostility, relocation the temporary with the employment by the employer which prevent elected body
contract. received treatment or downsizing suspension of working contract. in a manner them from or is appointed
for a period of requested by the employment conditions as that affects performing to a position
6-12 consecutive a competent contract agreed in the the employee’s labor contracts in the state
months or more authority, the employment health, dignity (taking care of apparatus
than half of the employer has to lay contract or honor; their families,
duration of the off employees after is sexually relocating
contract in case of all possibilities have harassed in the due to natural
seasonal contract. been exhausted. workplace. disasters, fires)
The employer shall Upon recovery,

5
The employee
6
The employee fails
6Is pregnant
7
The employee
8
Employees
9 10
The employer May unilaterally
establish criteria the employer may fails to go to work to provide truthful and has to is sick or has an who suffer fails to provide terminate the
for assessment consider entering without acceptable information related stop working accident and from sexual truthful employment
of employees’ into another excuses for at least to their name, under remains unable harassment in information contract,
fulfillment of duties employment five consecutive date of birth, sex, confirmation to work after the workplace related to subject to prior
as a basis for contract with the working days. education level, from a having received (sexual work, place notice to the
consideration. employee health condition, competent regularly harassment is of work, work employer.
etc. health facility treatment a sexual nature hours, salary,
of any person insurance, etc.
to another
person at work
without being
accepted).
Source: Article 36, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly Source: Article 35, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly
of Vietnam of Vietnam
Employer unilaterally terminates the contract Employee unilaterally terminates the contract
Circumstances where an employer has the right to unilaterally terminate Circumstances where an employee has the right to unilaterally terminate
an employment contract an employment contract
1The employee
2The employee
3In the event
4The employee is
1Is not assigned
2
Is not paid
3
Is maltreated,
4
The employee
5
The employee
repeatedly fails to is sick or has of a natural not present at the to the work or adequately or assaulted, or their families is elected to
perform his or her an accident and disaster, fire, workplace after workplace or on schedule as physically or are in difficult a full-time
work as agreed in remains unable to major epidemic, the time limit of not provided agreed in the verbally insulted circumstances position in an
the employment work after having hostility, relocation the temporary with the employment by the employer which prevent elected body
contract. received treatment or downsizing suspension of working contract. in a manner them from or is appointed
for a period of requested by the employment conditions as that affects performing to a position
6-12 consecutive a competent contract agreed in the the employee’s labor contracts in the state
months or more authority, the employment health, dignity (taking care of apparatus
than half of the employer has to lay contract or honor; their families,
duration of the off employees after is sexually relocating
contract in case of all possibilities have harassed in the due to natural
seasonal contract. been exhausted. workplace. disasters, fires)
The employer shall Upon recovery,

5
The employee
6
The employee fails
6Is pregnant
7
The employee
8
Employees
9 10
The employer May unilaterally
establish criteria the employer may fails to go to work to provide truthful and has to is sick or has an who suffer fails to provide terminate the
for assessment consider entering without acceptable information related stop working accident and from sexual truthful employment
of employees’ into another excuses for at least to their name, under remains unable harassment in information contract,
fulfillment of duties employment five consecutive date of birth, sex, confirmation to work after the workplace related to subject to prior
as a basis for contract with the working days. education level, from a having received (sexual work, place notice to the
consideration. employee health condition, competent regularly harassment is of work, work employer.
etc. health facility treatment a sexual nature hours, salary,
of any person insurance, etc.
to another
person at work
without being
accepted).
Source: Article 36, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly Source: Article 35, Labour Code No. 45/2019/QH14, dated 20 November 2019, issued by the National Assembly
of Vietnam of Vietnam
6Work permit
and visa application
Procedure and standard timeline for Work permit and Visa application
Submit the demand for Submit work Submit visa application

using foreign nationals permit application
Submitted by: sponsoring Received by: local DOLISA Received by: Immigration
entity in Vietnam authority
Deadline: at least 15
Received by: government’s business days before the Only be granted after the
body expected commencement applicant enters Vietnam
date using the correct visa
days before recruiting or Processing time at the Processing time at the local
transferring the foreign local authority: 5 business authority: 5 business days
Employment of foreigners nationals to work in days from date of filing
Vietnam
Requirements for employment of foreigners
Only employ foreigners to hold positions of managers, executive directors,
specialists and technical workers with the professional requirements which
cannot be met by Vietnamese workers.
Recruitment of foreign employees in Vietnam shall be subject to written
approval by competent authorities
Acceptance or refusal Submit labor visa
of the demand application
Work permit
The maximum duration of a work permit is two years. Work permit can only Approved by: local DOLISA Received by: Immigration
be extended one time with the maximum duration of two years. authority
Received by: sponsoring
After the work permit has expired, foreign workers have to ask for the grant entity in Vietnam Processing time at the local
of new work permit. authority: 5 business days
Deadline: Within 15 days
from date of filing
after receiving the demand
Labor contract
The duration of a foreign employee’s employment contract must not exceed
that of the work permit Source: Decree No. 152/2020/ND-CP, dated 30 December 2020, issued by the Government; Law on Entry, exit, transit,
A definite-term employment contract may be entered multiple times with and residence of foreigners in Vietnam No. 47/2014/QH13, dated 16 June 2014, issued by the National Assembly of
Vietnam; Law No. 51/2019/QH14, dated 25 November 2019, issued by the National Assembly of Vietnam amending the
foreigners
Law on Entry, exit, transit, and residence of foreigners in Vietnam
Source: Article 20, 151, 152 and 155, Labour Code No. 45/2019/QH14, dated 20 November 2019,
6Work permit
and visa application
Procedure and standard timeline for Work permit and Visa application
Submit the demand for Submit work Submit visa application

using foreign nationals permit application
Submitted by: sponsoring Received by: local DOLISA Received by: Immigration
entity in Vietnam authority
Received by: government’s business days before the Only be granted after the
body expected commencement applicant enters Vietnam
date using the correct visa
days before recruiting or Processing time at the Processing time at the local
transferring the foreign local authority: 5 business authority: 5 business days
Employment of foreigners nationals to work in days from date of filing
Vietnam
Requirements for employment of foreigners
Only employ foreigners to hold positions of managers, executive directors,
specialists and technical workers with the professional requirements which
cannot be met by Vietnamese workers.
Recruitment of foreign employees in Vietnam shall be subject to written
approval by competent authorities
Acceptance or refusal Submit labor visa
of the demand application
Work permit
The maximum duration of a work permit is two years. Work permit can only Approved by: local DOLISA Received by: Immigration
be extended one time with the maximum duration of two years. authority
Received by: sponsoring
After the work permit has expired, foreign workers have to ask for the grant entity in Vietnam Processing time at the local
of new work permit. authority: 5 business days
Deadline: Within 15 days
from date of filing
after receiving the demand
Labor contract
The duration of a foreign employee’s employment contract must not exceed
that of the work permit Source: Decree No. 152/2020/ND-CP, dated 30 December 2020, issued by the Government; Law on Entry, exit, transit,
A definite-term employment contract may be entered multiple times with and residence of foreigners in Vietnam No. 47/2014/QH13, dated 16 June 2014, issued by the National Assembly of
Vietnam; Law No. 51/2019/QH14, dated 25 November 2019, issued by the National Assembly of Vietnam amending the
foreigners
Law on Entry, exit, transit, and residence of foreigners in Vietnam
Source: Article 20, 151, 152 and 155, Labour Code No. 45/2019/QH14, dated 20 November 2019,
6.1
Entry visas
The sections below provide only the To legally enter Vietnam, foreigners
6.2
Work permits
A work permit is required for a foreign the need to employ foreign nationals
general standard business immigration must apply for a visa corresponding national to legally work in Vietnam, in Vietnam (known as “demand
requirements for a foreigner to work to the entry purpose and provide except for cases of work permit for using foreign nationals) to the
in Vietnam. Various requirements supporting documents. After the exemptions. This document is granted competent authority at least 30 days
and practices are not described in visa is granted, the foreigner is only to a foreign national who is before recruiting or transferring the
this guideline. Some regulations are responsible for acting in accordance sponsored by an entity in Vietnam. foreign nationals to work in Vietnam.
not applied during COVID-19 period. with the registered purpose of entry. Within 15 days from receiving the
A foreigner who enters Vietnam
Professional advice should be obtained demand, the local DOLISA must
Foreigners entering Vietnam to work for less than 30 days to work as a
on a case-by-case basis. respond to the sponsoring entity in
must submit the work permits or manager, executive director, specialist
All foreigners must have a passport work permit exemption certificates or technician and the cumulative writing regarding the acceptance or
or passport substitute papers that in the visa application dossiers. period of working in Vietnam in a refusal of the demand. This letter is
are valid for at least six months and Consequently, work permits or work year does not exceed 90 days is not considered to be a pre-approval for
a visa granted by the competent permit exemption certificates must required to obtain a work permit. For using foreign employees in Vietnam.
Vietnamese agencies, except for be obtained before the labor visa those who come to work in Vietnam This pre-approval letter is one of the
citizens of countries that have visa application dossiers are filed. to settle an urgent issue, complicated compulsory documents for application
exemptions included in bilateral technical or technological issue which dossiers for the issuance or extension
The validity of each visa type differs of a work permit.
consular agreements with Vietnam, (i) affects or threatens to affect
and corresponds to the supporting
such as: ASEAN member countries business operation and (ii) cannot be A work permit application must be
documents in the visa application.
and Kyrgyzstan) or unilateral resolved by Vietnamese experts or filed with the local DOLISA at least
For example, the maximum duration
agreements with Vietnam (Denmark, any other foreign experts currently 15 business days before the expected
of a working visa is 24 months, the
Finland, France, Germany, Japan, in Vietnam are also not required to commencement working date. The
maximum duration of an investor visa
Korea [South], Italy, Norway, the obtain a work permit. current processing time at the local
is 5 years, and the maximum duration
Russian Federation, Sweden and the labor authority is five business days.
of a business visa is 12 months. Procedure and standard timeline.
United Kingdom.
The current processing time is five The sponsoring entity in Vietnam The supporting documents in a work
working days from the date of filing. must submit a document explaining permit application that are issued in
6.1
Entry visas
The sections below provide only the To legally enter Vietnam, foreigners
6.2
Work permits
A work permit is required for a foreign the need to employ foreign nationals
general standard business immigration must apply for a visa corresponding national to legally work in Vietnam, in Vietnam (known as “demand
requirements for a foreigner to work to the entry purpose and provide except for cases of work permit for using foreign nationals) to the
in Vietnam. Various requirements supporting documents. After the exemptions. This document is granted competent authority at least 30 days
and practices are not described in visa is granted, the foreigner is only to a foreign national who is before recruiting or transferring the
this guideline. Some regulations are responsible for acting in accordance sponsored by an entity in Vietnam. foreign nationals to work in Vietnam.
not applied during COVID-19 period. with the registered purpose of entry. Within 15 days from receiving the
A foreigner who enters Vietnam
Professional advice should be obtained demand, the local DOLISA must
Foreigners entering Vietnam to work for less than 30 days to work as a
on a case-by-case basis. respond to the sponsoring entity in
must submit the work permits or manager, executive director, specialist
All foreigners must have a passport writing regarding the acceptance or
work permit exemption certificates or technician and the cumulative
or passport substitute papers that refusal of the demand. This letter is
in the visa application dossiers. period of working in Vietnam in a
are valid for at least six months and considered to be a pre-approval for
Consequently, work permits or work year does not exceed 90 days is not
a visa granted by the competent using foreign employees in Vietnam.
permit exemption certificates must required to obtain a work permit. For
Vietnamese agencies, except for This pre-approval letter is one of the
be obtained before the labor visa those who come to work in Vietnam
citizens of countries that have visa compulsory documents for application
application dossiers are filed. to settle an urgent issue, complicated
exemptions included in bilateral dossiers for the issuance or extension
technical or technological issue which
The validity of each visa type differs of a work permit.
consular agreements with Vietnam, (i) affects or threatens to affect
and corresponds to the supporting
such as: ASEAN member countries business operation and (ii) cannot be A work permit application must be
documents in the visa application.
and Kyrgyzstan) or unilateral resolved by Vietnamese experts or filed with the local DOLISA at least
For example, the maximum duration
agreements with Vietnam (Denmark, any other foreign experts currently 15 business days before the expected
of a working visa is 24 months, the
Finland, France, Germany, Japan, in Vietnam are also not required to commencement working date. The
maximum duration of an investor visa
Korea [South], Italy, Norway, the obtain a work permit. current processing time at the local
is 5 years, and the maximum duration
Russian Federation, Sweden and the labor authority is five business days.
of a business visa is 12 months. Procedure and standard timeline.
United Kingdom.
The sponsoring entity in Vietnam The supporting documents in a work
The current processing time is five
must submit a document explaining permit application that are issued in
working days from the date of filing.
6.3
foreign countries must be legalized in Work permit exemptions. There are a
the country of issuance. Depending number of work permit exemptions for
on the diplomatic relations between example: Temporary
Vietnam and the country of issuance,
the steps required to legalize the
▶ A foreigner who is a contributing
member or owner of a LLC
residence card
documents may vary. ▶ A foreigner who is a member of the
A work permit can be granted with a board of directors of a JSC
maximum validity period of two years. ▶ A foreigner who comes to Vietnam A temporary residence card serves as a
A work permit can be renewed. for a period of less than three multiple-entry visa with a minimum term of
months to offer services one year. The maximum term of a temporary
Qualification requirements. A foreign
residence card is the term of the work permit,
national who wants to work in Vietnam ▶ A foreigner who is an intracompany
the work permit exemption certificate, the
must meet the required qualifications transferee of corporations operating
validity of the business license and the
for a pre-approval position. They must within 11 service industries
applicant’s passport (whichever is earlier).
also be working in a management listed under Vietnam’s WTO
position or be a specialist or commitments. A temporary residence card is granted to a
technician. foreigner who has a valid work permit or work
In general, to satisfy the work permit
permit exemption certificate with duration
In addition to the above qualifications, exemption, at least seven business days
of over one year and their legal spouse and
foreign nationals will generally fall into before the date the foreign national is
children under 18 years old. Documents proving
one of two major categories: intra- supposed to begin work,
the relationship between the principal applicant
company transfer and local hires. An the sponsoring entity must submit a
and the dependents must be legalized and
intra-company transfer must have work permit exemption application to
translated into Vietnamese for the temporary
worked for their home employer for the local labor authority.
residence card application.
at least 12 months prior to the work
The local DOLISA must issue a written
permit application. The local hire must This card can only be granted after the
certificate to the employer within three
sign a local employment contract with applicant has entered Vietnam using a valid
working days. A written response and
the sponsoring entity in Vietnam. Both visa. The current processing time at the local
explanation is provided if the work
intra-company transfers, and local authority is five business days from the date of
permit exemption application
hires must submit documentation the filing of the application.
is rejected.
proving that they meet the necessary
criteria.
6.3
foreign countries must be legalized in Work permit exemptions. There are a
the country of issuance. Depending number of work permit exemptions for
on the diplomatic relations between example: Temporary
Vietnam and the country of issuance,
the steps required to legalize the
▶ A foreigner who is a contributing
member or owner of a LLC
residence card
documents may vary. ▶ A foreigner who is a member of the
A work permit can be granted with a board of directors of a JSC
maximum validity period of two years. ▶ A foreigner who comes to Vietnam A temporary residence card serves as a
A work permit can be renewed. for a period of less than three multiple-entry visa with a minimum term of
months to offer services one year. The maximum term of a temporary
Qualification requirements. A foreign
residence card is the term of the work permit,
national who wants to work in Vietnam ▶ A foreigner who is an intracompany
the work permit exemption certificate, the
must meet the required qualifications transferee of corporations operating
validity of the business license and the
for a pre-approval position. They must within 11 service industries
applicant’s passport (whichever is earlier).
also be working in a management listed under Vietnam’s WTO
position or be a specialist or commitments. A temporary residence card is granted to a
technician. foreigner who has a valid work permit or work
In general, to satisfy the work permit
permit exemption certificate with duration
In addition to the above qualifications, exemption, at least seven business days
of over one year and their legal spouse and
foreign nationals will generally fall into before the date the foreign national is
children under 18 years old. Documents proving
one of two major categories: intra- supposed to begin work,
the relationship between the principal applicant
company transfer and local hires. An the sponsoring entity must submit a
and the dependents must be legalized and
intra-company transfer must have work permit exemption application to
translated into Vietnamese for the temporary
worked for their home employer for the local labor authority.
residence card application.
at least 12 months prior to the work
The local DOLISA must issue a written
permit application. The local hire must This card can only be granted after the
certificate to the employer within three
sign a local employment contract with applicant has entered Vietnam using a valid
working days. A written response and
the sponsoring entity in Vietnam. Both visa. The current processing time at the local
explanation is provided if the work
intra-company transfers, and local authority is five business days from the date of
permit exemption application
hires must submit documentation the filing of the application.
is rejected.
proving that they meet the necessary
criteria.
Foreign
exchange
control
In principle, transactions in Vietnam must be
dominated and undertaken in VND, except for a
few permitted cases. All buying, selling, lending
and other foreign currency transactions must
be made through credit institutions and banks
authorized by the SBV.
Foreign investors may recognize payments
(including payment from overseas) for the
pre-license expenses as a part of contributed
investment capital. Foreign investors are allowed
to repatriate profit from their investment in
Vietnam after completion of all legal, tax and
financial obligations to the State Budget i.e.
completion of tax finalization, submission
of audited financial statements, no more
accumulated loss and notification to tax
authority. The profit repatriation can be made
annually at the end of each fiscal year or upon
the termination of the subsidiary in Vietnam.

Foreign
exchange
control
In principle, transactions in Vietnam must be
dominated and undertaken in VND, except for a
few permitted cases. All buying, selling, lending
and other foreign currency transactions must
be made through credit institutions and banks
authorized by the SBV.
Foreign investors may recognize payments
(including payment from overseas) for the
pre-license expenses as a part of contributed
investment capital. Foreign investors are allowed
to repatriate profit from their investment in
Vietnam after completion of all legal, tax and
financial obligations to the State Budget i.e.
completion of tax finalization, submission
of audited financial statements, no more
accumulated loss and notification to tax
authority. The profit repatriation can be made
annually at the end of each fiscal year or upon
the termination of the subsidiary in Vietnam.

Useful websites
1. Ministry of Planning and Investment: http://www.mpi.gov.vn
2. Foreign Investment Agency – Ministry of Planning and Investment:
http://fia.mpi.gov.vn
3. Ministry of Industry and Trade: https://moit.gov.vn
4. Ministry of Finance: https://mof.gov.vn
5. State Bank of Vietnam: https://www.sbv.gov.vn
6. Vietnam Chamber of Commerce and Industry: https://en.vcci.com.vn
7. General Department of Taxation: http://gdt.gov.vn
8. General Department of Customs: https://www.customs.gov.vn
9. State Securities Commission of Vietnam: http://www.ssc.gov.vn
10. General Statistics Office: https://www.gso.gov.vn
11. WTO Center: https://wtocenter.vn
12. Provincial Competitiveness Index: https://pcivietnam.vn
13. Vietnam Business Annual Report: https://vbis.vn
DDOoI N
i nGg BBu
U SsI iNnESS
ess IINn VVi
I Eet
TNnA
aMm 22002211 103
103
Useful websites
1. Ministry of Planning and Investment: http://www.mpi.gov.vn
2. Foreign Investment Agency – Ministry of Planning and Investment:
http://fia.mpi.gov.vn
3. Ministry of Industry and Trade: https://moit.gov.vn
4. Ministry of Finance: https://mof.gov.vn
5. State Bank of Vietnam: https://www.sbv.gov.vn
6. Vietnam Chamber of Commerce and Industry: https://en.vcci.com.vn
7. General Department of Taxation: http://gdt.gov.vn
8. General Department of Customs: https://www.customs.gov.vn
9. State Securities Commission of Vietnam: http://www.ssc.gov.vn
10. General Statistics Office: https://www.gso.gov.vn
11. WTO Center: https://wtocenter.vn
12. Provincial Competitiveness Index: https://pcivietnam.vn
13. Vietnam Business Annual Report: https://vbis.vn
DDOoI N
i nGg BBu
U SsI iNnESS
ess IINn VVi
I Eet
TNnA
aMm 22002211 103
103
Foreign Investment Agency
Foreign Investment Agency (FIA)
Ministry of Planning and Investment of Vietnam
FIA, an organization belonging to the Ministry of Planning
and Investment of Vietnam, is commissioned to advise to
the Minister of Planning and Investment to implement state
management function related to FDI activities in Vietnam
and Vietnam direct investment activities abroad.
Divisions under Foreign Investment Agency include:
▶ Administration Office
▶ Statistics and General information Division
▶ Foreign Investment Division
▶ Outward Investment Division
▶ Investment Promotion Division
Address: 6B Hoang Dieu, Ba Dinh District, Scan here to visit

FIA website
Hanoi, Vietnam
Tel: +84 80 48461

Fax: +84 24 3734 3769
Email: [email protected]
Website: http://fia.mpi.gov.vn
Investment Promotion Center – Investment Promotion Center –

Northern Vietnam Southern Vietnam
65 Van Mieu Street, Dong Da District, 289 Dien Bien Phu Street, Vo Thi Sau
Hanoi, Vietnam Ward, District 3, Ho Chi Minh City, Vietnam
Tel: +84 24 3747 5998 Tel: +84 28 3930 3287
Fax: +84 24 3843 7927 Fax: +84 28 3 930 5413
Email: [email protected] Email: [email protected]
Website: http://ipcn.mpi.gov.vn Website: https://ipcs.mpi.gov.vn

Foreign Investment Agency
Foreign Investment Agency (FIA)
Ministry of Planning and Investment of Vietnam
FIA, an organization belonging to the Ministry of Planning
and Investment of Vietnam, is commissioned to advise to
the Minister of Planning and Investment to implement state
management function related to FDI activities in Vietnam
and Vietnam direct investment activities abroad.
Divisions under Foreign Investment Agency include:
▶ Administration Office
▶ Statistics and General information Division
▶ Foreign Investment Division
▶ Outward Investment Division
▶ Investment Promotion Division
Address: 6B Hoang Dieu, Ba Dinh District, Scan here to visit

FIA website
Hanoi, Vietnam
Tel: +84 80 48461

Fax: +84 24 3734 3769
Email: [email protected]
Website: http://fia.mpi.gov.vn
Investment Promotion Center – Investment Promotion Center –

Northern Vietnam Southern Vietnam
65 Van Mieu Street, Dong Da District, 289 Dien Bien Phu Street, Vo Thi Sau
Hanoi, Vietnam Ward, District 3, Ho Chi Minh City, Vietnam
Tel: +84 24 3747 5998 Tel: +84 28 3930 3287
Fax: +84 24 3843 7927 Fax: +84 28 3 930 5413
Email: [email protected] Email: [email protected]
Website: http://ipcn.mpi.gov.vn Website: https://ipcs.mpi.gov.vn

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Doing

This Guidebook is prepared in a collaboration

1. Forms of foreign direct investment 31

1. Forms of foreign direct investment 31

Doing Business In Vietnam 2021 5

5 Municipalities and 58 provinces

Language Average annual income

Climate and weather

5 Municipalities and 58 provinces

Language Average annual income

Climate and weather

Inflation (annual average - %) Main export partners in 2020

2.66 3.53 3.54 2.79 3.23

Inflation (annual average - %) Main export partners in 2020

2.66 3.53 3.54 2.79 3.23

Why Vietnam is an attractive destination for foreign investors

Wood & Wood

Why Vietnam is an attractive destination for foreign investors

Wood & Wood

Vietnam is a socialist country operating under the single-party leadership

The Law on Promulgation of Legal Instruments organizes law into a hierarchy

Political structure in Vietnam

ORDINANCES & RESOLUTIONS

ORDERS & DECISIONS

Vietnam is a socialist country operating under the single-party leadership

The Law on Promulgation of Legal Instruments organizes law into a hierarchy

Political structure in Vietnam

ORDINANCES & RESOLUTIONS

ORDERS & DECISIONS

Business sectors that foreign investors can access the market

Sectors which are not

Sectors which are Foreign investor is Market-access conditions:

Foreign investors have the

1 Article 9 of the LOI 2020

Business sectors that foreign investors can access the market

Sectors which are not

Sectors which are Foreign investor is Market-access conditions:

Foreign investors have the

1 Article 9 of the LOI 2020

investment projects Special incentives and investment support Subject or Conditions

investment projects Special incentives and investment support Subject or Conditions

Enterprise 2020 Law on Tax

Enterprise 2020 Law on Tax

The Vietnamese Government has expanded the private investment regime

Extending the deadline Before ▶ After ▶ Impact

The Vietnamese Government has expanded the private investment regime

Extending the deadline Before ▶ After ▶ Impact

favorable than before

1 Articles 10, 11, 12, 13 of the LOI 2020

favorable than before

1 Articles 10, 11, 12, 13 of the LOI 2020

Forms of investment 3 Credit supports

Investment incentives 5 Science, technology and technology transfer

6 Market development and information provision

Import duties Accelerated CIT incentives: Exemption and

1 Articles 15, 18 of the LOI 2020

Forms of investment 3 Credit supports

Investment incentives 5 Science, technology and technology transfer

6 Market development and information provision