SETTING UP A BUSINESS IN VIETNAM

Step 1: Choose a Business Structure

Vietnam permits 100% foreign ownership of a business for most sectors. Yet before choosing which type of company to open in Vietnam, it is important to consider different aspects of the target entity types, such as differences in structure, legal liability, statutory compliance requirements, time required to establish it, what types of activities it can engage in, and more. These considerations help to identify the appropriate business constraints, costs, requirements and risks, necessary to enable the company’s future targeted capabilities, developments, and growth. The below links explain these factors for each of the main entity types that can be set up in Vietnam.

There are several types of foreign-invested corporate vehicles in Vietnam

• Limited Liability Company (LLC)
• Joint Stock Company (JSC)
• Partnership Company (PC)
• Business Cooperation Contract (BC)
• Public-Private Partnership (PPC)

Step 2: Investment registration certificate application

The first step in the Vietnamese corporate establishment process is an application for an Investment Registration Certificate (IRC). This is required of all foreign owned investment projects and establishes the right of the foreign enterprise to invest within Vietnam.

To apply an investor must prepare:

• Application for implementation of investment project (this should include details of the project in Vietnam);
• Proposal of investment project (should include the details of the investment project, including lease agreements or land use needs);
• Financial statements (of the last two years of a company’s operation; additional information may be required to prove financial capacity);
• Legal papers of the investors and its authorized representative (in case the investor is an organization);
• Lease agreement or memorandum of understanding (MOU); and,
• Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with regulations of law (if any).

Step 3: Enterprise registration certificate application

The Enterprise Registration Certificate (ERC) is required for all projects that seek to set up new entities within Vietnam. When obtained, the ERC will be accompanied by a number that will double as the tax registration number of the entity.

As part of the application process, the following information should be prepared:

• Application for enterprise registration;
• Company charter;
• List of all board members;
• List of legal representatives; and
• Letters of appointment and authorization

Step 4 – Post licensing procedures

Once the IRC and ERC have been issued, additional steps have to be taken to complete the procedure and start business operations. This includes:

• Seal carving;
• Bank account opening;
• Labor registration;
• Business license tax payment;
• Charter capital contribution; and
• Public announcement of company establishment

Reference:

• https://investmentpolicy.unctad.org/investment-laws/laws/152/viet-nam-law-on-investment
• https://archive.doingbusiness.org/en/data/exploreeconomies/vietnam
• https://www.vietnam-briefing.com/doing-business-guide/vietnam/company-establishment/company-setup-process-and-requirements-in-vietnam
• https://www.vietnam-briefing.com/doing-business-guide/vietnam/company-establishment
• https://jdi.group/setting-up-a-business-in-vietnam-complete-guide/
• https://thaibiz-vietnam.com/wp-content/uploads/2020/11/business-20190116-111032-552007.pdf