Investor tools
What an overseas franchisor actually pays
Pick a market and an ownership type. You get every tax that applies to you as a franchisor granting rights into that country — who bears it, at what statutory rate, and which agreement reduces it. Every rate links to the government that levies it.
⚠ A free trade agreement will not reduce your royalty tax
An FTA cuts customs duty on goods — equipment, ingredients, packaging, fit-out. It does nothing to a royalty. The instrument that reduces withholding tax on royalties and service fees is a double taxation agreement, a separate treaty with a separate claim process. Both are listed below, separately, and never merged.
This is a map of which taxes exist, not advice on your facts. Statutory rates are the only figures a government publishes and stands behind; what you actually pay turns on treaty eligibility, the documents filed before payment, and how each fee stream is characterised in your agreement. Take this to an adviser and pay for judgement, not for orientation.
Market
Ownership type
🇻🇳 Vietnam · Master Franchise
Every head that bites on a Master Franchise arrangement.
Foreign Contractor Tax — CIT on royalties
10%Circular 103/2014/TT-BTC. Royalties, trademark licences and franchise fees paid offshore carry a 10% deemed CIT, withheld and remitted by the Vietnamese payer. The classification line matters: a payment that licenses IP is a royalty at 10%, even where the contract calls it a service fee (services are 5%).
Foreign Contractor Tax — VAT component
0% on IP / technology transfer; 5% on servicesTransfer of technology and of intellectual property rights is VAT-exempt, so a pure trademark/know-how licence carries CIT only. A mixed contract that also supplies training, marketing or systems support pulls the service element into the 5% VAT band — split the consideration in the agreement or the whole fee risks the higher treatment.
Source: General Department of Taxation — VAT on foreign contractors
Corporate income tax (local entity)
20%Standard rate on the local operating company's profits.
Source: General Department of Taxation
VAT on local sales
10% standardA temporary two-point reduction to 8% has applied to many goods and services under successive National Assembly resolutions. Check whether the current resolution period is still running before pricing.
Source: Ministry of Finance / General Department of Taxation
Import duty on goods and equipment
MFN tariff; 0% on most lines under FTAsImport VAT applies on top of duty. Preferential rates require a valid certificate of origin under the relevant agreement — the paperwork is the benefit; without it the MFN rate applies.
What changes at this ownership type
MOIT registration must be completed before the master agreement is signed. The master franchisee pays local CIT and VAT on its own sub-franchise income; your royalty still suffers the 10% FCT on the way out.
Registration required before fees can flow
A foreign franchisor must register with the Ministry of Industry and Trade before granting rights in Vietnam (Decree 35/2006/ND-CP), and disclose at least 15 working days before signing.
📦 Free trade agreements — duty on goods
These reduce or remove customs duty on what you ship in. They do not touch royalties.
11 Asia-Pacific economies + the UK
Tariff elimination on ~99% of tariff lines at full implementation
10 ASEAN members + China, Japan, Korea, Australia, NZ
Reduces or eliminates ~92% of tariffs over 20 years
💸 Double taxation agreements — tax on royalties
This is the instrument that changes what you bank on a royalty stream.
Treaty network
~80 double taxation agreements
Typical royalty rate under treaty
10%, and 5% under a few treaties
A treaty rate is not automatic. The recipient must file a tax residence certificate and the treaty notification with the Vietnamese payer before the payment, or the domestic 10% is withheld and reclaiming it is slow.
Tax authority: General Department of Taxation (Ministry of Finance) · Customs authority: General Department of Vietnam Customs · Rates reviewed: 2026-08-25
Country tax detail is published in English only. Rates and legal rules are not machine-translated here, because a mistranslated tax rule is worse than an untranslated one.
Questions worth asking first
No. A free trade agreement reduces customs duty on goods — equipment, ingredients, packaging, fit-out. It does nothing to the tax on a royalty. The instrument that reduces withholding tax on royalties and service fees is a double taxation agreement, which is a separate treaty with a separate claim process. This tool lists both, separately, because budgeting a zero royalty tax on the strength of an FTA is one of the most expensive mistakes a first-time international franchisor makes.