10 common mistakes Foreign Investors make after starting a company in Vietnam, by Matthew Lourey, Managing Partner, Domicile Corporate Services (Domiciel Corporate Services is a member of AusCham and Mr Lourey is a Director of AusCham).

An edited extract of the original article is reproduced below.

Establishing a company in Vietnam is a significant step for many foreign investors, and hopefully the beginning of a successful business undertaking. Anyone that has gone through the process of preparing for and submitting an IRC application (Investment Registration Certificate) for approval will understand the frustrations and substantial paperwork required in Vietnam just to commence the process.

Investors will usually use lawyers or professional service providers to undertake the (complicated and time consuming) company registration process for them, and will rely on these advisors to understand as much about the ongoing requirements that arise for their new company when it is established.

Notwithstanding, we constantly see problems arising due to poor or missing advice, or investors not appreciating their Vietnam specific initial obligations once their company has been established.

So, here are 10 of the most common mistakes that foreign investors make when establishing a new company in Vietnam [Note, for additional information on each of the following 10 Mistakes, please refer to the original article]:

  1. 90 Day “Charter Capital” Requirement
  2. Lending Cash Personally to the Company to Get Operations Moving.
  3. Legal Representatives and the 30-Day Residency Requirement
  4. Using a Vietnamese Nominee Investor to Start a Company
  5. Not Registering Promptly for Tax
  6. Making Undocumented Loans or Not Registering Foreign Loans.
  7. Not Appointing a Chief Accountant, and Not Understanding Their Role
  8. Business License Tax Not Being Paid
  9. Not Understanding the Need for Red Receipts and Limits on Cash Payments
  10. Business Travel and requirements

Matthew Lourey is Managing Partner at Domicile Corporate Services. Matthew is based in Ho Chi Minh City and assists foreign companies enter Vietnam, ensure ongoing compliance with Vietnamese requirements, and undertake their international reporting and similar obligations.