Global Franchise Tax Obligations Navigator™

Nine families, in every market: corporate income tax and permanent-establishment exposure; withholding tax on royalties and franchise fees; withholding tax on service, technical and management fees; VAT, GST or sales tax including reverse charge on imported services; import duty with its FTA preference and customs valuation rules; local supplier taxes and excise; franchise or technology-transfer registration and stamp duty; transfer pricing and its documentation; and other levies such as branch profits tax, digital levies and the global minimum tax. On top of all nine sits the home-country bill in Vietnam once the money is repatriated.

No. An agreement was signed on 7 July 2015 but it has never been ratified by the US Senate, and Vietnam does not appear on the IRS list of countries with a treaty in force. A Vietnamese franchisor licensing into the United States therefore faces the full 30% federal withholding on gross royalties, with no treaty reduction available. This is the single most commonly mispriced fact in Vietnamese brand expansion plans.

Not for a typical franchise. The treaty offers 5% only for royalties on patents, designs, models, plans, secret formulas and processes. A franchise fee anchored on the trademark falls into the "all other cases" band at 10% — the same as the Singapore domestic rate, so the treaty buys nothing. Financial models built on 5% overstate the net receipt by five percentage points.

Vietnam is party to sixteen agreements in force plus one signed and awaiting entry into force. ATIGA takes almost all intra-ASEAN lines to zero. RCEP covers fifteen Asian economies with one shared rule of origin. CPTPP is the only preferential route into Canada, Mexico, Peru and Chile. EVFTA removes about 99% of EU tariff lines and UKVFTA carries those concessions into Britain. Bilateral deals cover Korea, Japan, China, Chile, the Eurasian Economic Union and Israel. Preference is never automatic: the goods must meet the rule of origin and travel with the right certificate or self-declaration.

Yes, in some structures. Article 8.1(c) of the WTO Customs Valuation Agreement adds royalties related to the imported goods that the buyer must pay as a condition of sale. The World Customs Organization has held in Advisory Opinion 4.17 that a royalty for using the franchisor brand and system in the importing country is not added, because it does not relate to the goods. But where the agreement obliges the franchisee to buy inputs from the franchisor and the royalty attaches to those same inputs, customs can and does add it. How the supply clause is drafted decides the outcome.

Because of the foreign tax credit cap. Vietnam taxes worldwide income at 20% and credits tax paid abroad only up to the Vietnamese tax on that same income. If the host country withholds 30%, ten percentage points sit above the cap and are lost outright — not refunded and not carried forward. The effective drag is the higher of the two rates, never the sum, but everything above 20% is dead money.

Malaysia requires foreign franchisor approval and registration under the Franchise Act 1998 before any offer, and breach is a criminal offence. Indonesia requires an STPW franchise registration certificate. Saudi Arabia requires a disclosure document filed on the Ministry of Commerce register. Australia requires listing on the public Franchise Disclosure Register. China imposes the two-outlets-for-one-year rule plus a commerce filing. Brazil and Mexico require recordal with the industrial property office, and in Brazil that recordal is what unlocks the ability to remit royalties at all. Korea, France, Italy, Spain, South Africa, Canada and the United States impose mandatory pre-contract disclosure without a central registry in every case.

Registration with the Ministry of Industry and Trade was removed for outbound franchising. Decree 35/2006/ND-CP, as amended by Decrees 120/2011/ND-CP and 08/2018/ND-CP, leaves only a reporting duty to the provincial Department of Industry and Trade where the company is registered. Only inbound franchising into Vietnam still needs MOIT registration. Separately, if the package includes know-how or processes that fall within the Law on Technology Transfer 2017, that element can carry its own registration duty, and putting capital into a foreign entity needs an outbound investment registration certificate.

A gross-up clause says the franchisee must pay the agreed fee free and clear of withholding, so they pay the fee plus the tax. At a 20% withholding rate a 6% royalty costs the franchisee 7.5%. If the contract is silent on the point, custom leaves the burden with the franchisor and the fee arrives net. Write it explicitly, attach a worked numerical example, and add the franchisee obligation to hand back the tax payment receipt — without that receipt the foreign tax cannot be credited in Vietnam and is simply lost.

Every rate is a headline statutory rate published by the named national tax or customs authority, checked against those official sources on 25 August 2026. Each market card carries direct links to the source pages — IRAS, LHDN, DJP, BIR, the Thai Revenue Department, the State Taxation Administration, the NTA, ZATCA, the Federal Tax Authority, HMRC, the IRS, the CRA, Receita Federal, SARS and the rest — plus the Vietnam National Trade Repository for FTA status. Rates change, so verify at source before you sign, and treat this as an orientation map rather than tax advice.