Premia TNC Vietnam Team
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Vietnam is one of the fastest-growing e-commerce markets in Southeast Asia, offering endless business opportunities for foreign companies. Interest in establishing e-commerce businesses is growing, particularly due to its young population and rapidly growing digital infrastructure.
In this post, we’ll explore the key steps, advantages, and considerations involved in establishing an e-commerce company in Vietnam.
Growth of Vietnam's E-Commerce Market
Vietnam’s e-commerce market has experienced remarkable growth in recent years. Driven by rising internet penetration, widespread smartphone use, and a young, digitally savvy population, online shopping is rapidly increasing. According to global data platform Statista, Vietnam’s e-commerce market is expected to grow by over 20% annually, reaching a market size of US$57 billion by 2025.
This growing backdrop has made establishing an e-commerce entity an essential element for running a successful business in Vietnam.
3 Key Steps for Establishing an E-Commerce Business in Vietnam
1. Procedure for Establishing a Business
- Issuance of an Investment Registration Certificate (IRC): Foreign investors must first obtain an Investment Registration Certificate (IRC) to start a business in Vietnam. This certificate is issued by the Department of Finance (DOFI) of Vietnam.
- Issuance of an Enterprise Registration Certificate (ERC): After issuing the Investment Registration Certificate, you must obtain an Enterprise Registration Certificate to register your company. This step involves registering the company’s name, address, capital, and other details.
2. Obtaining an E-Commerce License
Operating an e-commerce business in Vietnam requires filing an e-commerce activity report, which is handled by the Ministry of Industry and Trade (MOIT). Legal entities operating online shopping malls or e-commerce platforms may require a separate license.
3. Tax Registration
Doing business in Vietnam requires registering a tax code. The tax authority will issue a tax code to the company upon completion of its establishment registration with the DOF. It allows a company to report and pay taxes in Vietnam. Value-Added Tax (VAT) and Corporate Income Tax (CIT) are mandatory tax reporting items.
Perks of Setting Up an E-Commerce Business in Vietnam
Establishing an e-commerce business in Vietnam offers several advantages. Foreign investors in particular benefit from the following.
1. Rapidly Growing Market
Vietnam’s e-commerce market boasts a high average annual growth rate, offering a rapidly expanding market opportunity. Driven by a young, digitally savvy consumer base, demand for online shopping is exploding.
2. Strategic Location
Vietnam is a strategic base for entering the ASEAN market. Establishing a corporation in Vietnam provides a springboard for entering the entire Southeast Asian market and effectively manages e-commerce activities in the region.
3. Tax Benefits
The Vietnamese government actively supports the e-commerce and IT industries, offering corporate tax breaks for certain industries. Some e-commerce companies may be eligible for corporate tax exemptions and reductions for a limited period.
3 Key Considerations for Running an E-Commerce Business in Vietnam
1. Legal Regulations
Vietnam has strict legal regulations governing e-commerce activities. Strict compliance with regulations related to consumer protection, data protection, and the operation of e-commerce platforms is particularly crucial. In Vietnam, the E-Commerce Act mandates the safe protection of consumer information.
2. Logistics and Delivery Infrastructure
While Vietnam’s logistics and delivery infrastructure is rapidly developing, delivery issues and delays can still occur in some areas. It’s crucial to select a reliable logistics partner and develop an optimized logistics strategy.
3. Localized Payment System
Vietnamese consumers prefer localized payment systems. Mobile payments, in particular, are rapidly expanding, and businesses must offer payment methods familiar to local consumers to successfully enter the market.
Strategies for Entering the E-Commerce Market in Vietnam
1. Digital Marketing Efforts
Digital marketing is essential for running a successful e-commerce business in Vietnam. Actively leveraging social media and mobile marketing is particularly effective. Vietnamese consumers heavily use social media platforms like Facebook and Zalo, so marketing campaigns based on these platforms can be advantageous.
2. Localized User Experience
Vietnamese consumers are sensitive to localized user experiences. Localization of language, payment methods, and delivery systems is essential to ensure a convenient experience for consumers. UX/UI design tailored to the local market is also crucial.
3. Building Partnerships
Collaborating with local partners is crucial for successfully entering the Vietnamese e-commerce market. Partnerships, particularly in logistics, payments, and marketing, can accelerate market entry.
The Future Landscape of E-Commerce Incorporation in Vietnam
Vietnam’s e-commerce market is expected to continue to grow rapidly, offering tremendous opportunities for foreign companies. Establishing an e-commerce business in Vietnam can help you gain a competitive edge in the global market, leveraging its strategic location and rapidly growing consumer market. However, you must also ensure strict compliance with local laws and regulations, along with a digital marketing strategy and a localized user experience to lay the foundation for successful business operations. To ensure your e-commerce success in Vietnam, start your secure incorporation process with Premia TNC.
Premia TNC Vietnam Team
Author
Premia TNC Vietnam is a dynamic team of experts dedicated to supporting businesses and entrepreneurs as they establish, manage, and grow their presence in Vietnam and across the region. Premia TNC Vietnam specializes in providing tailored corporate services, from company incorporation and compliance to tax planning and accounting. With our extensive experience and deep understanding of the local regulatory environment, we are here to make business operations smoother and more efficient.
