Complete Guide to Company Registration in Vietnam
Company registration in Vietnam isn’t particularly complicated. However, there are specific guidelines that you, as foreign investors, must know.
Overview of legal entities in Vietnam’s Company Registration
The two commonest sorts of legal entities in Vietnam are:
- Limited liability company (LLC)
- Joint-stock company (JSC).
An LLC can have 1 to 50 members, also referred to as founders or owners. Note that LLCs in Vietnam don’t have shareholders. On the opposite hand, a JSC must have a minimum of three shareholders. there’s no limit to the number of shareholders a JSC can have.
Requirements for fixing a corporation’s Company Registration in Vietnam
#1 Foreign ownership regulations in Vietnam
Vietnam allows 100% foreign’s ownership of a business in most industries. These include trading, IT, manufacturing, and education. However, some industries restrict foreign ownership. samples of these include advertising, logistics, and tourism. In such cases, foreign investors will need a Vietnamese venture partner.
World Trade Organization (WTO) agreements regulate foreign ownership for many business lines. However, there are some that not regulated by WTO agreements nor local laws. In such cases, you’ll need approval from the ministry involved therein industry.
#2 Minimum capital requirement
There are not any minimum capital requirements in Vietnam for many business lines. However, it must be enough to hide expenses until the business becomes self-sustaining.
The Department of Design and Investment will assess if your capital contribution is in line together with your business. tons of companies set capital of USD 10,000. However, from our experience, it’s possible to open a business service company with USD 3,000.
Note that there are some business lines with minimum requirements of capital. These include:
- Language centers
- Vocational schools
- Real estate companies
- Finance and Fin-tech
Note that your capital should exceed setup and equipment costs. Note that your Business Certificate will state the quantity of your capital. Changing this may require amending your company’s documents.
#3 Registered address
You must have an address to include a corporation in Vietnam. Service-based businesses, like advice company, can use a virtual office address. However, some business lines must have a location or office. These include manufacturing, retail trading, among others.
The Department of Design and Investment may check the address during the incorporation process. you’ll submit documents to function proof of your address. It must say that you simply will use the situation for your business after incorporation.
#4 Resident director
All companies in Vietnam must have a minimum of one resident director. He or she doesn’t get to have residency status at the time of incorporation. However, they’re going to need a residential address in Vietnam.
Note that if the director is additionally a founder, he or she is going to not need a piece permit. Instead, he or she is going to need to apply for a piece permit exemption. A director who may be a foreign national and not a founding father of the corporate will need a piece permit in Vietnam.
The step-by-step process of company registration in Vietnam
The procedure below details the method of registering a far off LLC in Vietnam.
#1 Investment registration certificate
When registering a foreign-owned company in Vietnam, you would like an investment registration certificate. The Department of Design and Investment issues this certificate. it always takes a few months to receive the certificate.
However, if no WTO agreements or local laws regulate foreign ownership therein line, it’ll take longer to urge the certificate. Your business will need Ministerial approval from one or more ministries.
#2 Business registration certificate
Companies in Vietnam must also get a business registration certificate (BRC). The Department of Design and Investment also issues this certificate. The BRC is additionally referred to as the Enterprise Registration Certificate (ERC).
#3 Tax registration and payment of the business licensing fee
The business license certificate number is additionally the company’s tax number. All companies must pay taxes through a web system. Companies also submit tax declarations and reports through this technique. to realize access to the present system, businesses must get an electronic signature.
Emerhub can assist within the process to realize access to the present system and maintain compliance with tax regulations.
#4 Capital contribution
After receiving the BRC, you’ve got 90 days to form the capital contribution. Failure to try to so will end in fines.
#5 Apply for sublicenses or permits, if applicable
Company registration in Vietnam usually takes about one month. However, counting on the line, some companies got to apply for sublicenses. In such cases, the registration process is going to be longer.
Such samples of business lines that require sublicenses include:
- Trading of special products or services
Certain businesses got to process additional permits. for instance, companies that will engage in the sale or distribution of cosmetics must register their products. this will take anywhere from a few weeks to many months.
Aside from company registration, Emerhub also will look out for sublicenses or permits you would like. we’ll also assist in completing any procedures necessary.
Corporate compliance in Vietnam’s Company Registration
Company Registration is Corporate compliance in Vietnam involves the following:
- Accounting and tax reporting. This includes corporate tax, VAT, and private tax.
- Payment of the annual business licensing fee. Companies must pay this starting in their second year of business.
- Audited annual report. An independent Vietnamese auditing company must review your financial statements at the top of every financial year.
- Foreign investment reports. The report must include profits, losses, and expenses every year.
- Compliance with employment laws. These include registering employees with social welfare. you furthermore may got to confirm that each one foreign employees have the required permits to figure in Vietnam.
Setting up a special purpose vehicle in Vietnam
In some cases, foreign investors cannot found out a business thanks to foreign ownership restrictions. Some partner up with an area nominee so as to proceed with their intended business plans.
Some foreign investors use nominee companies to dodge restrictions in certain industries. However, the Vietnamese government is cracking down on nominee companies. the govt will impose heavier sanctions on nominee companies with the new Investment Law. it’ll inherit effect in January 2021.
A safer alternative is to conduct business through a special purpose vehicle. it’ll allow you to guard and maintain control over your investment without fixing a corporation in Vietnam. Get in-tuned with us by filling out the shape below. Our consultants will tell you more about this structure.
Alternatives to Company Registration in Vietnam
In some cases, Company Registration is not necessary to line up a corporation in Vietnam. There are other ways to enter the Vietnamese market.
Representative Office in Vietnam
Representative offices in Vietnam can act on behalf of a far off parent company. A representative office cannot generate income locally, but it can perform tasks in support of the parent company. It’s how to enter the Vietnamese market without incorporating a corporation.
Read Opening a Representative Office in Vietnam to find out more about this business structure.
Employer of Record in Vietnam
With an employer of record in Vietnam, you’ll hire employees without establishing a corporation or representative office. As your employer of record, we’ll put your employees on our payroll. we’ll also look out for maintaining compliance with local employment laws. Emerhub also can assist you in sourcing and recruiting candidates in Vietnam.
Importer of Record in Vietnam
Before you’ll import goods into Vietnam, you’ll need certain certificates and licenses. Waiting to urge these documents before importing your goods will delay business operations. you’ll start importing goods into Vietnam immediately through an importer of record.
To find more about guide for business and investment in Vietnam, you can click here: https://lookoffice.vn/economy-business-investment/guide/
Foreign companies want to start or expand businesses and look for an office in Vietnam:
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