Establish Company in Vietnam: What 8 Steps Guide to Follow?

 When foreign investors invest in Vietnam, they could establish company in Vietnam. Foreign investors have the right to choose the appropriate forms of enterprise such as a limited liability company, joint stock company, etc.

Why foreign investors invest and establish a company in Vietnam?

Vietnam offers a compelling environment for foreign investors seeking to establish company in Vietnam. There are several reasons why investors should consider Vietnam as their business destination.

Firstly, Vietnam boasts a rapidly growing economy, characterized by robust GDP growth and a favorable business climate. The country has implemented various market-oriented reforms, attracting foreign investment and fostering a dynamic entrepreneurial ecosystem.

Additionally, Vietnam benefits from a strategic geographical location, serving as a gateway to the vibrant markets of Southeast Asia. Its membership in regional trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the ASEAN Economic Community (AEC), provides investors with access to a vast consumer base and favorable trade conditions.

Furthermore, Vietnam offers a young and skilled workforce, with competitive labor costs, making it an attractive destination for manufacturing and service industries. The government has also taken steps to enhance transparency, streamline administrative procedures, and improve investor protection, demonstrating its commitment to facilitating business operations.

Overall, Vietnam presents a promising investment landscape, offering market potential, strategic advantages, and a supportive business and legal environment for investors seeking to establish a company in Vietnam.

8 Important Steps Guide to Establish Company in Vietnam

Step by step to set up company in Vietnam

Step 1: Register the investment project

Step 2: Apply for Certificate of investment registration

Step 3: Apply for the certificate of business registration

Step 4: Publish the content of the business registration

Step 5: Registered business stamp

Step 6: Notice of use of stamp

Step 7: Open bank account

Step 8: The post licensing procedures

Step 1: Register the investment project to establish company in Vietnam

Investors submit an investment project registration file to the Business Registration office of the province or city or the management board of an industrial zone, an export processing zone or a high-tech zone for the approval of an investment project during the period within 15 days (without time for clarification).

Step 2: Apply for Certificate of investment registration

After approval of the investment project, investors submit a valid record to the Department of Planning and Investment within 10 days to apply for a business registration certificate in Vietnam.

Step 3: Apply for the certificate of business registration

After obtaining the business registration certificate, the investor shall submit the application for enterprise registration certificate to the enterprise registration office within 3 days.

Step 4: Publish the content of the business registration

After being granted the certificate of enterprise registration, the investor shall disclose information about the enterprise on the national enterprise registration portal within 30 days, including the following information:
i, Business lines;
ii, List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Step 5: Registered business stamp

The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:
-Company’s name;
-Business code.

After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.

Step 6: Notice of use of stamp

After having stamp made, investors submit notices on use of stamp forms to the Investment registration agency. After receiving the record, the Investment registration agency issues a receipt for the enterprise, publishes the notice of the enterprise on the National Business Information Portal and issues a notice of the posting, stamp samples of enterprises, branches and representative offices for enterprises.

Step 7: Open bank account

Investors need to open two types of bank accounts, namely the investment capital account to receive the investment amount and the transaction account for conducting daily transaction in Vietnam.

Step 8: The post licensing procedures

For the conditional business lines:
Investors investing in conditional businesses lines as must apply certificate of business qualification, practicing certificates, professional liability insurance, legal capital requirements, etc. before conducting business in Vietnam.

How a law firm in Vietnam could help establish company in Vietnam?

Establishing a company in Vietnam requires careful adherence to these steps and compliance with relevant regulations, particularly for businesses with conditional requirements.

The above outlines the process to establish company in Vietnam for foreign investors. By engaging the services of a reliable law firm in Vietnam, investors can navigate through these steps efficiently and ensure compliance with legal requirements, ultimately facilitating a smooth and successful establishment of their business in the country.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

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Establishing a Company in Vietnam: A Comprehensive Guide for Foreign Investors

 Vietnam has emerged as a preferred destination for foreign investors, driven by its dynamic economy, strategic location, and supportive government policies.

Establishing a company in Vietnam offers opportunities amidst the global economic stagnation exacerbated by geopolitical tensions.

With a young population, a growing middle-income working class, and abundant talent in information technology, Vietnam presents a strong ground for business ventures.

However, as with any overseas investment, entering the Vietnamese market comes with its own set of challenges and risks. This guide aims to provide foreign investors with essential insights and practical steps for successfully establishing a company in Vietnam.

Establishing a Company in Vietnam: A Comprehensive Guide for Foreign Investors

Understanding the Vietnamese Market

1.The Economic Landscape

Vietnam’s economy has been one of the fastest-growing in Southeast Asia, consistently achieving robust GDP growth rates. Despite global economic uncertainties, Vietnam’s strategic initiatives and trade agreements have fortified its economic resilience. The country’s economic policies are geared towards attracting foreign direct investment (FDI), with various incentives and support mechanisms in place for foreign businesses.

2.Demographic Advantage

Vietnam boasts a young and dynamic population. This demographic trend is accompanied by a burgeoning middle-income class, which fuels domestic consumption and drives economic growth. The young workforce is not only abundant but also increasingly skilled, particularly in sectors such as information technology.

3.Entrepreneurial Spirit

The entrepreneurial spirit is deeply ingrained in Vietnamese culture. Small and medium-sized enterprises (SMEs) are the backbone of the economy, and there is a growing trend of startups and innovation-driven businesses. This entrepreneurial environment fosters a competitive yet collaborative business landscape, making Vietnam an exciting place for new ventures.

Types of Business Entities in Vietnam

When establishing a company in Vietnam, foreign investors can choose from several types of business entities, each with its own legal and operational implications. The most common types include:

1.Limited Liability Company (LLC)

An LLC is suitable for small and medium-sized enterprises. It can be wholly foreign-owned or a joint venture with Vietnamese partners. The liability of the owners is limited to their capital contributions, making it a secure option for foreign investors.

2.Joint-Stock Company (JSC)

A JSC is ideal for larger businesses and requires at least three shareholders. It can also be wholly foreign-owned or a joint venture. JSCs are often chosen for ventures that anticipate substantial growth and potential public listings.

Other forms of entities with different sets of benefits could be established for different purposes as following:

3.Representative Office

A representative office is suitable for foreign companies looking to explore the Vietnamese market without engaging in direct business activities. It allows companies to conduct market research and establish a business presence but cannot generate revenue.

4.Branch Office

A branch office can conduct business activities and generate revenue. It must have a parent company overseas and operates as an extension of the foreign entity.

Legal Framework for Establishing a Company in Vietnam

1.Investment Laws and Regulations

The legal framework for foreign investment in Vietnam is primarily governed by the Law on Investment and the Law on Enterprises. These laws outline the requirements, procedures, and incentives for foreign investors. Key government bodies involved in regulating foreign investment include the Ministry of Planning and Investment (MPI) and the provincial Departments of Planning and Investment (DPI).

2.Investment Registration Certificate (IRC)

The first step in establishing a company in Vietnam is obtaining an Investment Registration Certificate (IRC). The IRC application process involves:

- Preparation: Collect necessary documents, including the application form, investor’s legal status documents, financial statements, and a detailed business plan.

- Submission: Submit the application to the DPI.

- Approval: The DPI reviews and approves the IRC between 15 – 25 working days for non conditional projects.

3.Enterprise Registration Certificate (ERC)

After obtaining the IRC, the next step is to secure an Enterprise Registration Certificate (ERC). The ERC application process involves:

- Preparation: Gather documents such as the application form, company charter, list of members/shareholders, and the IRC.

- Submission: Submit the application to the DPI.

Approval: The ERC is typically issued within 3 – 5 working days.

Post-Registration Procedures Establishing a Company in Vietnam

Once the IRC and ERC are obtained, there are several post-registration procedures that must be completed to ensure the company is legally operational:

1.Seal Carving

Every company in Vietnam is required to have an official seal. The seal is used to authenticate documents and can be obtained from a licensed seal carving service.

2.Tax Registration

Registering with the local tax office is mandatory. This involves obtaining a tax code and registering for Value Added Tax (VAT) and corporate income tax (CIT).

3.Bank Account

Opening a corporate bank account in Vietnam is necessary for all financial transactions. This involves providing the bank with the company’s IRC, ERC, and other relevant documents.

4.Capital Contribution

The capital contribution, as stated in the company charter, must be deposited within the stipulated timeframe, usually 90 days from the issuance of the ERC.

5.Public Announcement

The company registration information must be published in the National Business Registration Portal. This public announcement ensures transparency and compliance with Vietnamese laws.

Key Considerations for Foreign Investors Establishing a Company in Vietnam

1.Capital Requirements

Different sectors have varying minimum capital requirements. It is crucial to ensure that the proposed capital meets the regulatory standards for the specific industry.

2.Business Scope

Clearly defining the business activities in the company charter is essential. This ensures that the company’s operations align with local regulations and avoid any legal complications.

3.Compliance with Vietnamese Laws

Maintaining compliance with Vietnamese laws and regulations is critical. This includes adhering to tax obligations, financial reporting, and labor laws. Engaging a local legal advisor can help navigate these requirements effectively.

4.Risks and Challenges

While Vietnam presents numerous opportunities, there are inherent risks and challenges associated with establishing a company in Vietnam:

5.Cultural Differences

Understanding and adapting to Vietnamese culture and business practices is vital. The Vietnamese way of doing business often emphasizes relationships and trust, which can differ significantly from Western practices.

6.Market Entry Risks

Entering a new market always involves risks, such as unfamiliar regulatory environments, competition, and market dynamics. Thorough market research and strategic planning are essential to mitigate these risks.

7.Different Buying Behaviors

Vietnamese consumers have unique buying behaviors and preferences. Tailoring products and marketing strategies to meet local demands is crucial for success.

8.Legal and Regulatory Risks

Vietnam’s legal and regulatory framework can be complex and subject to change. Staying informed about the latest laws and regulations is necessary to ensure compliance.

Opportunities in the Vietnamese Market When Establishing a Company in Vietnam

Despite the challenges, the Vietnamese market offers significant opportunities for foreign investors:

1.Growing Economy

Vietnam’s robust economic growth and increasing integration into global trade networks provide a favorable environment for business expansion.

2.Young and Skilled Workforce

The young and increasingly skilled workforce, particularly in information technology and engineering, is a valuable asset for businesses.

3.Government Incentives

The Vietnamese government offers various incentives for foreign investors, including tax breaks, reduced land lease fees, and streamlined administrative processes.

4.Strategic Location

Vietnam’s strategic location in Southeast Asia provides access to major global markets, making it an ideal hub for business operations.

Establishing a company in Vietnam is a promising venture that offers numerous opportunities amidst a rapidly growing economy.

The process involves navigating a well-defined legal framework, understanding the local market, and addressing the unique challenges of doing business in a foreign country.

By following the steps outlined in this guide and leveraging the insights provided, foreign investors can establish and grow their businesses in Vietnam.

For personalized assistance or more detailed information, consulting with a legal expert in Vietnam can help streamline the process and ensure full compliance with local laws.

Embrace the opportunities and prepare for the challenges, as establishing a company in Vietnam can lead to significant rewards in one of Asia’s most dynamic economies.

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How to establish company in Vietnam?

     Foreign investors may invest in the form of 100% capital to establish company in Vietnam, being limited liability company, joint stock company, partnership company.

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates. Investment certificates shall concurrently be business registration certificates. Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

A project dossier for establishing company in Vietnam shall comprise:

• Registration/Request for issuance of Investment Certificate;

• A report on financial capability of the investor;

• Draft of the company’s charter;

• List of members of company;

• Copy of the people’s identity card, passport or other lawful personal certification, for individual members;

• Copy of the establishment decision, business registration certificate or other equivalent document, for member organizations;

• Copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives.

• Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;

• Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;

• The joint-venture contract or Business Cooperation Contract (BCC);

• Other documents required by Vietnam law.

The establishment of a company in Vietnam would take from 30 days. The extra time might be needed in case the investment area is conditional or the State government needs to examine the investment project. Minimum capital, special licenses or other conditions might be required in certain investment projects.

With highly professional staff and great experience in foreign investment, ANT Lawyers would like to support you to establish company in Vietnam.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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