Posted 19.08. 2020 by Cekindo
Starting a company in Vietnam requires planning and making key financial decisions. Furthermore, you need to complete a series of activities for legal compliance. Read on to learn about each step to establish your labour outsourcing company in Vietnam.
There are two types of legal entities in Vietnam that you can set up to have 100% foreign ownership.
One is the Joint Stock Company (JSC) and the other one is the Limited Liability Company (LLC).
Therefore, you need to decide which one fits your current and future business goals.
In general, JSC and LLC are similar in terms of setup time and costs.
However, the process of starting an LLC tends to be easier due to its simpler organisational structure. For example, you can register for an LLC with one or two shareholders; but a JSC needs a minimum of three shareholders.
Once you have decided which legal structure to set up, you need to go ahead and apply for an enterprise registration certificate (ERC) and an investment registration certificate (IRC).
Both types of certificates are mandatory when you want to establish a company with 100% foreign ownership.
An ERC is a document in soft copy or hard copy, consisting of enterprise registration information.
To get approved for an ERC, your field of business must be permitted in Vietnam and the business name must comply with Vietnamese law.
On top of that, you are obligated to submit a valid and complete set of registration documents and make payments to applicable fees.
As for IRC, it is a soft-copy document that is compulsory for foreign investors with a minimum charter capital of 51%. An IRC contains information regarding the registered investment project.
1. Opening a Company Bank Account
For foreigners running a business in Vietnam tends to stay in the country for an extended period.
In this case, you may want to open a bank account in Vietnam for the convenience of transactions and to avoid unnecessary bank fees.
Foreigners will enjoy the ease of opening a personal account in Vietnam if you stay in the country for more than six months even if you are not a resident.
Opening a business bank account is highly recommended for foreigners for the ease of transactions without geographical limitations. Plus, you can enhance your company’s professional image and enjoy tax benefits
Two types of business bank accounts are available in Vietnam: investment capital account and transaction account.
2. Registering for Tax and Paying for Annual Business License Tax
You will need to register for tax once your company is registered. Then you will have to make payment for your annual business license tax.
Not only that, submitting your company tax statements monthly, quarterly, and annually are also mandatory. This is when outsourcing companies in Vietnam come into play to help you handle all these tedious accounting matters.
3. Registering for E-invoices
According to Decree 119 in Vietnam, sending e-invoice to buyers is compulsory for businesses of their sale of goods and services. The exceptions are individuals and household businesses.
This new regulation took effect on November 14, 2019, but business is given a grace period to fulfill this law by October 31, 2020.
Cekindo is an independent business consulting firm to assist entrepreneurship across Vietnam. We increase the success rate of new businesses including outsourcing companies in Vietnam.
To this end, Cekindo offers a range of business services that support all types and sizes of organisations, from company registration to flexible workspace solutions.
To help you start your business triumphantly, we will identify the best strategies and resources to support you in your entrepreneurial endeavours.
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