How To Start A Business In Vietnam: A Step-By-Step Guide | Lhd Law Firm
19/01/2023
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Starting a new business in Vietnam? Find out where to begin and how to achieve success.
You want to ensure you prepare thoroughly before starting a business in Vietnam, but realize that things will almost certainly go awry. To run a successful business, you must adapt to changing situations.
Conducting in-depth market research on your field and the demographics of your potential clientele is an important part of crafting a business plan. This involves running surveys, holding focus groups, and researching SEO and public data.
Before you start selling your product or service, you need to build up your brand and get a following of people who are ready to jump when you open your doors for business.
This article is for entrepreneurs who want to learn the basic steps of starting a new business in Vietnam.
Tasks like naming the business and creating a logo are obvious, but what about the less-heralded, equally important steps? Whether it’s determining your business structure or crafting a detailed marketing strategy, the workload can quickly pile up. Rather than spinning your wheels and guessing at where to start, follow this 10-step checklist to transform your business from a lightbulb above your head to a real entity.
How to Start a Business in Vietnam: A Step-by-Step Guide
Set up company in Viet nam: Setup 100% foreign investment company setup, joint venture company setup, joint stock company setup, partnership, Brand or rep office setup... LHD Law Firm is a professional consultant company. LHD Law Firm professionally provides the professional consultant services in specific areas such as: Intellectual Property Consultant, Investment and Management Consultant....
Main Services | LHD Law Firm
LHD Law Firm offers cost-effective Vietnam Business Services and Vietnam market entry solutions and expertise to companies and entrepreneurs wishing to take advantage of the attractive quality-to-cost ratio of Vietnamese manufacturing operations or seeking to access Vietnam's growing market for imported goods and services.
The transformation of Vietnam's centrally planned economy into a market-oriented economy has created a business and market environment in Vietnam where business regulations are subject to change, business goal posts are constantly being moved and bureaucracy is overbearing. Thus, doing business in Vietnam and Vietnam market entry are often challenging experiences and coming to terms with Vietnamese legislation, regulation, taxation and, most importantly, the Vietnamese way of doing business can be both expensive and time-consuming.
LHD Firm Worldwide's strength lies in its understanding of and ability to deal with these Vietnam business and market entry challenges. Our knowledge of relationships in Vietnam ensures that our clients receive full support in their business activities, be they in corporate support or business development services.
Our international outlook makes us sensitive to cultural and business differences and enable us to bridge the cultural and business gaps that can so easily hinder business success in Vietnam and facilitate our ability to deliver both Vietnam business services and Vietnam market entry solutions.
Vietnam Business Services
We offer a portfolio of Vietnam business services and Vietnam market entry solutions covering every aspect of these processes. Our expertise encompasses a wide-portfolio of services and advice relating to Vietnam market entry, typically leading to the establishment of:
A Representative Office in Vietnam
A Vietnamese investment company with total or part foreign ownership
A Joint Venture in Vietnam
A Special Purchase Vehicle using a Hong Kong or a low or zero tax company (“offshore”)
Setting up a foreign company in Vietnam - Step by step guide
Step 1: Register an investment undertaking with the Provincial People's Committee
Foreign investors who want to invest to implement projects in Vietnam must carry out procedures to apply for an Investment registration certificate. However, before applying for an Investment registration certificate, in some cases, investors must register an investment undertaking with the Provincial People's Committee.
Dossier for registration of setting up a foreign company:
In case the foreign investor is an individual:
Passport
Head office lease contract
Confirmation of the bank with the same amount of capital as the investment charter capital in Vietnam.
In case the foreign investor is an organization:
Business registration certificate
Operational Charter of Foreign Company
Note: The two documents above must be consular legalized when brought to Vietnam for use
Profitable financial statements or Bank confirmation equal to the amount of money intended to be invested in Vietnam.
Head office lease contract in Vietnam
Decision on appointment of legal representative for businesses in Vietnam.
The time to set up a company with foreign capital
For investment projects not subject to the decision on investment policies: 15-20 working days from the date of receipt of complete dossiers.
For investment projects subject to the decision on investment policies: 05 - 10 working days from the date of receipt of the written decision on investment policies.
Step 2: Apply for an Investment Registration Certificate (IRC)
A written request for implementation of an investment project;
A copy of the identity card, identity card, or passport for the investor being an individual; a copy of the Certificate of Establishment or other equivalent document certifying the legal status of the investor being an organization;
The investment project proposal includes the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, and investment schedule, demand for labor, the proposal for investment incentives, assessment of the project's socio-economic impacts and efficiency;
A copy of one of the following papers: financial statements of the last 2 years of the investor; commitment to the financial support of the parent company; financial institution's commitment to financial support; guarantee on the financial capacity of the investor; documents explaining the financial capacity of the investor;
Proposing land use needs; In case the project does not request the State to allot or lease land or permit the change of land use purpose, a copy of the location lease agreement or other document certifying that the investor has the right to use the area for the accomplishment current investment project;
An explanation of the use of technology for projects specified at Point b, Clause 1, Article 32 of this Law includes the following contents: technology name, technology origin, technological process diagram; main technical parameters, use status of main machinery, equipment, and technological lines;
Within 15 days of receiving a complete dossier, the investment registration agency shall issue an investment registration certificate; In case of refusal, the investor must be notified in writing and definitely state the reasons.
Step 3: Apply for an Enterprise Registration Certificate (ERC)
Following the provisions of the Enterprise Law 2020, an enterprise registration certificate is a document in paper or electronic form that notes information on business registration that the business registration authority grants to a business.
The required information for an ERC kit includes:
Company name and company code (tax code);
Head office address;
Full name, address, contact information, nationality, and the number of legal papers of the individual, for the legal representative of limited liability companies and joint stock companies; for general partners of a partnership company; for business owners of private enterprises. Full name, address, contact information, nationality, number of legal papers of the individual, for members being an individual; name, enterprise identification number, and main office address of the member is an organization, for limited liability companies;
Charter capital for companies, investment capital for private enterprises
According to current law, the request for a Certificate of Business Registration can be done directly at the Business Registration Office, via postal service or an electronic communication network (online). The content/element of the ERC registration file depends on the form of the company you want to establish. Generally, for a limited liability company (LLC) and a joint stock company (JSC), the ERC registration documents are as follows:
For multi-member limited liability companies and joint stock companies:
- Application for business registration
- Company rules
- List of members of a multi-member limited liability company; list of founding shareholders and shareholders being foreign investors of joint-stock companies.
- Copies:
Legal papers of the legal representative of the enterprise;
Legal papers of individuals or founding shareholders and foreign shareholders, for members being individuals; legal papers of individuals or founding shareholders and foreign shareholders for members being organizations; legal documents of individuals or founding shareholders and foreign shareholders for members being organizations and documents appointing an authorized representative. For members being foreign organizations, copies of legal papers of the organization must be consular legalized;
Investment registration certificate, for enterprises established or co-founded by foreign investors or foreign-invested business organizations in accordance with the Law on Investment.
For a single-member limited liability company:
Application for business registration
Company rules
Copies:
Legal papers of the legal representative of the enterprise;
Legal papers of the individual for the company owner being an individual; Legal papers of the organization for the company owner being an organization (excluding the case company owner is the State); Legal documents of the individual for the authorized representative and the document appointing the authorized representative. For the company owner to be a foreign organization, the copy of the legal papers of the organization must be consular legalized;
Investment registration certificate in case the enterprise is established by a foreign investor or a foreign-invested economic organization by the provisions of the Law on Investment.
The time to apply for ERC is 07 working days.
Step 4: Engrave the legal seal of the foreign-invested company
After obtaining the Certificate of Business Registration and having posted the business establishment statement. The business performs seal engraving at one of the licensed seal engraving units. Businesses decide by themselves the number and form of seals within the scope permitted by law.
The enterprise seal includes the following contents:
Company's name
Business code
The province/city directly under the Central Government where the enterprise's head office is located
Order of seals (in case a business has many seals)
Step 5: Open a bank account (payment account) and file a tax return to issue an invoice.
Declaration and payment of license fees:
Declare the license fee once when the new fee payer starts business activities, no later than the last day of the month of starting production and business activities.
In case the fee payer has just set up an enterprise establishment but has not yet started production and business, he/she must declare the license fee within 30 days from the date of issuance of the business registration certificate or the date of issuance of the license fee. receive investment registration and tax registration.
The deadline for paying the license fee when starting a business is the last day of the deadline for submitting the fee declaration dossier.
The license tax declaration file is the license fee declaration.
After coming into operation, the enterprise shall pay the license fee annually by January 30 every year.
Notice of application of value-added tax calculation method
There are two methods of calculating value-added tax: the deduction method (using the value-added invoice) and the direct method (using the sales invoice).
To apply the deduction method, the enterprise shall notify the tax authority according to form 06/GTGT; the deadline for submitting form 06/GTGT before the deadline for submitting the first tax return arises.
Notice on the use of tax agency services (if any)
Taxpayers using tax procedures services through tax agents must notify the direct management agency in writing, enclosed with a photocopy of the service contract certified by the taxpayer within 05 working days. before the tax agent performs the tax procedures for the first time mentioned in the contract.
Register for a personal tax code
Enterprises are obliged to withhold personal income tax when paying salary and wages to employees and register for tax identification numbers for employees (if employees do not have a tax code).
Individuals earning incomes from salaries or wages authorize an income-paying unit to carry out procedures for tax registration and registration of dependents with tax authorities.
Register for electronic transactions with tax authorities
Ho Chi Minh City is an area with full conditions for information technology infrastructure, so businesses established in the city must declare taxes online and pay taxes electronically.
When having a public digital signature, the enterprise registers for online tax declaration and electronic tax payment at the address: https://nhantokhai.gdt.gov.vn/
Step 6: Open a capital account and transfer money to contribute capital (This step is very important)
Regulations on capital accounts of foreign investors are prescribed in Circular 05/2014/TT-NHNN dated 12/03/2014 of the State Bank guiding the opening and use of indirect investment capital accounts. to carry out foreign portfolio investment activities in Vietnam and Circular 19/2014/TT-NHNN dated August 11, 2014 of the State Bank guiding foreign exchange management for direct investment activities. foreigners into Vietnam.
Company opens a capital account (Note state the bank about the capital account)
TRANSFER CAPITAL ACCOUNT → MUST TRANSFER WITHIN THE LONG TERM AND TRANSFER FROM A FOREIGN COUNTRY TO VIETNAM
Notify the Department of Planning and Investment that the COMPANY HAS DEPENDED CAPITAL FULL AND ON TIME (AVOID PENALTIES)
☑ Service of setting up a foreign-invested company of LHD Law Firm
Foreign investment consulting is the professional consulting segment of LHD Firm. Over 15 years of work, we have completed legal work for more than 6,800 projects for businesses and individuals from 32 countries around the world.
LHD Law Firm is rated in the top 10 leading law firms in Vietnam in terms of consulting on setting up foreign capital companies in Vietnam, ranked at Legal500 and Hg.org.
Services of LHD Law Firm:
Advising on conditions for establishing foreign-invested companies for investors according to specific business fields or investors' nationality;
Consulting on selecting the correct type of company for investors: Limited liability company or Joint-stock company, head office address, capital, business lines, opening a capital transfer account, capital contribution term, etc
Guide investors to prepare necessary documents to establish a foreign-invested company;
Consulting, and drafting company establishment documents for investors;
Representing investors to work with competent Vietnamese state agencies in the process of establishing businesses for investors
Apply for a foreign loan for a business to borrow from a parent company or foreign organization.
Exhaustive advice on activities arising in the process of doing business in Vietnam for investors.
With experience and a professional service attitude, LHD Law Firm is committed to satisfying foreign investors in Vietnam.
Our clients are diverse. They include major US corporations, international companies and both owner managed business and entrepreneurs.
So, if you are an executive tasked with investigating your company's Vietnam market entry, you should contact us by clicking on the button below:
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