Tightening to open a trading foreign company in VN (Ho Chi Minh City)
Under the laws of Vietnam, trading activities are divided into the following types:
(i) import means the trader imports goods from other countries into Vietnam to distribute the buyer without having warehouse.
(ii) export means that the trader collects the goods domestically and export them to the foreign countries.
(iii) retail means that the trader can import the goods overseas or purchase domestically for sell to the end users (with or without setting up a retail outlet).
(iv) wholesale means that the trader can import the goods overseas or purchase domestically for sell to the distributors or dealers (with or without having a warehouse Protected content
Under Vietnam’s commitments on accession into the WTO and the local laws, the foreign investors are allowed to set up a 100% foreign invested company to conduct the trading activities. However, there are some certain restrictions applied to the foreign investor to conduct such business in Vietnam. Accordingly, in order for the trading company to conduct the trading activities, it is required to obtain the Business License. To obtain this Business License, it is required to obtain the approval from the Ministry of Industry and Trade of Vietnam (MOIT). Moreover, the products to be imported, exported or distributed in Vietnam must not fall into the list of products which is prohibited or limited to import/export. Moreover, the local licensing authority may request the foreign investor to prove its experience in doing trading business in their home country or Vietnam.
Given the fact that there is no regulation on the minimum investment capital for setting up the trading foreign invested company, but as our practical experience, in order to be approved, the minimum investment capital for the foreign investor will be around USD 100,000 subject to the number of HS codes to be registered.
In the light of the above, we often advise the foreign investor to consider 02 options to set up their trading company in Vietnam:
(i) Option 1: Directly setting up a trading foreign invested company. It takes around Protected content to completed, providing that the foreign investor meets all requirements from the licensing authority.
(ii) Option 2: Facilitating and fund a Vietnamese trustee to set up a local company and thereafter the foreign investor will acquire the local company from the trustee to convert it into a foreign invested company. Under this Option, it may save time and cost.
I do hope that the above is informative and useful. Should you have any relevant question, please reach me via my email: Protected content . Thank you.