SHARE INFORM LEARN INVESTMENT GUIDE VIETNAM l 2020 7th Edition VIETNAM LEGAL, TAX & INVESTMENT GUIDE 2020 Published by DFDL Vietnam 9th floor, BIDV Tower 194 Tran Quang Khai Street Hoan Kiem District, Hanoi, Vietnam Tel: +84 24 3936 6411 Fax: +84 24 3936 6413 Email: [email protected] Contents are up to date as at 31 December 2019 ©DFDL, 2020 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission in writing from the publisher or copyright holder. This publication, and any form of copy of this publication, may not be sold, re-sold, hired out or otherwise disposed of by way of trade, by any person or entity, without the prior written permission of the publisher or copyright holder. The information contained in this book is provided for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations. Contents Chapter 1 Introduction ............................................................................................................... 2 Chapter 2 Investing in the Country ............................................................................................. 8 Chapter 3 Company Law .......................................................................................................... 21 3.1 Form of Commercial Presence ............................................................................................... 21 3.2 Winding Up ............................................................................................................................. 27 Chapter 4 Land and Real Estate ................................................................................................ 33 4.1 Land Ownership ...................................................................................................................... 33 4.2 Land Use Rights ...................................................................................................................... 33 4.3 Land Use Fees ......................................................................................................................... 33 4.4 Land Rental ............................................................................................................................. 34 4.5 Terms of Land Use Rights ....................................................................................................... 34 4.6 Land Use ................................................................................................................................. 35 4.7 Ways to Obtain Land Use Rights ............................................................................................ 35 4.8 Land Lease from the State ...................................................................................................... 36 4.9 Land Sub-Lease from Industrial Zones, Export Processing Zones, and High Technology Zones ...................................................................................................................................... 36 4.10 Withdrawal of Land Use Rights .............................................................................................. 36 4.11 Permitted Real Estate Business Activities .............................................................................. 37 4.12 Approval in Principle............................................................................................................... 37 4.13 Residential Development Projects ......................................................................................... 39 4.14 Real Estate Transaction Structures ......................................................................................... 40 4.15 Ownership of Residential Housing ......................................................................................... 41 4.16 Assignment of Land Use Rights to Foreign Invested Enterprises ........................................... 42 4.17 Land in Industrial Zones .......................................................................................................... 42 4.18 Rights of Foreign Invested Enterprises with regard to Land Use Rights and Assets on Land 42 Chapter 5 Labor and Employment ............................................................................................ 44 5.1 Employment ........................................................................................................................... 44 5.2 Termination of Labor Contracts ............................................................................................. 47 5.3 Labor Outsourcing .................................................................................................................. 49 5.4 Internal Labor Regulations ..................................................................................................... 50 5.5 Trade Unions .......................................................................................................................... 50 5.6 Collective Bargaining .............................................................................................................. 50 5.7 Resolution of Labor Disputes .................................................................................................. 51 DFDL | VIETNAM | LEGAL, TAX & INVESTMENT GUIDE Chapter 6 Immigration and Work Permits ................................................................................. 53 Chapter 7 Intellectual Property ................................................................................................ 56 Chapter 8 Construction and Foreign Contractors ....................................................................... 67 8.1 Foreign Construction Contractors .......................................................................................... 67 8.2 Construction Contracts ........................................................................................................... 68 8.3 Licensing Requirements for Construction Practicing Certificate ............................................ 69 Chapter 9 Banking, Foreign Exchange and Finance .................................................................... 72 9.1 Banking Sector ........................................................................................................................ 72 9.2 Exchange Control .................................................................................................................... 73 9.3 Conversion .............................................................................................................................. 73 9.4 Accounts ................................................................................................................................. 74 9.5 Remittance of Capital and Profits ........................................................................................... 75 9.6 Local Transactions in Foreign Currencies ............................................................................... 75 9.7 Offshore Loans ........................................................................................................................ 76 9.8 Bank Guarantees .................................................................................................................... 76 9.9 Intermediary Payment Services .............................................................................................. 77 Chapter 10 Taxation .................................................................................................................. 79 10.1 Corporate Income Tax (“CIT”) ................................................................................................ 79 10.2 Transfer Pricing ....................................................................................................................... 84 10.3 Value Added Tax ..................................................................................................................... 85 10.4 Foreign Contractor Tax ........................................................................................................... 87 10.5 Dividends Withholding Tax ..................................................................................................... 89 10.6 Personal Income Tax ............................................................................................................... 89 10.7 Special Sales Tax ..................................................................................................................... 91 10.8 Export Duties .......................................................................................................................... 92 10.9 Import Duties .......................................................................................................................... 92 10.10 Environmental Protection Tax ................................................................................................ 92 10.11 Non-Agricultural Land Use Tax ............................................................................................... 93 Chapter 11 Securities ................................................................................................................. 95 11.1 Regulation of Securities .........................................................................................................