- May 16, 2023
- Posted by: GBS
- Categories: Business, Legal
Opening a business in Vietnam as a foreigner can be an attractive option due to the country’s developing economy, fast-growing middle-class population, and favorable requirements.
In this guide, we will provide you with a step-by-step process for opening a business in Vietnam.
Can Foreigners Start a Business in Vietnam?
Foreigners can own up to 100% shares in a company in Vietnam. However, certain industries such as tourism and advertising require a Vietnamese Joint Venture Company. The Vietnam company system adheres to the general rules of the World Trade Organization (WTO), making it easier for foreigners to operate. In some cases, approval from the industry’s governing ministry may be necessary if the WTO and local laws are unclear on a business matter.
Requirements for Setting Up a Company in Vietnam
Several requirements must be met when setting up a company in Vietnam. These include:
Capital Requirements: There is no minimum capital requirement for setting up a company in Vietnam. However, the law states that a new company should have enough capital to sustain itself until it no longer needs external funding. On average, most companies in Vietnam require an initial capital investment of VND 230 million ($10,000), with small-scale companies operating on as low as VND 69 million ($3,000) capital investment. Certain sectors such as the Banking, Insurance, and Finance industry have minimum capital requirements.
Directorial Requirements: A company must have one resident director with a local address. The resident director can be Vietnamese or foreign, but they must have a local address in the country. Non-Vietnamese directors require a work permit unless they are founding members of the company. Founding members who are non-residents won’t need a work permit, provided they apply for an exemption.
Local Business Address: All companies must have a local address in Vietnam. While some companies can get around this requirement with a virtual address, physical addresses are mandatory for most company types.
How Long Does It Take to Open a Company in Vietnam?
The total time for registering a new company in Vietnam can vary from one month to five weeks, depending on the individual processes. Extenuating circumstances can extend the registration period to up to 20 weeks. The duration of the registration depends on the licenses and sub-licenses required for each industry.
Alternatives to Company Registration in Vietnam
If you don’t want to set up or register a company in Vietnam, there are other options to conduct business through third-party institutions, such as:
Representative Office: A representative office can help you run a business in Vietnam without having to register a company. Companies such as GBS can provide this service.
Employer of Record: An employer of record can hire and pay employees on your behalf while meeting all local employment conditions and laws.
Importer of Record: An importer of record lets you import goods into Vietnam without registering a company, avoiding any delay caused by registration and approval of the necessary import licenses.
In conclusion, starting a business in Vietnam as a foreigner is a viable option due to the favorable requirements and the country’s developing economy. By following the steps outlined in this guide, you can open and register a business in Vietnam with ease.