vietnam

6 STEP SET-UP COMPANY IN VIETNAM IN 2023

6 STEP SET-UP COMPANY IN VIETNAM IN 2023

☆ Discover 6 Step guide to Setup business in Vietnam 2023 

Content

Set up a foreign company in Vietnam

Are you an investor looking to set up a foreign-invested company in Vietnam? You want to invest in Vietnam but don't know where to start? Are you wondering what the documents and procedures for setting up a foreign-invested company in Vietnam are like? Let's find the answer with LHD Law Firm through the analysis below.

Vietnam 2023 - Step by Step guide set-up business in Vietnam:  Step 1: Register an investment undertaking with the Provincial People's Committee, Step 2: Apply for an Investment Registration Certificate (IRC), Step 3: Apply for an Enterprise Registration Certificate (ERC), Step 4: Engrave the legal seal of the foreign-invested company, Step 5: Open a bank account (payment account) and file a tax return to issue an invoice, Step 6: Open a capital account and transfer money to contribute capital (This step is very important)

Legal basis for setting up a foreign company in Vietnam

  • WTO commitments

  • Investment Law 2020 amending and supplementing 2022 and guiding documents;

  • Enterprise Law 2020 amending and supplementing 2022 and guiding documents;

  • Trade agreement with the nationality of foreign investors.

Benefits of setting up a foreign company in Vietnam

Located in the heart of the Association of Southeast Asian Nations (ASEAN), Vietnam has a favorable position in terms of market access. Moreover, Vietnam has a long coastline and is located near the world's major shipping routes.

Vietnam is opening up to the global economy. It is an active member of ASEAN, the ASEAN Free Trade Area (AFTA), and the World Trade Organization (WTO). Furthermore, it has more than 60 double-taxation treaties.

Vietnam's population is young, skilled and abundant. The literacy rate is over 90%. Vietnam has a stable government and social structure, which makes it a perfect location for capital investment.

Who has the right to set up a foreign company in Vietnam?

  • The company has from 1% to 100% capital contributed by foreign investors right after its establishment;

  • The foreign-invest company (the company has been granted an investment registration certificate in Vietnam) carry on with set up more economic organizations; capital contribution, purchase of shares and capital contributions of economic organizations;

  • In cases foreign investors contribute capital or purchase shares to a Vietnamese company that already has an enterprise registration certificate (even in the case of buying up to 100% of the company's contributed capital), are not required to carry out procedures to apply for an Investment Registration Certificate;

  • For companies working in the field of retailing goods to consumers or setting up retail establishments, it is required to apply for a business license, a license to set up a retail establishment;

Some notes before setting up a foreign company in Vietnam

  • Foreigners are allowed to own 1-100% of the capital in Vietnam.

  • Minimum capital requirement of 50,000 USD or more

  • The company must have a valid lease/borrow contract

  • The director can be a foreigner or a Vietnamese

  • An investment License (IRC) is a must

  • A business Registration Certificate (ERC) is granted to an enterprise with 100 Vietnamese capital

  • Tax registration, tax payment, and tax reporting as Vietnamese enterprises + Annual audit

  • Contribute capital within the specified period after Opening a capital account (important)

Forms of setting up a foreign company in Vietnam

Setting up a foreign-invested company in the form of investors contributing capital from the beginning

Accordingly, foreign investors will contribute capital right from the start of establishing a company in Vietnam. Accordingly, the capital contribution rate of foreign investors, depending on the field of operation, can contribute capital from 1% to 100% of the company's charter capital.

Setting up of a foreign company in the form of capital contribution or share purchase

Through this form, foreign investors will contribute capital to a Vietnamese company that already has a business registration certificate. Foreign investors, depending on the field of operation, can contribute 1%-100% of capital to a Vietnamese company. Foreign investors will implement procedures to purchase contributed capital and shares of Vietnamese companies. Thenceforth, the Vietnamese company became a foreign invested company.

Procedures and documents for setting up a foreign company in Vietnam

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.

Call, iMessage,  SMS, WhatsApp, Viber, Zalo: +84931767568

0 comment at post
Send comment
captcha

+68889+

Happy Client's

+16889+

Projects Done

+39+

Employees

3+

Office Locations