Vietnam, strategically located in Southeast Asia, is an ideal international business hub for foreign investors looking to start their next business venture or establish a startup.
If you are interested in expanding your business to Vietnam, this is a must-read article about the 5 important things you should know before starting your business in Vietnam.
1. Reasons for Establishing a Startup in Vietnam
Vietnam has many inherent advantages as an investment paradise and they become the reasons for a great number of foreigners starting a business in the country.
- Booming economy: The economy in Vietnam is growing sharply due to its ease of doing business, globalisation, and relatively young business environment. Therefore, it can accommodate plenty of foreigners to invest and do business. For more than two decades, Vietnam’s growth rate has been over 6%,
- Attractive labour: The workforce in Vietnam is young, huge, and affordable. Furthermore, the living expenses and other costs are relatively low.
- Young population: Vietnam has a large and young population. Currently, the country has more than 97 million people and will exceed 100 million in just a few years. Also, the middle-class group is growing sharply, driving the demand for goods and services.
2. Available Business Entities
Foreigners wishing to set up a Vietnam can choose a legal entity with 100% foreign ownership or a joint venture.
Both of the business entities have their shares of pros and cons. However, a company with 100% foreign ownership is the most common option for investors.
For example, with a 100% foreign ownership company, you have freedom in how your business operates without the restriction from a local partner or the interruption from a Vietnamese State.
However, without a Vietnamese partner, your access to natural resources in Vietnam is more difficult.
As for joint ventures, they allow you to have better access to local resources and earn significant market share faster. Plus, you will have more understanding of the social, cultural, economic attributes of Vietnam with a local partner.
One drawback is the possible challenges between you and your Vietnamese partners due to customs, business culture, and language differences. A joint venture is also under the control of the Vietnamese State.
3. Certificates
All foreign investors must acquire an investment certificate before you can run your Vietnam startup. The investor is the legal person and is required to declare all foreign direct investments.
The requirements for obtaining an investment certificate in Vietnam vary, depending on the type of investment project that has to go through an investment evaluation procedure.
4. Startup Company Registration
In addition to an investment certificate, you shall then apply for a registration certificate for your company registration. The process of company registration is almost the same for both 100% foreign-owned companies and joint ventures.
All foreigners setting up either type of company must submit their application to the planning and investment department where their company is located.
5. Affordable Solution: Virtual Office and Coworking Space
Instead of an inflexible and expensive physical office, many Vietnam startups are encouraged to make use of virtual offices or coworking spaces at the early stage of their businesses.
These innovative workspace solutions enable entrepreneurs to enjoy great flexibility in terms of location and time, low costs, advanced technology, and scalability.
How Cekindo can Assist Your Startup in Vietnam
Establishing a Vietnam startup is possible for almost any foreign companies and individuals.
Cekindo is a professional business consultant in Vietnam specialised in the registration of foreign businesses, application of certificates, outsourcing, and flexible workspace solutions.
We will assist you from the consultation stage regarding the correct type of legal entities, relevant permits and certificates, power of attorney, bank account opening, notarised translation, tax registration, and even visa and work permit application for your foreign directors and employees.
Leave us a message in the form below and we will be happy to assist you.