Vietnam has turned into a utopia for foreign investors, thanks to the government’s extensive assistance and trade agreements, the growing middle-income groups, and evolving consumer attitudes. The country’s promising economic conditions acts as a catalyst for foreigners to form and register businesses in the country.
Moreover, an increase in the number of returning young Vietnamese individuals living & studying abroad and the influx of expatriates from all over the world attests to the country’s strong economic position.
If you are a foreign investor interested in expanding your business to this dynamic young economy, you must first learn about business formation. To set up a business in Vietnam, you need to create a legal entity.
Choose an appropriate business structure/entity for Company Setup in Vietnam
The Law on Investment and the Law on Enterprise are two important laws that govern the formation and operation of both domestic and international businesses in Vietnam.
Foreign investors have various options to set up a company in Vietnam, depending on their market entry strategy, scale of operations and other business-related factors.
A limited liability company (LLC) in Vietnam can have up to 50 members, and each member’s responsibility is limited to the capital contributed to the business. A joint-stock Corporation, on the other hand, is created by founding shareholders who subscribed to their firm’s shares. A JSC can have as many shareholders as it wants, but at least three are necessary.
Other options constitute creating a Representative Office or a Branch Office. A Representative Office is ideal for foreigners who wish to learn about the local market and establish a footprint before expanding. It is not permitted to engage in income-generating operations or to function in the manner of a regular business. However, a branch serves as an extension of its parent company. The owner of a branch office in Vietnam can conduct all parent company’s commercial activities and make a profit without incorporating a separate legal entity.
The process of setting up a company in Vietnam
Each legal entity’s incorporation procedure differs and might take anywhere from one to three months.
In general, international investors should be cognizant of the following steps:
- Foreign investors need to receive an Investment Registration Certificate (IRC) from the Department of Planning and Investment (DPI).
- The second document to be obtained during the registration process is an Enterprise Registration Certificate (ERC).
- Investors must complete their tax registration, pay business licensing tax, and make their initial capital contribution after getting both certificates.
- Minimum Capital Requirement is not generally a requirement, however it depends on the industry you are investing in as well as the size of your business.
Required documents to set up a company in Vietnam
Completing the set-up procedure for business registration in Vietnam involves a lot of paperwork. Depending on the kind of business chosen by foreign investors, additional documentation may be required.
The following are required documents for registering a business in Vietnam:
- Application for enterprise registration: The application should include the enterprise name, the head office address, business line, charter capital of the owners, types of shares, number of employees, particulars of relevant partners/representatives, and tax registration information.
- List of board members
- Company charter/ articles of association
- Copy of passport/ID card or other valid personal identification documents of individual members
- Copy of Investment Registration Certificate, for foreign investors as prescribed by the Law on Investment
The above-mentioned documents are required to get the Enterprise Registration Certificate, which certifies your company’s legitimacy in the country. To set up a business in Vietnam, foreign investors must file for an Investment Registration Certificate with the appropriate authorities.
Cost of setting up a company in Vietnam
The costs vary depending on the types of business structures that investors opt for. Following are some of the aspects that involve certain costs:
- Costs for registering a company and obtaining business licenses;
- Minimum capital requirements (vary according to the selected business sectors);
- Cost for co-working space/ local offices and relevant facilities and management fees;
- Other possible types of charges: Salaries for employees, tax payments, compliance costs for maintenance of the company, or hiring a Vietnam accounting service to free your business from hassles.
- HR & Accounting Must Also Be Factored In
How Can Cekindo Help?
Company setup in Vietnam consists of multiple procedures that are time-consuming and overly official. Having company registration professionals, like Cekindo, by your side can save you a great deal of time as well as provide you with a hassle-free experience. Cekindo provides a wide spectrum of ancillary services related to company registration, like legal consultancy, license and other documents acquisition, tax and accounting, and HR services.
Let’s start by filling out the form below and talk to one of our professional counselors.