How to Set Up an NGO in Vietnam
Non-government organizations (NGOs) in Vietnam are allowed to carry out development assistance and charitable activities, which are categorized as non-profit. Vietnam recently updated the legal framework for NGOs by issuing Decree No 58/2022/ND-CP. Vietnam Briefing summarizes the key elements of setting up an NGO.
Vietnam’s socio-economic challenges require international assistance. This creates demand for non-governmental organization (NGO) services, but NGOs looking to set up in Vietnam first need to understand how the industry is regulated.
An NGO entering Vietnam should study the country’s complicated regulatory environment. NGO leaders need to take a flexible and nuanced approach to fulfill their mission and meet the needs of both the people and the government.
NGOs in Vietnam are administered by Decree No 58/2022/ND-CP (Decree 58), which replaces the previous Decree 12 and will be effective November 1, 2022. NGOs can only carry out their activities in Vietnam once they obtain the required permit. Here, we will provide an overview of the practical steps to take when applying for NGO status in Vietnam and other areas of concern beyond the initial registration steps.
Types of NGOs
- NGO – means an overseas registered Non-governmental organization;
- Not-for-profit charity – means a fund established from certain assets voluntarily donated by individuals or organizations or established under a contract or testament or through a donation that has the organization and operation purpose of supporting and promoting the development of culture, education, healthcare, physical training, sports, science, technology, and charitable and humanitarian activities as well as community development. Not-for-profit funds include:
- Social fund: These are organized and operate on a not-for-profit basis for the principal purpose of supporting and promoting the development of culture, education, healthcare, sports, and science as well as for agricultural and rural development purposes.
- Charity fund: These are organized and operate on a not-for-profit basis for the principal purpose of supporting the remedy of difficulties caused by natural disasters, fires, disease, or serious incidents and other disadvantaged persons in need of social assistance.
Foundations are legally recognized as NGOs. At the core, a foundation provides funding to support organizations or individuals to execute projects that tie into its specific development goals. Well-established foundations in Vietnam – such as AIESEC, the Red Cross of Vietnam, and World Vision – implement projects that tie into their organization’s goals and the government’s development goals.
Religious-based NGOs are charitable in nature, carrying out activities and projects with a specific purpose. Vietnam’s relationship with religious-based NGOs began with missionaries trying to promote their religion; however, with time, they have transformed into organizations that assist vulnerable groups in need of aid, while encouraging religion in a way that does not conflict with the country’s laws.
Setting up an NGO
While any NGO seeking to set up in Vietnam will need to consider how regulatory authorities will treat their profile, the registration steps are fairly consistent for all types of NGOs.
Applying for NGO status
A foreign NGO has to apply for foreign NGO status in Vietnam to register its presence. Legal recognition is critical for an organization to create a reputable network, especially when international funding and public stakes are involved.
NGOs entering Vietnam are required to notify the Ministry of Foreign Affairs and the Committee for Foreign NGO Affairs (COMINGO). These government agencies will discern whether an organization fits into the country’s development structure and ensure applications fulfill regulatory requirements.
In order to receive the required designation, an NGO must abide by the country’s tight regulations and ensure all activities are consistent with Decree No. 58/2022/ND-CP. The decree covers registration and management for setting up.
Foreign NGOs can only set up one representative office in one of three cities: Hanoi, Ho Chi Minh City, and Da Nang. It must be noted that the office cannot be located at the headquarters of the Party, State, governmental agencies, and socio-political organizations of Vietnam.
The government issues two types of forms that grant NGO participation in Vietnam: representative office certificate of registration and operations certificate of registration.
NGOs will need to satisfy the following requirements when applying for either the representative or the operation registration certificate:
- Have legal person status under the law of the home country;
- Have clear operation charters, and guidelines in line with Vietnam’s interests and needs;
- Have specific proposals on projects and programs for the coming three years in Vietnam; and
- Have a proposal for a representative in Vietnam.
For the operation registration certificate, the validity is at most three years from the date of issuance while for the representative office registration certificate, it is up to five years.
Code of ethics requirements
An NGO looking to enter Vietnam must provide a comprehensive code of ethics that outlines the mission of operations and programs for development activities. COMINGO will ensure proposals are compatible with the country’s socio-economic development goals.
The foreign NGO is responsible for submitting an updated report on its activities in Vietnam every six months to COMINGO and provide a relevant copy to the People’s Committee for verification.
Rights of NGOs under Decree 58
As per the newly released Decree 58, NGOs in Vietnam are eligible for the following benefits:
- Tax incentives, preferential import duty, and the grant of work permits.
- Use payment account in VND and transactions in foreign currency or VND via the account; and
- Self-termination when no need of continuing NGO operations.
Prohibited NGO activities
NGOs must be aware that the Vietnamese government forbids organizations that engage in political and religious activities against national interest, security, defense, and unity of Vietnam. Profit-making activities, any money-laundering or terrorist engagement, and activities that degrade national customs, identities, or ethics will not be tolerated.
A devised charter proposed by a foreign NGO should be comprehensive by nature to be best prepared for set up. Fundamentally, it cannot be too political and must be attuned to the Vietnamese government’s socio-economic priorities.
If NGOs commit any prohibited acts under Decree 58, the Ministry of Foreign Affairs is entitled to withdraw their registration certificate and suspend or terminate their operation.
Unforeseen challenges are likely to arise for an NGO newly operating in a foreign environment, such as Vietnam.
For an NGO to fulfill its goals – whether it be empowering vulnerable groups, tackling the effects of climate change, or responding to environmental and health risks – delegating a third party to handle the legal and financial requirements can help an organization focus on its social work.
Registering for foreign NGO status, receiving project approvals, and delivering results require a good understanding of Vietnam’s complex regulatory environment. In this case, it is best to use a professional firm to help time-save the technical aspects of setting up an NGO.
Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Hanoi, Ho Chi Minh City, and Da Nang. Readers may write to email@example.com for more support on doing business in Vietnam.
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