Several forms of non-profit organizations that may have charitable purposes are:
These organizations are different in terms of their establishment, operational purposes, functions, and state management. For example, the essential difference between an SRE and a Fund is that an SRE directly assists people in difficult situations, whereas a Fund only finances assistance. An INGO that is set up in a foreign country may carry out its activities in Vietnam once it obtains an appropriate permit. The main purposes of an INGO’s activities are to support development and to provide humanitarian aid. Beside non-profit organizations, the law also recognizes another type of charitable organization:, social enterprises. A social enterprise is an enterprise with a non-profit commitment to address social and environmental issues.
International non-governmental organization (INGO): An INGO is an international non-governmental organization that has been established outside of Vietnam. The People’s Aid Coordination Committee (“PACCOM”) is the State body that licenses and manages INGOs. PACCOM has officers who are in charge of INGOs from particular geographic areas (e.g. Europe, North America, and the AsiaPacific region). PACCOM’s headquarters are in Hanoi, and it has a branch in Ho Chi Minh City. An INGO may operate under any one of three different permits:
A Permit to Operate is the initial stage that is required if an INGO want to set up a Project Office or a Representative Office. The establishment and operation of INGOs is regulated by the Government’s Decree 12/2012/ND-CP dated March 1, 2012 on Registration and Operation Management of INGOs in Vietnam
1. Permit to Operate: In order to obtain a Permit to Operate, an INGO must have:
The application for issuance of a Permit to Operate includes: Application letter; Charter of the INGO; and Document certifying the INGO’s legal status (e.g. Establishment Certificate). It must be a notarized copy.
Documents requesting for new Certificate of Registration of Operation:
2. Project Office: In order to set up a Project Office, an INGO must obtain a Permit to Operate and must have projects and/or programs that have already been approved by competent Vietnamese authorities. The scope and nature of the projects or programs require regular on-site administration and supervision. The application to set up a Project Office should contain:
3. Representative Office: A Representative Office is only permitted to be located in either Hanoi, Da Nang, or Ho Chi Minh City. In order to establish a Representative Office, an INGO must:
The application for a Representative Office should include:
The regulatory time for PACCOM to examine and decide to issue a Permit to Operate, to set up a Project Office, or to establish a Representative Office is 45 working days. In practice, you should expect that it will take longer because PACCOM may assess the activities of the INGO and consult the opinions of the authorities in the province where the office is located or where the projects/programs will take place. The term of a Permit to Operate is three years from the date of issuance. The term of a Permit to set up a Project Office or a Permit to set up a Representative Office is five years from the date of issuance.
Read more about the INGO Registration process here.
From 1 June 2012, foreign NGOs in Vietnam are administered under Decree 12/2012/ND-CP, which replaced the old legislative document Decision 340/TTg from 1996.
Article 17 of the decree outlines procedure for notification of activities: Within 45 days after the granting, extension, supplement and amendment of the Certificate of Registration, the concerned foreign non-governmental organization shall be responsible for notifying the granting, extension, supplement and amendment of the Certificate of Registration and its operational plan to the People’s Committee of the province/centrally-administered city where it has or intends to conduct activities.
And Article 18 covers reporting responsibility: On six-month or yearly basis, the Chief of Representative Office/Project Office or the authorized person(s) of the foreign non-governmental organization in Vietnam shall be responsible for providing a written report on the operations in Vietnam for the competent State agency (as stipulated in the Article 25 of this Decree) and cc to the People’s Committee of the province/centrally-administered city where it conducts activities, as described in the Certificate of Registration.
The Chief of Representative Office/Project Office or the authorized person(s) of the foreign non-governmental organization in Vietnam shall be responsible for reporting, audits, provision of documents or providing explanations on matters related to organizations and individuals as may be requested by the competent State agency (as stipulated in the Article 25 of this Decree).
The two most common business entity types open to foreign investors in Vietnam are a Limited Liability Company (LLC) and a Joint-Stock Company (JSC). Depending on the industry the company can be wholly foreign owned enterprise (WFOE), or a joint venture with a local partner. Every organization and individual wishing to set up a foreign owned company in Vietnam shall need to meet some specifics conditions as promulgated under the Law on Investment and Law on Enterprise. In specific areas being considered as conditional investment, the investor shall also need to consult with the law governing the area of investment. Once the investment registration certificate is completed, the investor has the obligation to apply for enterprise registration.
The procedure to register for a certificate of enterprise registration of a joint stock company or limited liability with two or more members are herein mentioned:
Next, you or your legal representative submits the full dossier of business registration as regulated to the provincial Business Registration Office (BRO) where your enterprise head office will be registered.
Period: within 03 working days from the full receipt of the dossiers
Result: Business registration office shall issue the certificate of enterprise registration or if the application is not satisfactory, business registration office shall inform the applicant of necessary revisions and supplementation to company.
After being granted Business Registration Certificate, to operate your company officially, you should perform the following procedures:
In general, Vietnam government encourages foreign direct investment. If the investor faces challenges at state authority, whom do not issue notification or request of supplementation to the application for enterprise registration, the investor cold lodge a complaint as prescribed by regulations of law on complaints and denunciation to the state authority to protect its right in doing business and investment in Vietnam. A law firm in Vietnam with expertise in both business registration and dispute resolution could assist the investor in the process.
The enterprise is entitled to do business from the issuance date of the certificate of enterprise registration. For conditional business lines, enterprises are entitled to engage in conditional business lines if they satisfy all conditions and are capable to maintain fulfillment of such conditions throughout their operation.