To do business in Vietnam, you must first register your firm with the government in order to obtain authorization and a business registration certificate in Vietnam to operate.
This registration is normally done through the Provincial or City Department of Planning and Investment’s Business Registration company. We will educate you through the government regulations, reducing confusion and offering clarity in what may be a lengthy process for creating a business, so that your Vietnamese company is created and also ready for operation.
Vietnam is now one of the emerging countries with market access policies that attract a large number of investors. Evidence suggests that, in the last five years, the flow of FDI into Vietnam has expanded considerably due to foreign investor investment. As a result, we would like to share some important information with you regarding the steps to register a company in Vietnam.
Let’s learn more!
Formal Roles and Duties
The following are the key positions that any corporation must have in Vietnam:
- Legal Representative: More than one (one) Legal Representative may be appointed, although at least one must normally live in Vietnam so that he/she could help you in getting a business registration certificate in Vietnam.
- The (General) Director: The person in charge of running the firm on a daily basis. Please keep in mind that these two (two) posts are open to people of any nationality, although international appointees may face Work Permit issues.
- Chief Accountant: Once the business is founded, this post is appointed and also takes on many of the functions that a “Company Secretary” would in other jurisdictions.
Framework
In terms of company formation in Vietnam, businesses can have one of two (two) fundamental forms:
- LLC (Limited Liability Company)
- JSC (Joint Stock Company)
In this regard, LLCs are the most common management entity for foreign investors due to their relative ease of operation, whereas JSCs have more specifications, including a minimum of three shareholders, and also are desirable for companies that plan to raise capital through share issuance and list on a stock market in the future.
Furthermore, if international firms do not wish to form an official corporation in Vietnam, they may explore the following structures:
- Contract for Business Cooperation (“BCC”) between the Representative Office and a Vietnamese partner
- However, these are only applicable to particular conditions or scenarios.
Documents Required
The standard documents required for the formation of a foreign corporation in Vietnam are listed below. While the legal documents of the foreign buyer may differ depending on the country of the investors, the list below gives an overview of the documents lodged with the authorities.
Foreign Investor’s legal documents
- For corporate investors, the following documents are required: incorporation business registration certificate Vietnam, company excerpt on director and address register, constitution/charter, and also all revisions to it
- Individual investors: Individual Investor’s Passport
- The legal representative’s passport/ID card (s)
- Passport/ID Card of the Investor’s Authorized Representative(s) for the Institutional Investor
Different Employment and Investment Goals
A new firm must register its business lines and investment objectives, subject to rules or constraints pertaining to certain financial institutions in Vietnam. The new firm can only do activities/provide services that are within its designated business categories and also hold a business registration certificate in Vietnam. Although most industries are accessible to 100% foreign investment, certain activities/services, such as:
- Military, associated printing, etc. are completely prohibited.
- Partially restricted: needing collaboration under a joint venture with a VN partner in areas like tourism, advertising, logistics, and so forth.
- Special requirements and limitations: For example, extra staff certification for the license: real estate agency, accounting services, and so on.
Establishing a Bank Account
Companies can open bank accounts with professional Vietnam-based banks after receiving their ERC and completing the basic post-licensing tasks. Because of the initial vetting and paperwork procedure performed to receive the ERC, the process is significantly easier for most banks than in other nations in the area, allowing banks to depend on this verification for the majority of their needs.
Charter Capital and Investment Capital
The “investment project’s” capital must be mentioned in the IRC, and the business charter capital must be stated on the ERC, specifically:
- Investment Capital: the entire amount of funds/properties to be invested in the “investment project,” including:
- Investors’ capital
- Loans
- Another source of capital
- Charter Capital: the company’s “paid-up capital” as reported on the ERC. Amount of capital that employees or shareholders give or agree to spend within a specific time frame specified in the company’s charter, but no later than 90 days from the issuing date of the ERC where the newly formed company is established.
