Starting a Vietnam-based business as a foreigner can be a long road, but the country makes it easy to register your company and open your business, such as: up to 100% foreign ownership for some business activities and you can hire unlimited number of foreign nationals to work for your company.
“Learning Vietnamese is not a requirement as you can use English in Vietnam, but other aspects such as choosing which type of company you want to set up, can make matters more confusing” Sophie Dao, Partner of GBS, a market entry services firm in Vietnam.
Choose the right company structure for you.
Most foreign nationals choose to establish Limited Liability Companies (“LLC”) or Joint Stock Companies (“JSC”) which can be expanded by increasing charter capital/offering unlimited stocks. These structures are typically more attractive to foreign investors.
Foreign enterprises may consider other forms of investment, such as: Public Private Partnerships; Business Cooperation Contracts; Registering the capital contribution, purchase of shares, or capital contributions or Establishing Representative Office and Branches office.
Choose a city to register your company
The company’s business should determine where it locates. Hanoi, Ho Chi Minh city or Da Nang will be the ideal markets for you. The highly qualified labor force concentrated in these cities creates a perfect dynamic environment for investors.
The forms and other requirements for forming a business entity is the same in every city. Here’s how incorporation works in general:
- Choosing a unique name for your company
- Filling out the information about your company and shareholders/owner, the total capital/total amount and par value of the shares the corporation is authorized to issue and the personal information of the legal representative(s).
- Submitting the documents for Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC)
- Company Seal & Public Announcement: After establishing the company, a company seal must be engraved at a permitted agency and an announcement on using the seal specimen provided to the licensing authorities before using it. You can start operating from the point of getting the seal, 1 day from ERC. From 01st January 2021, the enterprise’s seals can be physical or digital. Enterprises are not required to announce the use of the seal specimen to authority.
- Bank Account: After establishment, the company may proceed to open bank accounts. If the company is foreign-invested, the company will open a Direct Capital Account, in which the foreign Charter Capital and foreign Loan Capital will be received into. The company will also open operating (current) bank accounts with commercial banks that it chooses to work with.
The Bottom Line
In most cases, foreigners with business or investments in Vietnam should set up a company in Vietnam. You should consult with experts on company formation, tax law in both your home country and Vietnam before taking the plunge, as the rules for foreign nationals can be more complex than if you were a citizen.