Set up company in Ho Chi Minh City: the Essential Guide

 Vietnam’s financial capital, Ho Chi Minh City, is a vibrant metropolis of over 10 million inhabitants and accounts for one-third of Vietnam’s total GDP. It is widely regarded as one of the fastest expanding marketplaces for technology, manufacturing, and the top developing property market in Asia-Pacific. Hence, the investors that set up company in Ho Chi Minh City could enjoy the opportunities the Vietnamese market has to offer.

Set up company in Ho Chi Minh City can be made easy

Vietnam has offered first mover advantages for foreign investors to tap into HCMC’s market and contribute to the growing economy throughout the years.  There are still huge potentials in this growing market because of abundant labour skilled resources, growing middle income consumers.  Hence, we present all the information that you need to know before investing and setting up your own company in Ho Chi Minh City.

Company Setup Process and Requirements in Ho Chi Minh City

In Vietnam, opening a business as a foreigner is a breeze since you’re allowed to own up to 100% of any company in the most of industries. However, there are some sectors with restrictions on foreign ownership i.e. advertising, tourism, insurance, banking… In such situations, foreign investors must seek the assistance of a Vietnamese joint venture partner.

International businesses practice must be adhered to as World Trade Organization (WTO) agreements. Nevertheless, there are certain areas that approval from the corresponding ministries in Vietnam is essential for business operations i.e. Minimum Capital Requirement,  Legal Structures for Company Registration in Vietnam, Foreign Ownership Ratio…

Step by step guide to set up company in Ho Chi Minh City

Choose the right business structure
Choosing the right business structure for your company is crucial. In Vietnam, the most common types of business structures are Limited Liability Companies (LLCs), Joint-Stock Companies (JSCs), and Representative Offices. Each structure has its own advantages and disadvantages, so it’s important to choose the one that best suits the needs of your business

Compliance with Vietnamese laws and regulations
As a foreign entrepreneur, it is crucial to comply with Vietnamese laws and regulations. Make sure you have a solid understanding of the legal requirements for your specific industry and business structure. Failing to comply with the laws and regulations could result in severe penalties and fines

Register your business with the Department of Planning and Investment
One of the first steps in setting up a business in Vietnam is to register your company with the Department of Planning and Investment. You’ll need to submit the necessary documents such as a copy of the company’s charter, list of shareholders, and copy of your passport.

Obtain a business license
After your company is registered, you might need to apply for a business license. The type of license you need depends on the nature of your business. For instance, for retail trading, business license is required. The process for obtaining a business license may take some time, so it is recommended to work with a local lawyer in Vietnam to ensure a smooth and timely process.

Register for taxes
All companies in Vietnam are required to register for taxes. You’ll need to obtain a tax code and register for VAT (Value Added Tax) and CIT (Corporate Income Tax). In addition, you will need to keep careful records of your business transactions and finances to comply with tax regulations.

Open a bank account
Finally, you’ll need to open a bank account for your business. You’ll need to provide your business license and other necessary documents, and deposit the minimum required amount for covering the fee and expenses of maintaining the account.  The direct capital investment account (DICA) must be opened to receive the investment amount from oversea as committed in your investment proposal.  Vietnam has been depending on Foreign Direct Investment for economic growth hence this investment is very important for the government to track and you would better follow to transfer as committed.  It is also suggested you consider the bank that staff could speak English for better banking experience. 

In conclusion, setting up a business in Vietnam could be a complex process. It is recommended to work with a local lawyer in Vietnam to navigate the legal requirements and ensure compliance with Vietnamese laws and regulations. With the right guidance and preparation, your company can successfully establish itself in the Vietnamese market.

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Benefits of Investors to Set-up Business in Ho Chi Minh City

 Ho Chi Minh City offers many benefits for foreign companies to do business and invest.

The population of Ho Chi Minh City is of more than 10 mil, earning a higher average income than other part of the country. Consumer retail has found Ho Chi Minh City as an attractive market for investment in retail shops, malls, introducing quality consumer goods to the local.

Ho Chi Minh City offers adequate infrastructure such as the Sai Gon port systems, deep seaport access from Vung Tau port systems, Tan Son Nhat international airport, and possible Long Thanh international airport project, Saigon railway station, the expressways, etc, connecting the city to neighbouring countries in the region and other part of the world. Through setting up factories in industrial zones, processing zones, local and international manufacturing companies could take advantage of high quality labor resources at reasonable cost and move the finished goods to final destinations in US, EU with reasonable lead-time and expenses. Consequently, the city has become leading industrial city of Vietnam, contributing more than 30% industrial production, 30% GPD and 30% national income to the country’s total.

Ho Chi Minh City is also a financial center, which the biggest stock exchange is located. Many corporations, and investment companies has chosen Ho Chi Minh City to set-up management and investment offices to search for opportunities, conduct Merger and Acquisitions and other business transactions, to leverage the annual growth of the country at more than 6%.

At the same time, the city government has been improving policies to support the removal of difficulties for foreign-invested enterprises investing in Vietnam through fixing administrative procedures to shorten the administrative process, saving time for investors, offering “one-stop” mechanism at the main state agencies.

Our professional consultants and lawyers have assisted a number of foreign companies and individuals to conduct transactions, set-up companies, make investment through M&A, and actively involve in the development of Ho Chi Minh City in particular and the whole country

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Ho Chi Minh City: foreigners’ work permit in Vietnam is no longer renewable

 Ho Chi Minh City is not going to renew expired work permit in Vietnam for foreigners, noticed by Ho Chi Minh City Department of Labor, War Invalids and Social Affairs.

Ho Chi Minh City Department of Labor, War Invalids and Social Affairs (DOLISA) issued Notice No.6107/SLDTBXH-VL on May 16th, 2014 guiding the implementation of Decree No.102/2013/ND-CP detailing a number of articles of the Vietnam Labor Code regarding foreign workers in Vietnam. Pursuant to the notice hereof, in the case that expired work permits which has been issued under the provisions of Decree No.34/2008/ND-CP and Decree No.46/2011/ND-CP before the effective date of Decree No.102, enterprises shall apply to HCMC DOLISA for granting work permits under the issued procedures instead of renewal procedure provisions. In particular, for foreign workers having expired work permits and having desire to continue working in Vietnam, the sponsoring enterprise shall submit certificates of qualification, experience, criminal record in Vietnam and in foreign countries (judicial records), medical certificates and the sponsoring enterprise has to be approved by local People’s Committee to employ foreign workers.

As the current regulations, the foreign employee might be asked to present his or her work permit in Vietnam at entering or leaving Vietnam or when requested by government authority. It is suggested that enterprise wishing to employ foreign workers and foreign workers to counsel with employment lawyers in Vietnam in order to ensure compliance.

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US Investors Set up Business in Ho Chi Minh City

 United States (US) businesses are expecting to pour investment capital and set-up business in Ho Chi Minh City (HCMC) in the near future, when Vietnam and the US are members of the Trans-Pacific Partnership agreement (TPP).

Statistics from the Department of Planning and Investment of HCMC showed that in 2015, the city has attracted 26 investment projects from the US with a total capital of approximately 135.4 million USD. In the first 2 months of 2016, the US has invested an additional of 4 new projects with total capitals of 1.56 million USD. It is forecasted that after TPP takes effect, the number will increase exponentially.

The industrial zones in HCMC are attracting the most investment within three years. Currently there are more than 300 projects worth more than 600 million USD. With the launching of TPP, the city hopes to receive a new wave of investment from US businesses. The efforts to reform the city’s administration procedures are creating favorable environment for US businesses to increases investment in HCMC.

According to the representative of the US Consulate in HCMC, diplomatic relation between Vietnam and the US is getting better, creating conditions and opportunities for US investors to come and set up business in HCMC. As recognized by the American Chamber of Commerce in Vietnam (Amcharm), businesses from the 2 countries feel very excited after exploring the investment environments of each other.

According to the Amcham’s representative, the promotion of the free trade agreements and especially TPP is bringing Vietnam and the US to the center of trade cooperation. It is reflected positively in 2015 with growth rate reached 45 billion USD in terms of sales, increased by 20% compared with 36 billion USD in 2013. Currently, Vietnam is also the leading countries in ASEAN on trade balance with the US when Vietnam accounting for 25% of export turnover of the area and this figure will continue to increase in 2020.

According to representatives of the Department of Planning – Investment in Ho Chi Minh City, Vietnam American investors to increase mainly in the field of real estate, banking, services, processing technology. This is a positive signal for bringing high-income jobs for local workers. The goal of the 2020 Vietnam brought exports to the US increased by 300 billion dollars.

According to representatives of the Department of Planning and Investment of Ho Chi Minh City, investment from the US to Vietnam increased mainly in the field of real estate, banking, services, processing technology. This is a positive signal because it brings high-income jobs for local workers. The goal of Vietnam is that till 2020, export turnover to the US will increase by 300 billion USD.

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Law firm in Ho Chi Minh City

 ANT Lawyers, the law office in Ho Chi Minh City is located in the business center that provides convenient access to our clients.

ANT Lawyers works with corporate and individual clients from across the sectors and offers a true spectrum of legal expertise, both contentious and non-contentious. The range of our experience enables us to advise on various matters from the precedent-setting to the purely procedural.

The common thread in everything we do is our ability to combine both commercial and legal perspectives. This means our clients can rest assured that, whatever the case or transaction, our lawyers have the experience to deliver legal advice and service that works in a commercial context.

Please contact us to book your time in advanced to let us provide our best service.

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