Where is least expensive cities for working and living in Vietnam?

Where is least expensive cities for working and living in Vietnam?

The price indexes has always been on top of information list which investors look for when making investment into a new country. Beside various information i.e. GDP, Stock market, unemployment, producer price, interest rate, balance of trade, the investors also check the consumer price index and income to determine the attractiveness of market entry. There are many attractiveness factors including the low cost of living and low level of income in comparable with other neighboring countries, for making investment in setting up company in Vietnam for manufacturing purpose.

Where in Vietnam is cheapest city to live and work?

 According to statistics of 2021, taking Hanoi as the base indicator, the top 10 localities with the most expensive cost of living include: Hanoi (100%), Quang Ninh (99.5%), Ho Chi Minh City (98.98%), Da Nang (96.4%), Hai Phong (95.58%), Lao Cai (94.75%), Son La (94.58%), Lang Son (94.55%) %), Khanh Hoa (94.55%) and Dien Bien (94.41%).

How it has changed since 2015?

The top 10 provinces and cities with the most expensive cost of living in the country in 2015 include: Lai Chau (100.3%), Hanoi (100%), Son La (99.27%), Lao Cai (99.02%), Dien Bien (98.85%), Ho Chi Minh City City (97.39%), Ha Tinh (97.14%), Ha Giang (96.5%), Da Nang (96.44%) and Binh Phuoc (96.12%).

In 2021, Hanoi’s per capita income reaches more than 6 million VND/month.  Since 2016, Hanoi has always been in the top 3 localities with the highest income in the country.

In 2015, Da Nang ranked 9/63 with a price equal to 96.44% compared to Hanoi. By 2017, the city “jumped” to third place, up 6 places compared to 2015. In 2021, Da Nang’s cost of living is 96.4% of that of Hanoi and ranked 4th in the country in terms of expensiveness. In 2021, Da Nang has per capita income of more than 5.2 million VND/month, ranking 5th out of 63 provinces and cities. Previously, 2019 was the year the city had the highest income in the past 10 years with more than 6 million VND/person/month.

In 2021, Ho Chi Minh City reached 98.98% and ranked 3rd out of 63 provinces and cities in cost of living.   From 2002 to 2016, the city has always been the place with the highest income in the country. From 2018 to present, Ho Chi Minh City maintains the “runner-up” position (behind Binh Duong), in which, 2019 is the year with the highest income with 6.7 million VND/person/month.

Besides the three central cities that are constantly in the top of the most expensive localities in the country, Lao Cai is the only mountainous province.

In 2020, Lao Cai ranked 5th in terms of the expensive level in consumption, equal to 96.52% compared to Hanoi. Lao Cai is the most expensive province among 14 Northern Midlands and Mountainous Provinces (the cheapest is Phu Tho, equal to 91.07% compared to Hanoi, ranked 56th nationwide). By 2021, Lao Cai’s index drop to 94.75%, the lowest level of the place since 2015 until now. With this index, Lao Cai ranks 6th in the country in terms of the expensiveness of the cost of living.

In particular, although the cost of living is quite high, the income of people in Lao Cai is not high. The average income of people in this locality was only 1.8 million VND/person/month in 2016 and ranked 53rd in the country. In 2021, people in Lao Cai earn an average of 2.51 million VND, ranking 55th in the country.

The low level of income and least living cost make Vietnam a favourable destination for investment.  Many labour intensive manufacturers in garment, shoes, furniture… have long chosen Vietnam as a place for establishing company in manufacturing. There are growing number of companies in electronics also manufacture in Vietnam to take advantage of the comparable low wage workforce.

With highly professional staff and great experience in foreign investment, ANT Lawyers - law firm in Vietnam would like to support you to establish company in Vietnam. 

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How Vietnam Support Start-up Company in Vietnam?

How Vietnam Support Start-up Company in Vietnam?

Start-up company is a topic that is receiving much attention in Vietnam, especially in the context of the country’s strong integration with the world economy. Starting a business is expected to create economic growth, make a positive contribution to socio-economic development. From start-up ideas gradually appears startup businesses in Vietnam. Every year, Vietnam has hundreds of new businesses established, in which the number of small and medium enterprises account for the majority. Because they are small and medium-sized enterprises, it is inevitable to face great competitive pressure from large traditional enterprises as well as competitors.

The identification of small and medium enterprises is the basis for the State to have supportive policies to help enterprises face competitive pressure in the market. Criteria to determine small and medium enterprises include: field of operation, average number of employees participating in social insurance per year, total revenue or total capital of the enterprise.

Firstly, micro-enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 10 people and the total revenue in the year not exceeding 3 billion VND or the total capital of the year is not more than 3 billion VND. Micro enterprises in the field of commerce and services employing no more than 10 employees per year on average with social insurance contributions and total annual revenue is not more than 10 billion VND or the year’s total capital is not more than 3 billion VND.

Second, small enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 100 people, total revenue in the year not exceeding 50 billion VND or total capital of the year not exceeding 20 billion VND, except micro-enterprises. Small enterprises in the field of commerce and service that have an average annual number of employees who participate in social insurance no more than 50 employees total revenue in the year is not more than 100 billion VND or total capital of the year is not more than 30 billion VND, except micro enterprises.

Third, medium enterprise in the field of agriculture, forestry, aquaculture; industry and construction that has an average annual number of employees who participate in social insurance not exceeding 200 people, total revenue in the year not exceeding 200 billion VND or total capital of the year not exceeding 100 billion VND but not micro-enterprises and small enterprises. Medium enterprises in the field of commerce and service that have an average annual number of employees who participate in social insurance no more than 100 employees, total revenue in the year is not more than 300 billion VND or total capital of the year is not more than 100 billion VND but not micro enterprises and small enterprises.

Because there are a large number of enterprises in the Vietnamese market, the State has introduced policies to support small and medium enterprises such as technology support, information support, consulting support, supporting human resource development, supporting small and medium enterprises to transform from household businesses, small and medium enterprises to innovative start-ups, small and medium enterprises joining industry clusters, value chains. Small and medium enterprises play an increasingly important role in the economic development of countries around the world. With the ability to create business opportunities and effective jobs, this business model is increasingly encouraged to develop and receive support from state agencies to expand and develop this business model in Vietnam.

With highly professional staff and great experience in foreign investment, ANT Lawyers would like to support you to prepare before setting up company in Vietnam. 

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Why Da Nang is a Place for Setting up Business

Da Nang has been creating flexible policies, good environments attracting foreign investors setting up company, building factory, and developing service business.

Setting up Business in Da Nang

Da Nang is a social and economic center of central area of Vietnam with the role as the center of industry, trade and tourism and service. It is a seaport city, an important transport hub for the transit of domestic and international transportation. Presently, Da Nang has been rising as a comprehensive and sustainability developing city.

With the advantages of geographical location, people and nature, the leader of Da Nang is planning to build the city becoming a major tourist center of the country, developing tourism industry with entertainment centers and luxury resorts in Vietnam.

In practice, Da Nang has been reducing administrative procedures, creating favorable conditions for investors in obtaining certificate for investment. In the meantime, the city also supports investors understanding the information and maintaining direct dialogue mode with businesses leaders and managers in order to promptly assist any difficulties encountered by investors in the process of project implementation. Da Nang’s leaders are famous in being proactive in providing the latest information about the law in investment, especially information on the process of changing investment certificate… to facilitate the investment plan of the investors whom are investing in Da Nang. For investment projects in infrastructure construction using ODA capital, the city has been quickly implemented the clearance and compensation in time to hand over the project site to the investors as planned.

To ensure the tourism environment and sustainable development, the city focuses on attracting projects in high technology industry, supporting industry and services with high added value i.e. information technology, education, healthcare and logistics…, especially favouring clean and quality projects rather than large projects but are likely to cause environmental issues.

Along with economic development, Da Nang also has activities and measures for environmental protection by investing in building projects to protect and improve the environment such as: modernization the sewer and wastewater treatment system (JICA), building east-west economic corridor (ADB)… to ensure sustainable and long term development of the economy.

An important element for economic development is the local security. Da Nang has done a great job in maintaining public security in order to guarantee investors a stable and safe political, social environment for investors.

It can be seen that Da Nang converges suitable elements and really is a promising land for investors both domestic and international, to invest in entertainment, real estate, tourism, IT, healthcare, education services.

With highly professional staff and great experience in business in Vietnam, ANT Lawyers would like to support you to establish company in Vietnam.

ANT Lawyers – A law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529. 

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Conditions of Setting up Import and Export Company in Vietnam

Conditions of Setting up Import and Export Company in Vietnam

If a foreign-invested company wishes to apply for export/import or distribution rights, it has to submit the below listed documentation to the competent authorities:

1. Export/Import rights:

The foreign investors who invest to exercise right to export, right to import must follow procedures for grant of investment certificates; the foreign-invested enterprises in Vietnam which supplement the operational business activities for exercise of right to export, right to import must follow procedures for adjustment of investment certificates:

a. Dossier of verification for grant or adjustment of investment certificate as prescribed by law on investment;

b. A written explanation about the satisfaction of conditions in exercise of goods trading and directly related activities;

c. Documents proving the financial capability and experiences of investor in exercise of right to export and right to import;

d. Vouchers of tax agencies on performing the enterprise income tax liability within two consecutive years in the case the foreign-invested enterprises wish to supplement the exercise of right to export, right to import.

2. Trading activities/Distribution

The foreign investors with investment projects on exercise of goods trading and directly related activities in association with the setting up of enterprises must follow procedures for grant of investment certificates.

a. A dossier comprises:

i) Dossier of verification for grant of investment certificate as prescribed by law on investment;

ii) A written explanation about the satisfaction of conditions in exercise of goods trading and directly related activities according to the form MD-6 promulgated together with this Circular;

iii) Documents proving the financial capability and experiences of investor in exercise of business operation of goods trading and directly related activities.

b. After having acceptance opinion of the Ministry of Industry and Trade, the competent state agencies shall grant investment certificate. The investment certificate shall concurrently be business license.  Although not stipulated in the law, before granting an investment certificate with these business lines, the authorities usually consider application on case by case basis, taking into account market stability, population density in the area where the company is located and the consistency of the investment project with the master plan of the said area.

For these business lines the competent authorities must obtain the approval of the Ministry of Industry and Trade before issuing the investment certificate.

3. License for setting up retail establishments

If a foreign-invested enterprise wishes to set up a retail establishment in addition to the first retail establishment, it must follow procedures for license for setting up retail establishment, a dossier comprises:

a. Dossier of verification for grant or adjustment of investment certificate as prescribed by law on investment;

b. Dossier of license for setting up retail establishments, comprising:

i) Application for license to set up retail establishment;

ii) A written explanation about the satisfaction of conditions of setting retail establishments as per the law;

iii) Document of provincial People’s Committee that approves the working result of the Council of checking the economic demand to consider the conformity of setting up of a retail establishment in addition to the first retail establishment.

iv) Report on exercise of goods trading and directly related activities of licensed projects;

v)Vouchers, which are issued by tax agencies, about exercise of enterprise income tax liability in two adjacent years.

After having acceptance of the Ministry of Industry and Trade, the competent state agency shall grant the license for the setting up of retail establishments.

Our lawyers of foreign investment practice at ANT Lawyers - a law firm in Vietnam would like to support you in setting up company in Vietnam.  

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What Are Legal Framework for Fintech in Vietnam

 The 4.0 industrial revolution along with the explosion of the Internet has created the basis for the forward leap in all fields of life. The financial sector is not an exception and is directly affected by science and technology.  In addition to traditional finance, a new type of finance has been formed with superior characteristics which are appropriate for the current situation and actual needs, which is Fintech – Financial Technology. Despite the advantages of Fintech, the process of operating it faces certain difficulties including the legal challenges.

Fintech Lawyers in Vietnam

Fintech may utilize technologies being big data, cloud computing, artificial intelligence, biometrics and blockchain… There is no comprehensive legal framework for such at the present in Vietnam. Hence, regulations on science, technology, information technology and intellectual property can be applied depending on the nature of the matters including Law on Intellectual Property, Law on Information Technology, Law on High Technology, Law on Science and Technology, Law on Cyberinformation Security and Cybersecurity Law. These regulations partly facilitate the research, development and application of technological innovation together with ensuring the protection of databases and related intellectual property.

In particular, digital payment is a big part of Fintech. This sector is governed by Law on Credit Institutions, and regulations on non-cash payments, intermediary payment services. The Prime Minister also issued Decision 316 since March 9, 2021, allowing the use of mobile money to pay for goods and services of small value. This is the legal basis for the establishment of Fintech companies providing digital payment services and for the use of this method by customers. Fintech application also extend to Peer to Peer lending, asset management, and crypto currencies which are not yet clearly regulated in Vietnam.

Because of the importance of making legal regulations governing Fintech, Official Dispatch No. 2433/VPCP-KTTH dated August 31, 2021 of the Government Office directed: “The State Bank of Vietnam chairs and coordinates with relevant agencies to continue studying and concretizing regulations on the pilot mechanism of P2P lending in the process of developing and finalizing the draft Decree on a controlled trial mechanism. Control (Regulatory Sandbox) financial technology activities in the banking sector, report to competent authorities for consideration and decision in accordance with the provisions of the Law on Promulgation of Legal Documents”. On September 6^th, 2021, the Government issued Resolution No. 100/NQ-CP approving the proposal to formulate a Decree on a mechanism for controlled testing of Fintech activities in the field of the banking sector. In April 2022, after the research process, the State Bank of Vietnam published the Draft Decree on the controlled trial mechanism for Fintech activities in the banking sector. This draft is still at the stage of seeking public comment and has not been approved. The formation of the draft marks a new step in Vietnam’s legal framework for Fintech, laying a solid foundation for the later birth of the Decree.

In case the Draft is approved, the Government will officially issue the Decree on Controlled Trial Mechanism for Fintech in the banking sector. This Decree will serve as a basis for credit institutions and financial technology companies to test Fintech technology in their operations to a controlled extent. They can assess the effectiveness and possible risks when using Fintech solutions. Based on the results of the experiment, the legislature can identify issues that need to be corrected by legislation to promulgate legal documents regulating Fintech in the banking sector. If so, banking will be a pioneering field, leading to the formation of Fintech regulations in other fields.

In the face of the strong and rapid development of internet and its application, it is natural to have a separate legal framework for Fintech in Vietnam in the future. Fintech lawyers in Vietnam whom are interested in Fintech could also take part in the process of making the contribution through the comments on draft law drawing from the practical cases advising the clients. It is obvious that, some of the biggest companies in the word are in the technology industry. Among them, Fintech is the fastest growing start-up. The sooner legal framework on Fintech can be issued, the better for Vietnam to snap up opportunities to attract investment and catch up with the world.

Our Fintech, banking lawyers at ANT Lawyers - a Law firm in Vietnam will always follow up with development of legal framework in Fintech in Vietnam to provide update to clients.

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How Foreign Entity Could Set up a Branch Office in Vietnam

How Foreign Entity Could Set up a Branch Office in Vietnam

A foreign business entity or a foreign trader is allowed to set up a branch office in Vietnam to conduct business activities.

How to Set up branch office in Vietnam?

Having the right to conduct business activities and make profit are how a branch differs from a representative office in Vietnam. A branch depends on the foreign business entity that set-up the branch while a foreign owned company set-up in Vietnam exists by itself. The Vietnam Department of Industry and Trade will be approving the establishment of a branch office in Vietnam while Vietnam Ministry of Planning and Investment will be the State agency that coordinate the setting up a company in Vietnam.

In particular, the branch of a foreign business entity in Vietnam (referred to as the “Branch”) means a subsidiary unit of the foreign business entity, established in accordance with the law of Vietnam in order to enter into contracts in Vietnam and conduct activities being the purchase and sale of goods and other commercial activities consistent with its licence for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

The Branch will need to apply and obtain the establishment license; and have a seal bearing the name of the branch.

1. Rights of the Branch

-To rent offices and to lease or purchase the equipment and facilities necessary for the operation of the branch.

-To recruit Vietnamese and foreign employees to work for the branch in accordance with the law of Vietnam.

-To enter into contracts in Vietnam in accordance with the activities stated in the license for establishment of such branch and in accordance with the Vietnam Law.

-To open Vietnamese dong and foreign currency accounts at banks which are licensed to operate in Vietnam.

-To remit profits abroad in accordance with the law of Vietnam.

-To have a seal bearing the name of the branch in accordance with the law of Vietnam.

-To conduct activities being the purchase and sale of goods and other commercial activities consistent with its license for establishment in accordance with the law of Vietnam and any international treaty to which the Socialist Republic of Vietnam is a member.

2. Requested Conditions for Establishment the Branch Office in Vietnam

A foreign company which has effectiveness business activities will be allowed to open the branch office in Vietnam if this company has real demand to open the market in Vietnam and meet some conditions as below:

-Being a trader recognized by the law of the country where it has been lawfully established or made its business registration;

-Having been operating for at least five years after its lawful establishment or business registration certificate in Vietnam.

3. Issuance the Certificate of Branch:

The issuance of the Certificate of Branch will be implemented by the Department of Industry and Trade Department after the foreign company meets all of conditions as Vietnam legal requirements.

The issuing period will be within 20 working-days after the date of submitting the full valid documents as requested.

With highly professional staff and great experience in investment in Vietnam, ANT Lawyers – English speaking law firm in Vietnam would like to support you to set up the branch office in Vietnam 

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Many “American eagles” expressed their desire to invest and expand into Vietnam

Many “American eagles” expressed their desire to invest and expand into Vietnam

After the Covid-19 pandemic with unremitting efforts, Vietnam has affirmed its capacity in all aspects with other countries, especially the capability to fight against Covid and quick return focus to business. Therefore, Vietnam is becoming an attractive investment destination for global investors including American companies. With the stable political situation, young and abundant human resources and commitment to investment facilitation from the Vietnam Government, it has become a great motivation for American investors to choose Vietnam as a safe and effective investment destination to expand business and set up company in Vietnam.

On the occasion of Vietnam Prime Minister Pham Minh Chinh’s business trip to attend the Special Summit to celebrate the 45th anniversary of ASEAN- America relations, many big American enterprises such as Intel, Apple and Google have shared their desire to expand the supply chain, cooperate in technology and move production to Vietnam by coordinating with Vietnamese enterprises that have suitable capability to participate. This is also considered a great opportunity for Vietnam to interact with the world’s leading advanced economy to improve its labor capacity and is a potential market for workers to learn and demonstrate their abilities.

Specifically, Apple wants the Vietnamese Government to continue to have preferential policies to encourage high-tech American enterprises to develop business and invest in Vietnam. On the other hand, Apple also affirmed that it will actively consider the Prime Minister’s proposal on increasing the number of domestic suppliers and raising the rate of using domestic services and goods higher in Apple products in the near future.

In addition, Intel also showed its interest in the Vietnamese market by emphasizing the very important role of Vietnam and Vietnamese factories in Intel’s production chain. Moreover, Intel also highly appreciates Vietnam’s infrastructure and human resources as potential conditions for technology enterprises to continue to expand their operations. Especially in today’s volatile world, Intel’s expansion of investment in Vietnam is a strategic solution.

Currently, Microsoft is working with Vietnam’s Ministry of Information and Communications to deploy digital skills programs both private and public sector, and data science development in Vietnam. Accordingly, technology will help enhance transparency and trust, prevent and fight corruption. Vietnam has a young population, a dynamic country, ready to receive new technologies Microsoft wishes to strengthen cooperation with Vietnam in the fields of digital transformation, ensuring network security, helping Vietnam achieve the goal of reducing emissions to zero by 2050 and contribute to helping Vietnam build a green economy, digital economy, and sustainable development.

In addition, in order to attract foreign investment, the Prime Minister emphasized that the “sincerity, trust and responsibility” stance, “harmonious benefits, shared risks” between big American and Vietnamese enterprises will help the relationship between the parties is stable and good. In addition, to implement the commitments it has joined, Vietnam is continuing to build and perfect institutions suitable to Vietnam’s conditions and circumstances. Moreover, the development of strategic infrastructure such as digital transformation infrastructure, transport infrastructure, energy infrastructure, healthcare infrastructure… will also be the focus of completion to attract foreign investors to establish company inVietnam.

Besides, Vietnam continues to improve the open and stable business environment, and effectively handle administrative procedures. In particular, digital transformation will help reduce direct transactions, fight negativity, trouble, corruption, save time and costs for people and businesses. Therefore, Vietnamese businesses need to innovate in both capacity and organization to capture this opportunity well.

With highly professional staff and great experience in business in Vietnam, ANT Lawyers – Law firm in Vietnam would like to support you to establish company in Vietnam.  

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