Nearly 127,000 enterprises set up this year

HCMC – As many as 153,307 enterprises have been established and restarted this year, including 126,859 startups and 26,448 enterprises becoming active again, according to the Business Registration Agency.

As shown in a report of the agency, registered capital of 127,000 newly established enterprises is VND1,295.9 trillion, up 15.2% in number and 45.4% in capital, with the real estate sector making up nearly one-third of fresh funds. On average, each new enterprise has VND10.2 billion in registered capital, a rise of 26.2% year-on-year.

Meanwhile, 35,276 enterprises have registered to adjust capital with VND1,869.3 trillion in total, bringing total registered capital of this year to VND3,165.2 trillion.

According to the agency, new enterprises of this year are mainly active in the areas of wholesale, retail, repair of autos and bikes with more than 45,410 enterprises (35.8%). The processing-manufacturing sector welcomes over 16,190 new enterprises (12.8%), whereas the respective figures in the construction and real estate sectors are 16,035 and nearly 5,070 units.

Though the highest number of newly established enterprises is seen in the wholesale, retail, auto and bike repair sectors, real estate reports the biggest growth rate of 62%. In addition, regarding registered capital, the real estate sector continues to record the largest amount with VND388.37 trillion, accounting for 30%, followed by wholesale, retail, repair of autos and bikes with VND198.04 trillion (15.3%), construction with VND190.82 trillion (14.7%) and processing-manufacturing with VND144.73 trillion (11.2%).

While a new real estate enterprise boasts average registered capital of VND76.7 billion, an enterprise producing and distributing power, water and gas has VND65.7 billion.

In addition, the total number of laborers registered by newly established enterprises falls 8.4% to some 1.16 million. Of these, the processing-manufacturing sector is expected to employ some 430,620 workers (37.1%).

As for nearly 26,450 enterprises resuming operation this year, the number drops by 0.9%. They mostly operate in fields of wholesale, retail and repair of autos and bikes with 10,127 units (38.3%); construction with over 4,000 units (15.1%) and processing-manufacturing with 3,394 units (12.8%).

This year also sees temporary business suspensions at 21,684 enterprises, up 8.9% against last year. Of these, there are more than 8,600 enterprises (39.7%) in wholesale, retail and repair of autos and bikes; 3,165 construction enterprises (14.6%) and nearly 2,790 processing-manufacturing enterprises (12.8%).

Besides, nearly 38,870 enterprises stop operation without registering or are performing procedures for dissolution, down 4.6%. There is also a decline of 2.9% in the number of dissolving enterprises with 12,113 units

Source: The Saigon Times

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Tax Obligations of Representative Offices in Vietnam

Foreign entities have found Vietnam as an increasing attractive destination for investment.  They could consider entering Vietnam in various forms, including setting up representative offices.

“A representative office is a dependent unit of the enterprise, having the task of representing under authorization the interests of the enterprise and protecting such interests” (Clause 2 of article 45, Law on Enterprises 2014). “Representative office shall perform the functions of liaison offices, market surveys, promotion of business opportunities for traders they represent, excluding those in which the establishment of representative offices in that field, it is stipulated in specialized legal documents” (Article 30 – Decree No.07/2016/ND-CP decree detailed regulations on establishment of representative offices or branches of foreign traders in Vietnam under Laws on Commerce).

A representative office is a dependent unit of a foreign enterprise in Vietnam, and it acts under the authorization of foreign enterprises. Representative office shall not conduct business activities therefore, the tax obligations of the representative office are limited, such as:

Firstly, as representative office does not involve profit making activity, hence there are no Value Added Tax, Corporate Income Tax, Annual Due incurred.

Secondly, representative office has to register its tax code, to deduct and pay Personal Income Tax on behalf of its employees working in the representative office or deduct and pay contractor taxes for foreign sub-contractors (if any).

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How Foreign Investors Comply with Reports Submissions in Vietnam

Foreign investors setting up business in Vietnam have to comply with statistics report submissions according to Vietnam laws.  To ensure compliance, corporate lawyers should be consulted to ensure compliance with reports applicable to foreign owned enterprises in Vietnam.

As the current regulation, foreign owned enterprises are obliged to submit monthly, quarterly, six month and annual reports to the Vietnam Department of Statistics or State agency for foreign direct investment of respective province or city.

Monthly reports are applicable to businesses and projects operating in the industry: mining, processing industry, electricity, gas, water supply, waste disposal, water treatment, information and communications, real estate, transport, warehousing, trade and services.

Quarterly reports are applicable to businesses and projects operating in agriculture, forestry and fisheries, construction;

All foreign owned enterprises have to report every 6 months on employment and income of the employee;

On annual basis, all foreign owned enterprises have to submit reports on the identification information of the business; financial indicators reflecting business results including revenue by business lines, taxes, fees, expenses, and profit; and capital investments made during the year by investment sources and investment category.

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Danang calls for investment in hi-tech agriculture

The central coast city of Danang called for investors to get involved in hi-tech agriculture projects worth VND1.5 trillion (around US$66 million) at a seminar last Friday, Lao Dong newspaper reports.

Experts said at the “Luring Investment into Hi-tech Agriculture in Danang City”seminar that given adverse weather conditions and falling agricultural land, the use of advanced technology in agriculture is a right thing to do to ensure higher productivity and economic efficiency.

The city is grappling with a slew of difficulties as agricultural land is sparsely located and small-scale farming is still popular.

Besides, the application of information technology, automation, bio-technology, and advanced farming practices is not common there.

The study for hi-tech agriculture solutions has the same fate and application models lack sustainability and expertise. Therefore, their agricultural products fail to meet consumer requirements.

There has been loose connectivity among scientists, the State, companies, and farmers. Notably, scant attention is paid to branding and product promotion.

The demand for farmed products which meet quality and safety requirements is increasing in the city. Thus, hi-tech agriculture has much room for growth there.

The municipal government proposed investors develop five hi-tech agriculture projects worth an estimated VND1.5 trillion (about US$66 million) at the seminar.

The city pledged to offer investors a host of policy incentives such as covering half of site clearance cost but no more than VND3 billion a project, half of infrastructure costs for manufacturing facilities but less than VND2 billion each, and all of interest for maximum loans of VND10 billion each within a period of three years.

Source: The Saigon Time

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