According to the Law on Investment of Vietnam, the Vietnamese government has provided a series of investment incentives for qualified investment projects, including preferential corporate income tax, exemption from import duty, reduction or exemption of land rental and land use tax.

Foreign contractor tax (FCT) is a special kind of tax in Vietnam, which is imposed on Vietnam-sourced income of foreign enterprises, foreign organizations and foreign individuals from the sale of goods or supply of services to Vietnamese parties on a contractual basis. The foreign enterprises, organizations and individuals subject to FCT are referred to as foreign contractors.

Under Vietnam social security system, if an employer signs a labour contract with a Vietnamese employee for more than one month, the compulsory insurances applicable to both employer and employee include: (1) social insurance, (2) health insurance, and (3) unemployment insurance. Foreign employees holding a work permit and employed under a Vietnam labour contract with an indefinite term or a definite term of 1 year or more shall participate compulsory social insurance.

Foreigners working in Vietnam are subject to personal income tax. Foreign taxpayers can be divided into tax residents and non-tax residents based on their length of stay in Vietnam and other factors.Tax residents are subject to Vietnamese personal income tax on their worldwide taxable income, irrespective of where the income is paid. Employment income is taxed on a progressive tax rates basis ranging from 5% to 35%. Other income is taxed at a variety of different rates.

Companies registered in Vietnam are subject to enterprise income tax, value added tax and business license tax in general. Special sales tax will be imposed if production or import of specified goods, provision of specified services is involved. The following section of this article provides a brief introduction to enterprise income tax, value-added tax and business license tax in Vietnam.

How to remit profits from Vietnam? It is a big concern for foreign investors who have establish a foreign invested enterprise in Vietnam. A brief introduction to the profits remittance in Vietnam is presented below for your reference. When can profits be remitted out? The foreign shareholders of a foreign invested enterprise are permitted to remit out their distributed profits after the end of each financial year or upon termination of their investment in Vietnam.