Foreign investors in Vietnam are often inclined towards giving a quick boost to their business in terms of financing, reputation, and sales. To achieve this, they often consider buying a shelf company. A shelf company is also called an aged or ready-made company because it has been set up in advance and is ready for new owners to purchase. In this article, we will understand the different facets of buying a business in Vietnam.
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By purchasing a shelf company, business owners can establish their companies quickly, without the lengthy and exhausting process of setting up a brand-new establishment. Plus, given the age of the shelf company, it helps businesses to have a positive brand value, thus making it easier to secure financing and gain clients. It also brings the following benefits:
- Ease of establishing relationships with suppliers and associating with new ones
- Easier to secure contracts
- Enhancing confidence in customers and investors, and
- Gaining bank loan approvals
- Attracting new clients and investors
- Cost reduction for starting a brand new company
What’s a Shelf Company in Vietnam?
When it comes to expanding or starting a business, there are two options: starting from scratch or acquiring an existing company. Although both options have their merits and drawbacks, acquiring an existing company presents a multitude of advantages.
Starting a business from scratch involves a lot of paperwork and establishing your brand from scratch. However, if you acquire a ready-made company in Vietnam, you can start operating right away without worrying about brand recognition. An established name and reputation can help attract customers and generate revenue, allowing you to focus on other aspects of business growth.
In addition to this, acquiring a ready0made company in Vietnam has several advantages such as faster setup process, lower costs, and reduced risks.
What Makes Buying a Business in Vietnam So Attractive?
Quick Acquisition of the Company
The speed of acquiring a company is a crucial factor for entrepreneurs looking to expand their business. Unlike registering a new company, acquiring a shelf company offers an instant purchase process that can lead to quick contracts and sales. This is because the company is already established and registered in Vietnam and usually meets legal compliance standards.
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When it comes to attracting potential partners and clients, credibility is key. A company that has been established for a number of years is more likely to be successful in this regard than a newly developed company. This is because the company’s longevity and experience make it a more attractive option for business partners and consumers alike.
An aged company
The age of a company not only facilitates the establishment of partnerships but also enhances its corporate image. Acquiring a shelf company allows businesses to have an advantage in opening a corporate bank account and obtaining loans with ease.
The ease of purchasing a shelf company can be a major draw for investors. Avoiding the paperwork required to start a business from scratch allows for a smoother process, leading to an immediate start for the company. Once ownership is transferred, the company can begin building relationships with potential partners and clients.
We made the most detailed step-by-step guide to setting up a business in Vietnam for investors, now available as an interactive checklist:
How Can I Buy a Business in Vietnam?
Researching and Finding the Right Business
Performing adequate research before acquiring a business is essential. Conducting your own due diligence prior to taking any action is highly recommended. In addition, it is important to assess the potential of the industry you are interested in before proceeding. This can assist in determining whether it is a viable option for future growth.
Once you have identified a promising industry, you can begin searching for potential businesses to acquire. InCorp Vietnam offers a comprehensive list of partners across multiple sectors that are readily available for purchase.
When considering any potential business for acquisition, it is recommended to create a set of inflexible “Golden Rules” that can be tested. These rules are meant to help you make informed decisions and avoid constly mistakes.
An entrepreneur can begin by making a list of all the critical fundamentals that a business must possess. For example, the below-given list can act as your guiding set of principles to make a quick decision.
- The business must have a sales and marketing focus
- There must be an element of exclusivity, whether in its products or in the geographical area it serves
- There must be an existing demand for the products or services
- It must have high-profit margins
- The business should not solely compete on price
You will quickly cut through the clutter and reduce the number of possible businesses to good ones that make sense for you to consider examining further after you have your top five, against which you will stress test every potential business.
Paperwork and Due Diligence
Acquiring an existing business, although simpler than starting a new one, still involves handling paperwork. However, purchasing a pre-existing company in Vietnam is a hassle-free and speedy process. InCorp Vietnam promptly manages the necessary procedures for ownership transfer in compliance with Vietnamese regulations.
InCorp Vietnam is a leading provider of global market entry services. We are part of InCorp group, a regional leader in corporate solutions, that encompasses 8 countries in Asia-Pacific, headquartered in Singapore. With over 1,100 legal experts serving over 15,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business perfectly fit into the market with healthy growth.
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