Limited-liability company is a legal entity established by its members through capital contributions to the company. Liability of members is restricted to the extent of their capital contributions.
Investment Capital Requirements
There is no minimum capital requirements for foreign investors intending to establish a LLC in Vietnam. Investors can be corporations or individuals. LLCs may be established by a single investor (single-member LLCs) or multiple investors (multiple member LLCs). Multiple member LLCs consist of at least two (2) stockholders, up to a maximum of 50 members. The regulations for single-member and multiple-member LLCs are mostly similar.
Depending on the ownership structure, LLCs established by foreign investors may take the form of either:
A 100% foreign-owned enterprise (where all members are foreign investors); or
A foreign-invested joint-venture enterprise between foreign investors and at least one domestic investor.
All charter capital has to be fully paid up within 90 days of establishing the LLC.
The management structure of a LLC comprises of the members’ council, the chairman of the members’ council, the director or general director and a controller. A board of supervisors is also required where the LLC has more than 11 members. The Members’ Council is the highest decision- making body of the LLC and comprises of all capital contributing members.
Accounting/ Auditing requirements
Preparation of financial statements is mandatory for each company, and the balance sheet and profit and loss account of the company have to be filed with the Ministry of Finance, the local tax authorities, Department of Statistics and other local authorities subject to requirements by the law within ninety days from the end of the financial year.
All foreign-invested business entities must have their annual financial statements audited by an independent auditor operating in Vietnam. Banks, non-banking credit institutions and foreign banks’ branches are required to rotate audit firms after five consecutive years.
In addition, foreign invested enterprises and organisations incorporated and operating in Vietnam reporting in a foreign currency are also required to prepare an additional set of financial statements translated into VND to be submitted to the authorities. These translated financial statements must also be audited.