A Limited Liability Company (LLC) is the most common legal entity type in Vietnam. It is the ideal business identity for small and medium-sized enterprises (SMEs), considering its simple corporate structure that requires only one founder.
Furthermore, LLC is an excellent choice for entrepreneurs who intend to protect their personal assets, as the liability of the shareholders is limited to their shares only.
Benefits of a Limited Liability Company in Vietnam
Among the many benefits of setting up a Limited Liability Company in Vietnam, here are the most notable benefits that can be enjoyed:
- Protection of personal assets: as briefly mentioned above, in case of financial lawsuits or challenges, the personal assets of the shareholders are protected. No banks and creditors can take the assets away, not even the government.
- Less paperwork and streamlined process: it takes significantly faster to establish an LLC compared to larger corporations and other entity types in Vietnam.
- Continued existence: in the event of the death of a shareholder or several shareholders, an LLC will not cease to exist.
- Expansion made easy: raising capital via financial institutions, venture capitalists and angel investors is much easier with an LLC.
Requirements for Registering a Limited Liability Company in Vietnam
Limited liability companies in Vietnam can be set up by individuals or companies as investors. The requirements may differ based on the kind of investor.
REQUIREMENTS AS A COMPANY
Investors who intend to register a Limited Liability Company as a company, the following requirements must be satisfied:- A registered business address: this can be a physical or a virtual address. It also depends on the business license requirements.
- Business Certificate (Certificate of Establishment) or an equivalent paper that can certify the legal status.
- Charter Capital: the amount must be high enough to cover the company’s expenses, such as office lease, salaries, operational expenses, etc, for at least the next six months. Generally, for a simple FDI LLC, the recommended amount is a minimum of 20,000 USD.
- Financial documents: for example, the bank statement with the same or bigger amount of charter capital intended to invest in Vietnam. The investor(s) must submit any legalised copies of their financial documents.
- Legal Representative in a management role or higher, living in Vietnam full time, regardless of nationality.
- Official Identity: notarised copies of the Investor and Legal Representative(s)’s official ID (i.e. passport).
REQUIREMENTS AS AN INDIVIDUAL
Investors who intend to register a Limited Liability Company as an individual, the following requirements must be met:
- A registered business address: this can be a physical or virtual address. It also depends on the business license requirements.
- Legal Representative in a management role or higher, living in Vietnam full time, regardless of nationality.
- Charter Capital: this amount must be high enough to cover the company’s expenses, such as office lease, salaries, operational expenses, etc. Generally, for a simple FDI LLC, we recommend a minumum of 20,0000 USD.
- Legalised Bank Statement: you will need to provide a legalised copy of your bank statement with the balance showing it is larger than the Charter Capital amount. The bank statement will need to be legalised at the Vietnamese Embassy in the country of your bank statement and then translated and notarised in Vietnam.
- Notarised or legalised copies of the Official Identity of the Investor and Legal Representative(s).
Procedures for Limited Liability Company Establishment in Vietnam
In general, foreign investors are required to go through the following procedures to register their limited liability companies:
Investment Registration Certificate (IRC) application Business sectors that require sub-licenses are travel (international/domestic business license), printing (printing operation license) and security (certificate of social security), among others.
Enterprise Registration Certificate (ERC) application After a business is legally registered, an ERC will be issued by a business registration agency. An ERC is a document, can be softcopy or hardcopy, that contains information on enterprise registration.
Required licenses or certificates and sub-licenses (if any) application An IRC is required for investments whose 51% or more of charter capital is owned by foreign investors. An IRC is a document that contains information on a registered investment project.
Documents and payments submission for post license requirements (i.e. opening a bank account, paying for business taxes, contributing to charter capital, ordering e-invoice, providing e-signature and company stamp, etc.)
The whole registration process takes approximately two months. However, the time may slightly vary, depending on the completeness of documents and business activities or sectors.
How Cekindo Can Assist You
If you think that a Limited Liability Company is what you need for your business in Vietnam and would like to request for further information on its establishment process, contact us by filling in the form below. One of our consultants will be in touch with you shortly.
