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Home Business

How to do Business in Indonesia & Vietnam

by Teecycle Editorial Staff
24/02/2021
in Business
Business
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Over the past decade, both Indonesia and Vietnam have successfully drawn the attention of global investors’ & entrepreneurs’ — those planning to launch their business ventures in Asia’s territory.

Yet, there are specific challenges and limitations that call for professional help in setting up a company in Indonesia and Vietnam, and here in this article, we’ll be mentioning two of these.

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So, Scroll Down to Find Out:-

1.    Complex Government Regulations in Both Indonesia & Vietnam

To successfully register your company in Indonesia, you must pass through several government regulations & clearances. Besides all this, you are required to apply for the Indonesia Investment Coordinating Board’s principal license.

There are several documents required for submitting the license request, spanning from proof of the taxpayer number, Ministry of Law and Human Rights clearance, certificate of domicile, and more. Also, the government keeps on renewing and modifying the regulations.

Starting a foreign-owned business in Vietnam is possible and encouraged by the government, yet the laws are complex. Entrepreneurs who want to setting up a new company in Vietnam need to provide a list of specific legal documents.

These include the article of association or a company charter, audited financial statement for one year, and valid personal identity cards. There are also stringent currency restrictions for foreign entrepreneurs to invest money in foreign-owned businesses.

The best way to tackle the challenge is to hire experts with specialization in market-entry and business registration. They’ll keep you updated with the most up-to-date regulations in both these countries.

Plus, they’ll assist you in managing these complicated rules. They generally have a panel of qualified lawyers, tax, accounting, and company incorporation professionals to make your company abide by the nation’s laws.

2. Foreign Ownership Limitations in Both Indonesia & Vietnam

Indonesia’s foreign ownership limitations restrict international investors. Only specific sectors and industries are there where 100% FDI is allowed; complete categorization is done in the Indonesian Negative Investment List (DNI). The DNI mentions sectors that are open for foreign investment and what percentage.

The good news is, the Indonesian government is expected to cut the FDI curbs to create more jobs and fuel its economy. As the latest draft of the presidential decree, the no-FDI sectors’ list to be trimmed down to 48 from 300. The government is all set to remove various sectors such as energy, communications, tourism, and creative economy from the negative foreign investment list.

Now, coming to Vietnam, they have imposed strict guidelines on foreign ownership. For instance, in the public sector, the foreign ownership is up to 49% max. Here are the prohibited sectors for foreign investment in Vietnam:-

  • Hazardous chemicals & minerals
  • Drugs and narcotics
  • Range of specimens of endangered flora and fauna
  • Prostitution
  • Human cloning or asexual reproduction

Final Takeaway

Despite these challenges, both countries are amongst the premier destinations for doing business in Southeast Asia. It is believed in the coming years, to lure foreign investments, their respective governments will overcome these challenges or what many call challenges.

If you still have any queries or doubts, do reach out to a local business consultant to assist you in the process of opening your company in Indonesia or Vietnam. Also, they can help you better deal with these challenges.

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