Setting Up Foreign Company In Vietnam

22/11/2023

☑ Discover the service of set-up a 100-foreign-owned company in Vietnam from Experts at Vietnam LLC setup ► Set up a wholly foreign-owned entity, joint venture, public limited company, branch or representative office ☏ +840907996249 or email: all@lhdfirm.com.

CONTENT

SETTING UP FOREIGN COMPANY IN VIETNAM

Setting up a foreign company in Vietnam, they have a choice of locations in Hanoi, Ho Chi Minh City or Da Nang (for trading) and Dong Nai, Binh Duong, Vinh Phuc (for manufactory), and the type of Company Ltd. or JSC company, same investors as a Vietnam.

→ Our foreign investment practice at LHD Lawyers help client's with the following

Transactional structuring: advising on the possibility for foreign investors to obtain an investment license in Vietnam and the selection of an appropriate investment vehicle in Vietnam such as a business co-operation contract, a joint venture company or to set up a company in Vietnam as a wholly foreign-owned company.

Licensing requirements: drafting and negotiating all documents required for obtaining an investment license for a foreign-invested project, following up Vietnamese authorities for obtaining the investment license and assisting to complete all post-licensing procedures.

Regulatory issues: advising on regulatory issues in relation to the operation of foreign-invested projects in Vietnam including advertising and promotion of their products. Please contact us for inquiries through email all@lhdfirm.com or call our partner directly at +84907996249.

☑ Let LHD Lawyers help your business in Vietnam

# Step by step guide to start a business in Vietnam (read more...)

# Chose Types of Enterprises or Economic Organisations in Vietnam

(Our company formation specialists in Vietnam can offer more information on the types of companies available for registration in this country)

The limited liability company in Vietnam (LLC company)

The limited liability company is the most common structure employed by entrepreneurs opening companies in Vietnam. This business form can be:

☑ a single-member limited liability company;

☑ the multiple-member limited liability company (2-50 members).

The main advantage of the limited liability company is that it does not impose a minimum share capital upon incorporation.

The Vietnamese joint stock company (JSC Company)

The joint stock company is the correspondent of the public companies in European countries, however, it does not imply a minimum share capital, just like in the case of the limited liability company. The Vietnamese joint stock company must have its capital divided into shares and at least 3 shareholders.

The partnership and the private enterprise in Vietnam

These are the last two types of companies which can be established in Vietnam. While the partnership must have at least two members who will act as partners in the company, the private enterprise is similar to the sole trader in other states.
Our Vietnam company registration agents can assist investors who want to set up any of the types of structures above.

Set-up a company in vietnam - luathongduc.com

Forms of direct investments in Vietnam

The new Enterprise Law which came into effect in 2015 and it provides for the following types of structures which can be set up by foreign investors in Vietnam

# The joint venture

# The wholly foreign-owned enterprise

# The business cooperation contract

# The public-private partnership;

# the Build-Operate-Transfer (BOT), the Build-Transfer (BT), the Build-Transfer-Operate (BTO), the Build-Operate (BO) agreements.

(Foreign companies can also create a branch and representative offices in Vietnam)

# Documents related to Setting up a company in Vietnam

Foreign investors who want to establish companies in Vietnam are required to prepare a set of documents and file them with the Business Registration Office. The most important ones are the Memorandum and Articles of Association which must be drafted before a public notary. Following that, the business owner must have a company seal made.

The other documents to be prepared when starting a company in Vietnam are

a list with the name of the shareholders;
a document which states the financial assets brought by each shareholder;
a feasibility study;
a document which explains how the project of the company will comply with the legislation;
an announcement about the registration of the company which must be published three times in the row in a local newspaper.

These documents must be filed with the Business Registration Office, following which the company must open the bank account, register with the tax authorities and apply for the licenses which will allow the business to carry out its activities.

Email us LHD Law Firm get free Quotation send LHD Law Firm; all@lhdfirm.com

Notes

When Expat → Starting a business in Vietnam (step by step)

Vietnam became the 150th member of the World Trade Organisation (WHO) in 2007. This opened the door for foreigners to invest and operate businesses in Vietnam. Individuals and organizations are allowed to choose their area of investment, the structure of their business and the method by which capital is raised, as long as their choices are in compliance with Vietnamese law, international treaties, and commitments.

Opening a foreign-owned business in Vietnam is possible and even encouraged by the Vietnamese government, although the laws are complex and the process can be complicated. A modern business law is in its infancy in Vietnam. Laws and regulations may be incomplete, ambiguous and subject to conflicting interpretations by different government agencies. Having the help of an experienced and well-connected Vietnamese law firm is highly recommended.

Foreigners are permitted to own and operate their own businesses in Vietnam, either through indirect or direct foreign investment. Indirect investment can be made by individuals or organizations that can buy shares in Vietnamese firms or invest in stocks, investment funds or use other intermediate financial instruments. Businesses that are wholly foreign-owned or are participating in joint ventures with a Vietnamese business are considered to be direct foreign investments.

☉ Exercising rights of importation and distribution

As per regulated at Provision 1, Article 4, Decree 23/2007/ND-CP dated February 12, 2007, of the Government providing detailed guidance of Law of Commerce’s regulations on goods trading and directly related activities of FIEs in Vietnam (So-called referred to as “Decree 23/2007/ND-CP”), an FIE is eligible to exercise its rights to import and distribute goods in Vietnam if it meets the following requirements:

- The Investor is a country or territory which is a member of international treaties to which Vietnam is engaged and committed to open markets for goods trading activities and related;

- Form of investment must be consistent with the roadmap of commitments under international treaties to which Vietnam is a member and in accordance with the law of Vietnam;

- Goods and services must be in accordance with market opening commitments of Vietnam and with of the law of Vietnam;

- Scope of operation must be in accordance with the market access commitments of Vietnam and with the law of Vietnam;

- The business has the approval of the competent authorities in Vietnam.

According to Vietnam's commitments to the WTO, since 2009, foreign investors are entitled to import and distribute goods in the form of a company with 100% foreign capital.

To ensure the eligibility for licensing, in addition to the above conditions, you also have to ensure the following requirements:

- You must be a manufacturer of electric and electronic products expected to be distributed in Vietnam or be a trusted trader of electric and electronic products in your country;

- The results of business operation in your country must be positive, shown in the audited financial statements of the last two years;

- The Registered office of the Company or wholesale, retail stores must be consistent with the planning of Vietnam. Normally, investors must have a rental office in an office building for the Company’s head office and/ or a place for wholesale and retail at a planned-in-advance trade center;

- Investment capital must be sufficient to ensure the feasibility to implement business projects in Vietnam.

VIETNAM WILL BECOME TIGER IN THE FUTURE

☉ Provide maintenance services

At the moment, Vietnam has no commitment to market access for appliance maintenance services. This means the competent authorities of Vietnam has no obligation to open the door for foreign investors to participate in providing this kind of service in Vietnam.

However, according to our experience in previous similar cases, the competent authorities of Vietnam may consider allowing you to provide maintenance services for the electric and electronic products distributed by your company.

EXPAT LIVING IN THAO DIEN VIETNAM

☉ Types of Business in Viet Nam

There are many foreign-owned small businesses in Vietnam, as well as a growing presence of international firms and franchises.

There are three business structures available for those who want to open a business in Vietnam. The business may be:

- A 100 percent foreign-owned sole proprietorship or partnership

- A joint venture enterprise

- A business cooperative that is owned and controlled by the people who use its services

- LLC 100 percent foreign-owned sole proprietorship or partnership

☪ Vietnam encourages foreign investment in certain sectors, including

The production of items for export
Animal husbandry, farming and the processing of agricultural, forest and aquaculture products
The utilization of high technology and modern manufacturing techniques
The protection of ecological environments
Research and development
Labour intensive activities
The processing of raw materials
The efficient utilization of natural resources
Construction of infrastructure facilities and important industrial production establishments
Investment in mountainous and remote regions
Investment in regions with difficult economic and social conditions

☪ Not all businesses are open to foreign participation, including those in any sector that may have an adverse effect on

National defence
National security
Cultural and historical preservation
Vietnamese customs and traditions
The natural environment of Vietnam

Documents Required

People wanting to establish a new business in Vietnam are required to produce several specific legal documents. These include a valid personal identity card or passport, as well as papers proving financial solvency.

A foreign enterprise wanting to set up an office or factory in Vietnam must provide the following documents:

A certificate of incorporation
A company charter or articles of association
Audited financial statements for the past 12 months
Valid personal identity cards or passports of any of the business’ authorized representatives

Currency Restrictions

Although money can be moved into Vietnam, it must be deposited into either a Vietnamese-based foreign currency bank account or be converted into Vietnamese dong. There are significant restrictions governing the movement of money out of the country. Money may only be transferred out of Vietnam if it falls into one of these categories:

Payment for imported goods and services
Payment by foreign investors of:
- Invested and reinvested capital earnings and profits from undertakings in Vietnam
- The principal and interest on off-shore loans and credits
- Other legal benefits
Payment for travel allowances to employees traveling abroad
Payment of salaries to the executives of foreign capital enterprises
Payment of salaries to Vietnamese employees working in a foreign country
Payment of salaries and other legal income to foreign employees