- October 5, 2022
- Posted by: GBS
- Categories: Business, GBS
Within this article, you will find seamlessly guide through the government requirements, removing the confusion and providing clarity for what can be an otherwise drawn-out process for starting a business in Vietnam.
Select the best structure for your business.
In Vietnam. you can establish a 100% foreign-owned company or a jointly foreign and domestic owned enterprise. The most popular corporate structures are:
- Joint stock company (JSC): With a JSC, you can trade with minimum 3 owners in the structure of 100% foreign owned or JV and the management board is a must. This is an ideal for foreign investor who require complex corporate structures.
- Limited liability company (LLC): This is one of the most common structure for foreign investor to set-up operations in Vietnam. You can trade with a single or multiple owners and it can be in the form of 100% foreign-owned or JV. A legal representative is required.
- Representative office (RO). This is the best option for for foreign companies, which are seeking to research and study the market as you cannot trade in Vietnam. The RO is 100% owned by head office, no shareholders or partners required but Chief representative is a must.
In case you are not sure about which structure is right for your business, you should schedule a free consultation with GBS, the specialists will advise you about this, even on anything from capital investment, full foreign ownership options to shareholder requirements and more.
Preparation of required documents
- Lease agreement – The investor must have a lease (or pre-lease) agreement in place for where the company will be registered.
- Proof of financial capacity – Investor must demonstrate that they have sufficient funds at the bank or the financial capacity to meet their investment commitments in Vietnam, and
- Investor documents – Each investor will need to have appropriate notarized/legalized documents from their home country
Investment Registration Certificate (IRC) Application
As a foreign investor, you have to register an “investment project” — the purpose of the foreign investor’s company. The resulting IRC permits the foreign investor to commence the establishment of their company in Vietnam.
Enterprise Registration Certificate (ERC) Application
Enterprise registration certification is the must-have certificate when you set up a business in Vietnam. This certificate can be seen as proof showing your business is officially formed in Vietnam with approval from the government.
Foreign investor will be granted an enterprise registration certificate when the business line to be registered is not banned; company name complies with the laws; It has a valid enterprise registration dossier;
The procedures for enterprise registration: The investor or authorized person shall submit a dossier to the business registration agency. The agency shall examine the validity of the dossier and grant an enterprise registration certificate. If refused, it shall notify in writing such to the investor, clearly stating the reason and requirements for dossier modification and supplementation.
Initial post-establishment registrations
These are procedures implemented after company incorporation, which include making public notification of the new company; purchasing a company seal and announcement of the seal specimen; drafting decision of appointment of the director
Additional post-licensing and sub-licensing applications
After successfully registering a company in Vietnam, the investor may need to apply for additional licenses or sub-licenses, according to licensing requirements and conditions for specific sectors, industries, and business lines.
Charter capital contribution
The enterprise capital (investment capital) is comprised of charter capital and loan capital for company in Vietnam, which is committed to contribute by the investor within a certain period as stated in the charter and must be fully contributed within 90 days from the date on which the company is established.
Essential business and legal services
In case you are not able to register a company in Vietnam by yourself, a business and legal services firm will prepare and file the documents and complete your company registration with the DPI.
They will review your lease agreement, liaise with your lessor to discuss and obtain the lease documents, and arrange for you to sign the lease agreement.
The services firm will also assist you with the process of opening bank accounts (covering Capital and Current accounts). The specific bank where the accounts will be opened will be discussed and agreed with the company upon commencement.
They can also support you to maintain compliance with local requirements with accounting services and appointment of a Chief Accountant. Reduce tax burden and ensure on-time tax filing to avoid penalties.