VietNamNet Bridge - Many Vietnamese businessmen decide to register their businesses in other countries because they hope they can get more transparent information, have better opportunities to access investors, and have good brands they can market. 

Tia Sang’s reporters met two Vietnamese businessmen who registered their businesses overseas. 

One of them is Nguyen Minh Thao, the founder of Umbala, a startup which provides the mobile app which allows users to shoot, edit and share short videos. The firm targeted the US market at first.

The other is Le Phuoc Phuc, the founder of Wiindi, an e-commerce website & social network specializing in fashion products. The firm is targeting the Vietnamese market before it expands business in South Eat Asia.

Both Umbala and Wiindi now operate in Vietnam and all of their workers are in Vietnam, but they register legal entities in other countries – Umbala in Mountain View, the US, and Wiindi in Singapore.

Many Vietnamese businessmen decide to register their businesses in other countries because they hope they can get more transparent information, have better opportunities to access investors, and have good brands they can market.

Thao denied that it deliberately registered business in the US to avoid tax or enjoy preferential tax.

“It is well known to everyone that the corporate income tax in the US is higher than in Vietnam,” he said.

Some Vietnamese would rather register business in other countries not because they want to pay lower tax, but because they hope they can save time on administrative procedures.

Both Thao and Phuc said as the administrative procedures in developed countries are very clear, they can easily have business registration or follow other necessary formalities.

“A startup would rather spend their time to expand markets and develop business, and they don’t want to waste time on administrative procedures,” Phuc explained, adding that it would take the whole morning in Vietnam just to submit papers.

The most modern e-government system is believed to be the one run by the Ministry of Planning and Investment (MPI) which allows businesses to register new business or correct information on e-portal. However, it can only best serve those in Hanoi and HCM City.

The General Department of Taxation runs the tax declaration system which allows tax payers to submit periodic reports. However, the system is only reserved for those who know accounting.

The top priority for startups is finding investors. However, foreign investors in technology are not really interested in Vietnamese firms. This is partially because the small sums of investment ($50,000-200,000) are not worth the money and time to follow complicated administrative procedures in Vietnam.

Therefore, if setting up businesses overseas, one would have bigger opportunities to call for investments. JFDI Asia, headquartered in Singapore, invested in Wiindi even when the firm was not officially established.

Tia Sang