Set up company in Vietnam (Step by step guide) in 2023
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 majority of industries. However, there are some sectors with restrictions on foreign ownership. These include advertising, logistics, and tourism. In such situations, foreign investors must seek the assistance of a Vietnamese joint venture partner.
International businesses must adhere to World Trade Organization (WTO) agreements, which govern foreign ownership in most industries. Nevertheless, there are certain areas that do not fall under WTO regulations or local legislation--in these cases, approval from the corresponding ministry is essential for business operations and growth.
The minimum capital requirement for registering a company in Vietnam depends on the type of business entity you are setting up.
For instance, the minimum capital requirement for registering a limited liability company (LLC) is VND 10 million (~USD 440). However, if you are looking to register a joint-stock company or foreign-owned enterprise (FOE), the minimum capital requirement increases to VND 30 million (~USD 1,320).
Real estate companies
Finance and Fin-tech
Before registering a company, you must have a physical office space in Vietnam. This can be either in the form of virtual offices or residential buildings. Any building used for business purposes must be registered with the local authorities and recorded in the company registration documents.
During the incorporation process, The Department of Planning and Investment may require verification of your address. You can submit documents to confirm that you are going to use this specific location for your business after incorporating it. This proof must explicitly state such intentions in order to be accepted as valid evidence.
To register a company in Vietnam, a foreigner must obtain a valid visa. Depending on the type of business entity you are planning to form, the process for obtaining a visa may vary.
For instance, if you are looking to register a foreign-owned enterprise (FOE) in Vietnam, you must obtain a work permit (and visa) before the incorporation process begins. For setting up a joint-stock company, you must apply for an investor visa. And finally, if you are registering a limited liability company (LLC), you must obtain an ordinary visa.
Once the visa is secured, you must obtain a temporary residence card which will be used to register your business.
Every company registered in Vietnam must have at least one resident director. This director must be a Vietnamese national and hold a valid ID card. A resident director is also responsible for managing the company’s daily operations as well as fulfilling the requirements set by the local authorities.
How much does it cost to start a business in Vietnam? The cost of forming a company in Vietnam depends on the type of business entity that you choose. The most popular business entity is a limited liability company (LLC). The standard cost of LLC formation in Vietnam is around $2,700. How does this fee break down? It covers the costs of legal and accounting services, the registration fee for establishing a business in Vietnam's national business registry portal, as well as the cost of obtaining a Vietnam business registration certificate.
The next step to setting up a business in Vietnam is selecting the correct legal structure. The most popular option is an LLC, as it is the easiest to register and offers entrepreneurs a simpler reporting system. It is important to note that there are other legal structures available, such as branch offices and representative offices.
Once you have selected the appropriate legal structure for your business, you can proceed to the next step: registering with Vietnam’s national business registration portal. This process involves submitting an application and receiving your company registration number. How long this process takes depends on the type of business entity that you’re registering, but it usually takes up to 10 days.
Before you can register your business, you need to decide on a company name and register it with the national business registry. To register a company name, you must submit an application to the registry and pay a fee of around $50. How long it takes to register a company name in Vietnam can vary depending on the complexity of your chosen name, but it typically takes around three days.
Once a company name has been registered and approved, the next step is to obtain a business registration certificate. This is a document that confirms the legitimacy of your business. How much does it cost to obtain this certificate? The fee can range anywhere from $100-$300 depending on the type of business entity and the complexity of your business.
If you're considering starting a business in Vietnam, it's important to understand the company setup process and legal requirements. Here is some legal advice to help you navigate the process:
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
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
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.
After your company is registered, you'll need to apply for a business license. The type of license you need depends on the nature of your business. The process for obtaining a business license may take some time, so it is recommended to work with a local lawyer or consultant to ensure a smooth and timely process.
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.
Finally, you'll need to open a bank account for your business. You'll need to deposit the minimum required amount and provide your business license and other necessary documents. It is important to choose a reputable bank to ensure the safety and security of your funds.
In conclusion, setting up a business in Vietnam can be a complex process. It is recommended to work with a local lawyer or consultant 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.
There are several good reasons why foreign entrepreneurs should consider setting up a company in Ho Chi Minh City. Here are a couple of reasons:
In recent years, Ho Chi Minh City has experienced strong economic growth, making it an ideal location for foreign businesses. With a population of almost 9 million people, the city offers a large consumer base and a skilled workforce. The city's strategic location also provides access to other Southeast Asian markets.
The Vietnamese government has implemented policies to attract foreign investment, including tax incentives, streamlined registration processes, and relaxed restrictions on foreign ownership. These policies have made it easier and more attractive for foreign entrepreneurs to set up businesses in Ho Chi Minh City.
Vietnam has a relatively low labor cost compared to other countries in the region. This makes Ho Chi Minh City an attractive location for outsourcing applications, software development, and manufacturing.
Ho Chi Minh City has a dynamic and vibrant startup ecosystem, with a wide range of resources available to support entrepreneurs. There are many co-working spaces, accelerators, and incubators that offer entrepreneurs access to mentors, investors, and networking opportunities. In addition, the Vietnamese government has launched initiatives to support startups, including funding programs and tax incentives.
Ho Chi Minh City is a culturally diverse city, with a mix of Vietnamese, Chinese, and Western cultures. This diversity can be a valuable asset for businesses looking to expand into new markets and better understand the needs and preferences of diverse consumer groups.
In conclusion, Ho Chi Minh City offers a favorable business environment for foreign entrepreneurs looking to establish a company in Southeast Asia. The city's booming economy, business-friendly policies, low labor costs, dynamic startup ecosystem, and cultural diversity make it an attractive destination for foreign investment.
According to the rankings of Legal500 and Hg.org, LHD Law Firm is one of the 10 leading legal services in Vietnam for our consultancy of establishing a foreign-owned capital business in our country. With 10-years experience in the field and the office system throughout the country: Ho Chi Minh City, Hanoi, Da Nang, Vung Tau, etc., LHD Law Firm takes pride in our commitment to satisfy our clients as foreign investors in Vietnam.
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