Posted 15.07. 2019 by Cekindo / Last update on 29.01. 2020
Due to the fact that 100% foreign ownership is allowed in many business sectors, foreigners are encouraged to make investment through company incorporation. One way to do it is by setting up a foreign company when it comes to company registration in Vietnam. However, in certain sectors, some restrictions still apply to a foreign-owned company.
As a result, it would be more ideal to establish a local company in Vietnam instead of a foreign-owned company with 100% foreign ownership.
This article clarifies why a local company in Vietnam is a better choice in certain circumstances, and when you should consider starting one.
As long as the foreign ownership of a company in Vietnam is less than 51%, the company is regarded as a local company in the country.
The laws and regulations for foreign ownership of most business sectors in Vietnam are mostly governed by the agreement of the World Trade Organization (WTO) and other international treaties.
Local legislations often apply for businesses that are not fully open to foreign ownership. But here is the thing: some of these business lines do not fall in a specific area and the laws governing them are ambiguous.
In other words, there aren’t any local legislation or international agreements to regulate them. Some of the sectors are:
Therefore, if your business sector is one of these industries with ambiguous regulations, the approval is required from the relevant Ministry. And then of course, your company registration process will take a much longer time.
Registering a local company in Vietnam offers several benefits, and being able to complete your company registration faster is one of them.
Generally, it takes approximately 20 working days to set up a foreign company. The reason is that foreign companies must obtain the Investment Registration Certificate (IRC) before they can proceed with the company registration.
What makes the matter worse is that if your business sector falls under the mentioned ambiguous category, it takes several months or close to a year to get an IRC.
The good news is, a local company does not need to obtain an IRC. This owes to the fact that local companies have less than 51% foreign ownership and therefore an IRC is not required.
With that being said, without the IRC application, setting a local company allows you to apply for the Enterprise Registration Certificate (ERC) or Business Registration Certificate (BRC) right away.
The entire process of local company incorporation in Vietnam takes significantly a shorter time, approximately 7 working days.
Cekindo can serve as your reliable provider to assist you in registering your company in Vietnam. This is all you have to do:
Get in touch with us today by filling in the form below, so you can start entering the Vietnamese market as soon as possible.