How foreign investors make capital contributions in Vietnam?

According to Article 16, Paragraph 2 of the 2005 Commercial Law , foreign businessmen have the right to establish representative offices in Vietnam. However, foreign representative offices in Vietnam can only carry out some commercial promotion activities, not profit-making activities stipulated by law. Therefore, the tax burden of foreign representative offices in Vietnam is less than that of enterprises.

foreign representative offices in Vietnam | Yaxin

According to Article 17, paragraph 3 of the 2005 Commercial Law , a foreign representative office has the right to recruit Vietnamese or foreign employees to work in the country. Therefore, personal income tax is the only tax for foreign representative offices.

In order to determine the tax payable, the foreign representative office must conduct a tax audit. Tax audit is the process of calculating and checking all income and expenditure during the tax period to establish the basis for declaration and tax payment. At the same time, tax audits may be the reason for tax exemption, deduction and tax refund.

Personal income tax audit of foreign representative offices:

The taxable income of a person working in a representative office is the salary stipulated in Article 3, paragraph 2 of the 2007 Personal Income Tax Law. The personal income tax declaration, deduction, payment and audit duties of the staff of the representative office belong to this tax.

During the tax audit process, the representative office can consider and list the types of income eligible for tax exemption or tax reduction. According to Article 62 Paragraph 1 of the Tax Administration Law:

“If the taxpayer determines the amount of tax to be exempted, the tax exemption or exemption file includes:

Tax return;

Documents related to determining the amount of tax to be exempted. “

Taxpayers are residents and non-residents:


Counting from the day they first entered Vietnam, they stayed in Vietnam for more than 183 days in a calendar year or 12 consecutive months;

Have a habitual residence in Vietnam, which is the registered place of permanent residence or rental house in Vietnam according to a clear contract;

Tax period: every year.


People who do not meet the above conditions;

Tax period: every time an income is generated.

In addition, if the tax paid is greater than the tax payable, the tax audit can also help the representative office establish a tax refund basis. Tax audit is a complex responsibility related to many laws and regulations.

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