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Doing Business In Viet Nam Foreign Contractor Foreigners can take part in biddings for doing projects and other business undertakings in Vietnam. However, it is quite confused for them to do business in Vietnam because of the absence of general regulations on this matter. 9.1 Legislation There is few specific regulations covering the activities of foreign contractors and sub-contractors in Vietnam. At the moment, Circular No.05/2005/TT-BTC of 11 January 2005 of MOF, introducing the tax regime applicable to contractors in Vietnam, is the most reference legal document. Subject to the nature of business, the contractor activities shall be subject to the specific sectoral regulations, including technology transfer, construction, etc.. Below are some regulations on foreign construction contractors and sub-contractors. 9.2 Requirements To become a foreign construction contractor or sub-contractor in Vietnam, an applicant must satisfy the following criteria: (i) Having the legal person status and winning a bidding in Vietnam; (ii) Committing to enter into an association contract with local partner(s), for carrying out the winning project; (iii) Having eligible capital (US$5 million as to main construction contractors, US$100,000 as to design contractors, and 20% of such figures as to sub-contractors); (iv) Having a good financial base for the last 2 years; and (v) Possessing of an adequate base of facilities and manpower. 9.3 Applications For a construction contractor license, application file must be submitted to the Ministry of Construction ("MOC") in 4 sets, each of which must contain the following papers: (i) Application letter; (ii) Report on bidding process and result lodged by investor to competent agencies; (iii) Legal papers in connection to the investor and bidding project; (iv) Legal papers of foreign construction contractor; and (v) Association contract(s) with local partner(s). Subject to the nature and scale of the bidding projects, construction contractor license shall be issued by either MOC or city/province-level departments of construction, within 20 days from the receipt of the satisfactory file. 9.4 Permitted Activities Once being licensed, foreign construction contractors can do the following: (i) Lease office; (ii) Open bank accounts with banks being licensed and operating in Vietnam; (iii) Register the right to use public utilities for their operation; and (iv) Register the right to use Vietnamese accounting system. 9.5 Taxation Taxes applicable to foreign contractors and sub-contractors in Vietnam are well described in the Section 16 hereunder. Vision & Associates
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