There are many reasons investors are setting up joint ventures in Vietnam. Not only can you expand your target audience quickly, but you can also spread costs with your partner(s). Additionally, a joint venture gives you access to new markets, the edge to compete against others, and the credibility to build trust in your community.
Requirements for Setting up a Joint Venture in Vietnam
A joint venture in Vietnam must abide by the following requirements to incorporate and operate legally:
1. Eligibility
- Two business entities must participate
- A 100% local-owned company as a partner is mandatory for some business lines, e.g. advertising
2. Minimum Capital
- For most business sectors, there is no legal minimum capital requirement in Vietnam. But you must propose a realistic and reasonable amount for your joint venture in Vietnam
- Most businesses propose a minimum capital of US$10,000 but still, this amount may vary based on your business activities
- Your proposed minimum capital shall be able to cover your joint venture activities such as labour fees, office lease, bills and utilities, and investor visa fees
- For certain business lines, there is a set minimum capital requirement in place. E.g. VND 20 billion or US$860,000 for real estate business in Vietnam
3. Restricted Business Sectors
Certain business sectors are not open to 100% foreign ownership of a joint venture in Vietnam. In other words, a partnership with a local company is required.
Below are some of the restricted business sectors that need a local partner:
- Entertainment services
- Advertising services
- Telecommunication services
- Electronic game businesses
- Agriculture, forestry, and hunting-related services
- Tour operator services and travel agencies
- Customs clearance services
- Container handling services
- Auxiliary transport services
- Road, rail, and internal waterways transport services
Procedure for Setting up a Joint Venture in Vietnam
The process of setting up a joint venture in Vietnam is as follows:
1. Obtain an Investment Registration Certificate (IRC)
The first step in the process is to acquire an Investment Registration Certificate in Vietnam from the Department of Planning and Investment (DPI). This process of IRC issuance takes about a month.
2. Get an Enterprise Registration Certificate (ERC)
Once the IRC is on hand, you shall proceed with getting an Enterprise Registration Certificate from the DPI. You will get the ERC within a week.
3. Register for Tax
You must then register for a tax identification number and submit the payment for the annual business license tax within 30 days upon the receipt of BRC or ERC.
4. Contribute to the Capital
Your joint venture company must inject the capital contribution within 90 days upon the receipt or BRC or ERC as well.
5. Apply for Any Supplementary Licenses
Certain business lines in Vietnam will have to obtain supplementary licenses before they can start running legally. For instance, a construction permit is compulsory if you start a manufacturing company in Vietnam. Thus, check if your business line requires any additional licenses and proceed with the application.
How Cekindo can Assist
Establishing a joint venture in Vietnam requires entrepreneurs to work with other partners and be open to business opportunities.
At Cekindo, our professional team can help investors facilitate transactions, harness opportunities, and ensure the successful outcome of the setting up of a joint venture. Our business experts’ experience includes assisting foreign investors to Vietnam who wish to do business with a Vietnamese partner, aligning both capital and expertise.
In addition to joint ventures, Cekindo has years of experience and knowledge in setting up a wide array of entity forms, including limited partnerships, local limited companies, foreign limited companies, representative offices, branches, franchises, and many others. Cekindo can also offer expert solutions in accounting and tax to complement your joint venture projects.
Let us help you successfully collaborate on joint venture opportunities in Vietnam. Complete the form below.