The main law covering the creation of foundations in Vietnam is the Non-Profit Act. Also known as non-profit or not-for-profit entities, these are organizations that primarily engage in fund-raising for charitable, religious, cultural, social, educational, or other similar reasons.
Below, our company formation agents in Vietnam explain the main characteristics of foundations. They can also assist those who want to set up such organizations.
Types of non-profit organizations in Vietnam
According to the law, there are several types of foundations available for registration in Vietnam. These are:
- the non-governmental organization or NGO;
- the charitable organization;
- foundations;
- religious organizations.
Charitable organizations are further divided into:
- social funds;
- charity funds.
The main objective of social funds, which are set up and run on a non-profit basis, is to support and promote culture, education, healthcare, sports, and research, as well as agricultural and rural development.
Charity funds are established and run on a non-profit basis with the primary goal of assisting in the relief efforts for those affected by serious catastrophes, such as fires, illnesses, or natural disasters, as well as other people in need of social aid.
It is also possible to set up a foundation in Vietnam as a foreigner, however, the conditions in this case are different.
You can rely on our company registration advisors in Vietnam for support with the incorporation of a local or foreign-owned NGO.
How to register a foreign NGO in Vietnam
To establish presence in Vietnam, a foreign NGO must apply for the foreign NGO status. For this purpose, the foundation must notify the Committee for Foreign NGO Affairs (COMINGO) and the Ministry of Foreign Affairs before entering Vietnam. These government organizations will determine whether the organization respects the country’s social development goals and adheres to the legal criteria.
The types of documents that the government issues to authorize an NGO in Vietnam are the representative office certificate of registration and the certificate of operations and registration.
When applying for either the representative or the operation registration certificate, Vietnamese NGOs must meet the following criteria:
- possess legal person status as defined by domestic law;
- have operational charters and rules that are in keeping with Vietnam’s requirements and interests;
- have specific social purposes for the next 3 years;
- appoint a local representative.
Do not hesitate to contact our local agents if you need more information in how to set up a foundation. We can also help you open a company in Vietnam, if you are interested in profit-oriented activities.
Taxation of NGOs in Vietnam
Income obtained from various types of charitable and social purposes is eligible for tax benefits under the Enterprise Income Tax Law (2008) and the Individual Income Tax Law (2007). Additionally, Vietnamese NPOs are given tax breaks and advantages outlined in laws and rules governing value-added tax (VAT).
Our accountant in Vietnam is at your disposal if you have an NGO and need assistance in obtaining all the tax benefits arising from such activities.
NGO activities in Vietnam
Vietnam is a country that relies on the activities of local and foreign foundations, and according to the recent news:
- 436 foreign NGOs from 29 states around the world have had activities in Vietnam in the first half of 2022;
- during this time, they have supported projects worth USD 108.5 million;
If you want to open a foundation in Vietnam and need guidance, do not hesitate to address our company incorporation experts.