How to Start a Joint Stock Company (JSC) in Vietnam

Understand the required corporate structure and documents to establish a joint stock company in Vietnam. Read more.

One of the common entities established by foreign director investors with more than 3 shareholders in Vietnam is a Joint-stock Company. This offers certain flexibilities for medium and large-sized companies with multiple shareholders, including profit-generating activities, listing on the stock exchange etc.

Find Out About Cekindo’s Joint-stock Company Registration Services in Vietnam

Joint Stock Company Definition

AccorAccording to Vietnamese laws, a Joint-Stock Company (JSC) is a legal entity that has its charter capital assigned into equal portions of shares to each shareholder. The minimum number of shareholders is three people. There is no restriction regarding the maximum number of shareholders.

The shareholders can be of any nationality. As a result, a JSC can be structure in the following way in terms of the nationality of shareholders:

  • Solely owned by foreigners 
  • A joint venture between foreigners and locals.

Contrary to a Limited Liability Company, a Joint-Stock Company in Vietnam can issue shares and list them on the stock exchange publicly. By doing this, you can mobilize capital, sell shares and raise funds more easily.In this article, we will tell you more about a joint-stock company in Vietnam concerning, its structure, advantages, requirements, and setup process.

Joint Stock Company in Vietnam: The Organisational Structure

The corporate structure of this type of entity is more complex than that of a limited liability company due to its larger capital contribution size and suitability to medium and large corporations.

In Vietnam, a Joint-Stock Company must consist of the following:

  • Management board supervised by an annual general meeting and an inspection committee
  • A management board’s chairman
  • A director or general director, who will also be appointed as the legal representative of the company

For a legal representative who is a foreign national, Vietnamese Law requires her/him to obtain a work permit and TRC (Temporary Residence Card). They should also be able to show at least 12-month work experience for a managing position.

Detailed Corporate Structure of a JSC:

Management Board

A group of members who will oversee the activities of the organization.

General Board Meetings

This is the top body consisting of all shareholders for decision-making in a company. A general meeting This is an important meeting of the members consisting of all shareholders for decision-making in a company. A general meeting must be held annually. It requires a director or directors to present the annual report on the strategy and performance of the company.

Inspection Committee

The general meeting will appoint independent inspectors to this committee. These inspectors need to supervise the general director and the management board. 

Exception: When a company has less than 11 shareholders with none of them having more than 50% of shares, the inspection committee is not necessary.

Management Board’s Chairman

The management board elects this person to organize and hold the meeting at least once every quarter.

Director or General Director

This person is the legal representative of the entity chosen by the management board. He or she is the company’s employee residing in Vietnam. He or she is responsible for the company’s daily activities and operations.

RELATED: The Comparison of Legal Entities in Vietnam

Advantages of a Joint Stock Company in Vietnam

When talking about the limited liability of shareholders, a joint-stock company is highly beneficial to shareholders personally. Shareholders are only liable for losses or debts that will not exceed the amount they have personally contributed.

Hence, once the company is public this also allows the trading of shares anonymously, as well as prevents creditors of the company from becoming stakeholders.

Apart from that, shareholders can transfer their ownership of shares to others without the consent of other shareholders. 

Additionally, if there is an increase of funds, a joint-stock company in Vietnam is required to hire a chief accountant as well.

Public Listing on the Stock Exchange

One thing to take note of is that a joint-stock company in Vietnam is not required to be listed on a stock exchange publicly during its initial stage of founding.

However, the listing is required if its capital of shares goes over US$ 475,000 with over 100 shareholders, no overdue debt and the business has been profitable in the previous year.

Other than that, all founding shareholders must register and jointly subscribe at the minimum 20% of the ordinary shares that are offered for sale to the public.

Requirements  Documents for the Incorporation of a Joint Stock Company in Vietnam

Even though this type of legal entity is quite popular for medium and large projects, the process and requirements of establishing a JSC are more complicated and time-consuming, along with more stringent requirements.

Some of the required documents are as follows:

  • A bank statement to show the funds available for investment in Vietnam
  • Investment project proposals
  • Documents to apply for an investment registration certificate in Vietnam
  • Legal immigration status certificate for all founding shareholders
  • Personal details of all shareholders and amount of shares allocated
  • Copies of Passports of all Shareholders
  • Land use proposal or office lease agreement
  • A foreign investment certificate
  • An annual return submission

Audited financial statements of the corporate shareholders (if applicable)

Our Recommendation

A joint-stock company can be an excellent option compared to a limited liability company if the size requirements of the business fit your plan. This happens when you plan to join forces to raise funds with several partners — through the issuance of shares and equity.

If raising capital and joining forces are not your main objectives, a limited liability company with a less complicated management system might serve you better.

In any case, Cekindo is here to assist you with every aspect of your business, both domestically and internationally. We provide professional market-entry solutions, legal advisory, and consultancy services to ensure the productivity and efficiency of your business in Vietnam.

Contact Our Consultant

Vojtech Zehnalek

Verified by:​

Vojtech Zehnalek, MSc.

Vojtech Zehnalek is the CEO of the Cekindo Vietnam office. He graduated in Economics and International Trade from the University of Economics in Prague, the Czech Republic, and he also earned a Business Degree at the Vlerick Business School in Belgium.