Limited Liability Company (LLC) |
Representative Office (RO) |
Branch Office (BO) |
Joint-stock Company (JSC) |
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|---|---|---|---|---|
| Applicable | All investors | All members of WTO | All investors | All investors |
| Minimum Capital | Depending on the business activities | No requirements | No requirements | If trading on stock market, minimum 10 billion VND (~US$ 440,000), |
| Minimum Number of shareholders | ≥ 1 (individual or corporate) | Owned by head office | Owned by head office | ≥ 3 (individual or entity) |
| Limited Liability Protection | ||||
| Import- Export Activities | ||||
| Be a Shareholder of Another Entity | ||||
| Conversion to other entity type | ||||
| Corporate Income Tax | Depending on the business industries | No business activities that yield profit | Depending on the business industries | Depending on the business industries |
| Benefits |
|
|
|
|
| Setup Time | 6 -8 weeks | 4 -6 weeks | 4 -8 weeks | 6 -8 weeks |
| Most suitable for | Small businesses to generate profit | Quick setup for sponsorships and market research |
Your first step to buying a company should always be performing adequate research and due diligence. It’s best to start by identifying the top business opportunities and whether your product has a prospective market.
Once you have identified a promising industry, you can search for potential businesses to acquire. You should have some criteria to evaluate potential businesses, such as
Determining the value of a business should be based on a specific approach, such as:
With the estimated value in mind, you may also consider negotiating the price with the seller to reach a mutual agreement.
With this step, you’re essentially auditing the company for any irregularities that may compromise your future operations. Due diligence is often broken down into:
Additionally, some factors are optional to the specific company you want to own:
After completing due diligence, it’s time to finalize the purchase of the company. Make sure all the legal, financial, and licensing information are in order before signing the agreement.
To minimize disruptions, it’s recommended to employ a third party for the ownership transfer. Notify employees, customers, suppliers, and stakeholders of the change before transferring assets, licenses, and updating legal documents.
A local nominee company is a company set up by a local representative (custodian) of a foreign investor or business. Together, the two parties sign a custodian agreement (or a nominee arrangement) so the representative can manage securities and assets on behalf of the foreign entity. In short, this company is considered a local company and enjoys the included benefits.
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Yes, foreign investors who want to expand to Vietnam can set up a foreign-owned company in the country. The most common type of company setup for foreign ownership is an LLC (Limited Liability Company) due to its simple business structure and faster setup timeline. Depending on the type of business entity you want to pursue, there are further regulations for foreigners to follow when establishing a company in Vietnam.
There are four types of entities: Limited Liability Company (LLC), Joint-stock Company (JSC), Branch Office and Representative Office.
Although local laws don’t stipulate any minimum capital, 25-30,000 USD is commonly considered as the minimum capital investors should register to ensure smooth incorporation and business activities.
Yes. The Vietnamese law enables foreigners to open 100% foreign-owned companies in most business sectors. There are a few business sectors that you are restricted from, namely the following:
Yes, there are several options suitable for investors who wish to expand without forming a legal entity.
The process of starting an LLC or JSC in Vietnam takes approximately 40-60 days. If you want to start operating a business as soon as possible, we recommend purchasing a shelf company. With this method, InCorp can transfer the management control to you within a few working days.
Both local nominee companies and shelf companies are fast ways to incorporate business entities and penetrate the Vietnamese market successfully. A local nominee company is established through a nominee agreement with a trustworthy local partner such as InCorp. In this case, the company is considered as a local company, requirements for its establishment are not that strict, and it takes around 10 working days to incorporate a local company in Vietnam. A shelf company is a previously established business with zero business activity and transactions. Investors who purchase a shelf company can start their business operations almost immediately.
Underestimating the role of a business partner or local nominee are one of the common business mistakes in Vietnam. Choosing a reliable local partner for your company is key to success in the country while reducing the potential risks. InCorp offers local nominee services without any interventions to your business processes. We also allow our partners to terminate the contract sooner that its expiry date.
