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As Vietnam's record attracts foreign direct investment, it is very important to understand the process of making a remittance from Vietnam.
- Vietnamese government agencies and banks play an important role in the remittance process.
- Normally, remittances are not a problem, but foreign investors need to be careful about their dividend plans.
Process of performing remittance from within Vietnam
For corporations and investors already doing business in Vietnam, transferring profits from Vietnam abroad is a very complicated process. Businesses considering international remittances must keep track of changes in each regulation and process in real time. Lack of local information about the remittance process often results in the inability to send money abroad.
It is a very difficult process to carry out remittances abroad, but for businesses that understand the information correctly, the mission of the corporate group can be carried out smoothly even in socialist Vietnam.
Impact of Vietnamese government agencies and banks on remittances abroad
For those who are considering business development in Vietnam, or who are already operating in Vietnam and are making a profit, which government agency, what laws and regulations will affect the business Understanding is an important part of implementing a business strategy.
Regarding current legislation regarding international remittances, you should be aware of the following general regulations regarding government agencies and investments:
Vietnam Ministry of Finance (MOF: MINISTRY OF FINANCE)
MOF, which is the Ministry of Finance of Vietnam, has the authority to impose taxes on business entities and regulate remittances within Vietnam. The scope of authority of MOF is mainly as follows.
- Adjustment of various tax rates such as corporate income tax, value added tax and special consumption tax
- Coordination of requirements for remittance from Vietnam regarding disposal of profits
State Bank of Vietnam (SBV)
The National Bank of Vietnam SBV, equivalent to the Central Bank of Vietnam, is responsible for regulating commercial banks and foreign exchange in Vietnam. The scope of authority of Vietnam National Bank is mainly as follows.
- Instructions to banks that manage foreign exchange accounts
- Setting requirements related to opening a bank account
- Determination of official exchange rate between Vietnamese Dong (VND) and other currencies
Impact on business model of remittance to Vietnam
Vietnam has relaxed restrictions to allow the transfer of profits to countries around the world, but Vietnamese business owners and investors need to be aware of restrictions on remittance procedures. If these restrictions are not reflected in existing business models, it could result in significant liquidity issues for shareholders.
timing
According to Vietnamese law, profits can be disposed of as remittances only once a year. The once-a-year timing is limited through audits of foreign-affiliated companies.
Financial status
In Vietnam, dividends are usually not paid in years when the company is not making a profit. Therefore, as with the profit plan, it is necessary to carefully consider when and how dividends will be returned to their home countries.
⇒ Explain overseas remittance from Vietnam, legal audit, tax filing and penalties!
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