Tiếng Việt
Vietnam Company Setup 2023: Comprehensive Guide
Setting up a company in Vietnam has become an attractive venture for many business enthusiasts. With its rapidly growing economy, strategic location, and abundant resources, Vietnam offers an ideal environment for entrepreneurs and investors. In this blog, we’ll delve deep into the intricacies of how to set up a company in Vietnam, outlining the steps, benefits, and potential challenges you might encounter along the way.
Essential requirements for opening a company in Vietnam
To set up a company in Vietnam, you have to meet the following requirements:
- Business Conditions: You have to comply with the regulations and laws of Vietnam regarding your business sector and activities.
- Investment Capital: You have to prove that you have enough funds to operate your business in Vietnam, either by injecting capital or by showing your financial statements.
- Business Address: You have to register a physical address for your company in Vietnam, which can be either a rented office or a co-working space.
- Company Structure: You have to decide on the type and structure of your company, such as a limited liability company, a joint-stock company, or a branch office.
- Legal Representative: You have to appoint a legal representative for your company, who can be either a Vietnamese citizen or a foreigner with a valid work permit and visa.
- Required Documents: You have to prepare and submit the necessary documents for your company registration, such as the application form, the business registration certificate, the charter, the investment certificate, and the tax code.
Business Conditions
Foreign investors who want to start and operate a business in Vietnam need to be aware of the legal restrictions and requirements that apply to their sector when setting up a company in Vietnam. Some business activities are fully open to foreign ownership, while others may have limitations or conditions. Therefore, it is advisable to seek legal advice before registering a company in Vietnam. Some examples of business activities that foreign investors can register with 100% ownership are:
- Trading, which covers importing, exporting, wholesaling, and retailing of goods
- Business consulting
- IT services (which can benefit from tax incentives)
- Manufacturing
Investment Capital
Investment capital consists of:
- Contributed capital, which must be fully paid within 90 days after the company is established
- Loan capital (optional)
Every company in Vietnam has to declare its investment capital amount. The investors also have to show their financial capacity at the time of registering their investment project with documents such as: bank balance certificates, or financial statements. How to set up a company in Vietnam? Legally, there is no minimum capital requirement, except for some specific industries. However, the local licensing authority will review and evaluate your proposed investment capital, based on your business activities and project scope. The minimum capital will be decided on a case-by-case basis.
[New update]: Lately, many licensing authorities, especially in the north, have been imposing a high minimum investment capital requirement. Therefore, investors should be ready to invest more money in your new project as per the guidance of your legal team.
Moreover, the longer the visa term will be granted to investors, the more capital contribution is required.
Business Address
According to Article 42 of the Law on Enterprise 2020, a company in Vietnam must have a business address that serves as the registered office and principal place of business. When considering how to register a company in Vietnam, the optimal location for your company is the one where you will do most of your business activities. It is strongly recommended that you visit the location in person to ensure that it suits your business needs.
Company Structures
Foreign investors who want to set up a business in Vietnam have three main options for company structures: Single Member LLC, Multiple Member LLC, and Joint Stock Company.
| Single Member LLC |
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| Multiple Member LLC |
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| JSC |
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The type of company structure you choose in Vietnam depends on two factors: the number of investors and the management structure you prefer. For small and medium businesses, LLC is a good option because it has a simple management structure and lower corporate compliance costs.
Moreover, the tax treatment in Vietnam is the same for all company structures.
Legal Representative
A legal representative is a person who acts on behalf of the company and exercises the rights and obligations arising from the company’s transactions. When considering how to set up business in Vietnam, it’s essential to understand the role of legal representatives. A Vietnam company can have multiple legal representatives, who can hold different positions such as Director, General Director, CEO, CFO, President, etc. Both residents and non-residents of Vietnam can be legal representatives of a Vietnam company as long as at least one of them resides in Vietnam. There is no legal requirement to hire a local legal representative, it depends on your business needs.
Required Documents
A list of documents is needed from the foreign investors. They also need to legalize the documents of the corporate investors (i.e. company registration certificate).
| INDIVIDUAL INVESTOR | CORPORATE INVESTOR |
| Passports of all investors |
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| Bank Account Balance Certificate
(Note: The account’s balance must be equal to or more than the value of the declared capital) |
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| Lease Contract and its legal documentation related to the business address | Lease Contract and its legal documentation related to the
business address |
Steps to Establish a Business in Vietnam
If you want to establish a company in Vietnam, you need to complete 6 steps:
- Step 1: Find a suitable location for your business
- Step 2: Gather the necessary documents
- Step 3: Register your company with the authorities
- Step 4: Set up company bank accounts
- Step 5: Obtain additional licenses/permits (if applicable)
- Step 6: Fulfill post-registration obligations
Here are more details about each of these steps.
Step 1: Securing a Location for Your Business
To establish your business, you have to secure a physical location that meets your needs and budget. You should negotiate the terms and conditions of the lease agreement with the property owner and sign it. You should also ask the owner to provide you with the necessary legal documents, such as a proof of land ownership or usage rights.
Step 2: Gather the Necessary Documentation
As instructed by your lawyers, you will start to gather all the required documents, certify them, and translate them into Vietnamese. The lawyers will fill out the complete application forms that need your signature and stamp (if any).
Step 3: Company Registration Process
To obtain an Investment Registration Certificate, you will need to wait for about 15 working days. To obtain an Enterprise Registration Certificate, you will need to wait for about 5 working days. During this process, your legal team will handle all the necessary tasks, such as dealing with the local authorities, preparing the legal documents, and informing you of any updates. One of the critical aspects to consider is the cost of setting up a company in Vietnam. You should ensure that your legal team communicates clearly and provides you with detailed information on the progress of your company registration as well as associated costs.
Step 4: Setting Up Your Company Bank Accounts
You will need two types of bank accounts for your company after it is set up in Vietnam:
- A Direct Investment Capital Account, or DICA, is for transactions related to your investment activities in Vietnam. You can use this account to receive the capital that you contribute to your company and to transfer the profit back to your home country. (Please note that you have to transfer the capital to this account within 90 days after your company is set up).
- A Current Account in VND currency is for your company’s daily operations, such as paying contracts, salaries, and taxes.
Step 5: Obtain Additional Licenses or Permits as Needed
To conduct any regulated activities in Vietnam, your company must first obtain the necessary licenses or permits as specified in requirement #1 above. This is a prerequisite for any conditional business operations.
Step 6: Meeting Post-Registration Obligations
Some post-incorporation obligations for your Vietnam company include: completing the investment capital contribution and filing tax returns within the specified time frames.
To establish and run a company in Vietnam, you will need to spend at least USD 4.080 in the first year. This amount covers the expenses for renting a business location, getting the necessary incorporation services, and fulfilling the post-incorporation compliance requirements.
How Much Does It Cost to Establish a Company in Vietnam?
| Items | Descriptions | Minimum Costs |
| Rent a business address | Yearly rent for a Virtual Office/Office Space/Industrial Property | $970 |
| Company formation service | Our firm provides comprehensive legal assistance for the establishment and operation of a company in Vietnam. We will guide you through the necessary procedures and documents, and help you register your business with the relevant authorities. Our fee for this service is competitive and transparent, and reflects our expertise and experience in this field. | $1.200 |
| Initial set-up works |
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$270 |
| Accounting and Audit |
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$1,600 |
| TOTAL (minimum cost for the first year of operation) | $4.080 |
In conclusion
Taking the steps to set up a company in Vietnam can be a transformative decision for entrepreneurs. With its burgeoning economy and a favorable business environment, Vietnam is steadily becoming a hotspot for global investors. However, like any business venture, it’s crucial to navigate the process with knowledge and foresight. By understanding the intricacies and ensuring all requirements are met, your journey to set up a company in Vietnam can be both rewarding and prosperous. As always, seek expert advice and be prepared to adapt to the dynamic Vietnamese market.