Foreign investors are a key part of the economic condition of Vietnam, especially as the industrial output in Asia shifts away from China. Various investors are putting their capital into Limited Liabilities Company in Vietnam. The increase in the number of LLCs is related to personal liability protection and the relative ease of setup. It makes this type of entity ideal for foreign investors who are just getting started in Vietnam
What is a Limited Liability Company?
An LLC is a business structure in which the owners are not liable personally for the company’s debt or liabilities, only within the individual contributed capital. These business structures combine the characteristics of a partnership and sole proprietorship. It gives the owners absolute liability protection. It is also the simplest and fastest type of entity to set up in Vietnam.
Read More about setting up an LLC in Vietnam
Limited Liability Company in Vietnam – An Overview
There are two ways in Vietnam that foreign investors can invest their capital in Limited Liabilities Companies:
Purchasing 100% Capital Contributions
In this method, an investor can buy all the contributed capital of the company and can become the owner of the LLC. in that case, the company becomes a One-Member Limited Liability Company. To go through with this, the investor must complete registration processes with the government.
Purchase a Part of the Equity of the Owner/ Company’s members
It is another way for a foreign investor to invest in an LLC. Once the purchase is made, the company, previously a one-member LLC, is now converted into a multi-member LLC.
Depending on the business lines of the LLC., the percentage of owning the contributed capital of the foreign investor in the LLC. can be allowed to be up to less than 100% of the company’s charter capital
Related: Read our latest blog about the certificates needed for a foreign company registration in Vietnam
Procedures for Making Investment by Contributing Capital or Purchasing Stakes
Upon contributing capital or purchasing stakes of a business entity, Suppose to the % of the LLC charter capital leads to the foreign investor, the investor shall (*) satisfy conditions and follow procedures for:
- Registration of capital contribution or purchase of shares or stakes of a business entity – apply for cases which result in an increase of % owned by foreigner investor.
After the process is completed, the agency issues a certificate of satisfaction, showing that the investor is now the LLC owner. - and follow procedures for change of members or shareholders in accordance with regulations of law applicable to each type of business entity.
◦ Result of this stage is the new ERC
Conditions to set up a LLC in Vietnam
Foreign investors contributing capital, purchasing shares, and purchasing stakes of business entities must:
- satisfy market access conditions applied to foreign investors as prescribed in Article 9 of Investment Law 2020;
- ensure national defense and security in accordance with this Law;
- comply with regulations of the law on land and conditions for receipt of land use rights and conditions for use of land on islands or border or coastal communes.
Required for the registration process include some application forms, and written agreements specifying the details about the business and the investment made. For the individual investor, a legalized copy of their passport is attached. But if the investor is an organization, they had to submit a legal document proving their status as an investor.
Once these documents are compiled, they are delivered to the Investment Registration Agency. There, the process of registration will be carried out, which usually takes about 25 working days in total for the foreign investor to complete the two procedures. For cases the investor is not subjected to do (1) registration of capital contribution, it shall only take up to 7 business days to change the company owners/member information.
In that case, a process is followed to convert the company from one member to a multi membered company. For that process, a set of documents must be prepared and submitted to the government. The process may be a little tricky for those who do not have much expertise in the field. To help with your Company Registration, you can get Cekindo and get complete information on the matter.
How can Cekindo Help?
Cekindo has been helping various foreign inventors with investments in Vietnam successfully for several years now. Our talented team is composed of seasoned experts in a wide range of business fields who are ready to help you gain the best strategy for your investment. As a result, you can witness your worthy investment capital in Vietnamese LLC. produce great profits.
Various Vietnamese rules and regulations must be followed before a foreign investor can inject their capital into a LLC. in Vietnam. It would be difficult for someone who does not have an in-depth knowledge of the country’s laws. That is where our team comes in. We house legal experts, who are fully versed in all the registration processes and requirements, shall handle all the paperwork to assure your investment plan into Vietnam to be able to get through perplexed administrative procedures without any obstacles.
So, register with Cekindo today and get a chance to invest your capital in the best LLC in Vietnam.
