Register company in Vietnam is fundamental and the first step for Vinasc’s One-Stop-Services, which aims to serve Foreign Direct Investment Enterprises (FDI), from smooth market entry to growing business in Vietnam.
Establishing a company in Vietnam involves several steps and requirements. It’s important to note that the registration process can vary depending on the type of company you want to establish and any recent changes in Vietnamese laws and regulations.
Overview of legal of register company in Vietnam
Determine the Business Structure
Decide on the type of company you want to establish. The common options for foreign investors in Vietnam are a Limited Liability Company (LLC) or a Joint-Stock Company (JSC). The structure you choose will depend on factors such as the nature of your business, investment capital, and ownership requirements.
A CO., LTD can have 1 to 50 members, also known as founders or owners. Note that CO., LTD in Vietnam does not have shareholders. On the other hand, a JSC must have a minimum of 3 shareholders. There is no limit to the number of shareholders a JSC can have.
Choose a Business Name
Select a unique business name that complies with Vietnamese naming regulations. The name should not be misleading, offensive, or already registered by another company.
Below, you will find steps detailing the process to registering a Limited Liability Company in Vietnam. You can also get in touch with Vinasc’s consultants by filling out the form below.
Requirements for register company in Vietnam
Foreign ownership regulations in Vietnam
Vietnam allows 100% foreign ownership of a business in most industries. These include manufacturing, processing, trading, retailing, IT, servicing, and education…. However, some industries restrict foreign ownership. Examples of these include advertising, logistics, medical, tourism…. In some cases, foreign investors will need a Vietnamese joint venture partner.
World Trade Organization (WTO) agreements regulate foreign ownership for most business lines. However, there are some business lines not regulated by WTO agreements or local laws. In such cases, you will need approval from the ministry involved in that industry.
Minimum capital requirement
There are no minimum capital requirements when register company in Vietnam for most business lines. The Department of Planning and Investment will assess if your capital contribution is in line with your business. With a simple business line, you can invest capital of USD 10,000. This amount is assumed to cover some initial expenses in the first year including: office or virtual office rental fee, administration fee, accounting and tax services fee, auditing service fee, and salary for staff.
Note that there are some business lines with minimum capital requirements. These include: employment services, language centers, vocational schools, banking, insurance, finance …
The capital chartered should exceed setup and equipment expenses. Note that your Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) will state the amount of your capital. Changing this will require amending IRC and ERC.
The address for register company in Vietnam
You must have a business address to incorporate a company in Vietnam. Service-based businesses, and companies without staff, can use a virtual office address. However, some business lines must have a physical location or office. These include manufacturing, restaurants, and retail trading, among others. The Department of Planning and Investment may check the address during the incorporation process.
Resident director
All companies in Vietnam must have at least one resident director. They don’t need to have residency status at the time of incorporation. However, they will need a residential address in Vietnam.
Note that if the director is also an investor, they will not need a work permit. Instead, they will have to apply for a work permit exemption. A director who is a foreign national and not an investor in the company will need a work permit in Vietnam.
The documentation needs to prepare
A company founder who register company in Vietnam can be an individual or a company.
An individual founder must submit:
♦ a passport notarized copy;
◊ documents proving financial capacity: consular legalized, translated, and notarized bank statements;
♦ office renting contract;
◊ notarized copy of the authorized representative’s passport (if any).
A company must submit:
♦ ERC consular legalization, translation, and notarization;
◊ documents proving financial capacity (01 of the following documents): financial statements for the last 02 years; commitment to the financial support of the parent company; commitment to the financial support of the financial company; financial capacity guarantee; or bank statement… consular legalization, translation, and notarization;
♦ office renting contract;
◊ notarized copy of the authorized representative’s passport (if any).
The step-by-step process of register company in Vietnam
The procedure below details the process of registering a foreign CO., LTD (LLC) in Vietnam.
1. Investment Registration Certificate (IRC)
When registering a foreign-owned company in Vietnam, you need an IRC.
The Department of Planning and Investment (DPI) issues this IRC if Investment projects outside IZ, EPZ, EZ, CNC. And Management Authority of IZs, EZ, EPZ, Hi-tech park issue the IRC if Investment projects inside IZ, EPZ, EZ, CNC.
It usually takes about 25 working days to receive the IRC.
However, if no WTO agreements or local laws regulate foreign ownership in that business line, it will take longer to get the IRC. Your business will need Ministry-level approval from one or more ministries.
2. Enterprise Registration Certificate (ERC)
Companies in Vietnam must also get an ERC after receiving the IRC. The Department of Planning and Investment also issues this certificate. It usually takes about 5 working days to receive the ERC.
3. Sublicenses or written approval, if applicable
Depending on the business line, some companies need to apply for sublicenses. Such examples of business lines that need sublicenses include: manufacturing, logistics, recruitment, lodging, retail, E-commerce, trading of special products or services, …
Market access conditions applied to foreign investors specified in the Negative List for Market Access include:
♦ Holding of charter capital by the foreign investor in a business organization;
◊ Investment method;
♦ Scope of investment;
◊ Capacity of the investor; partners participating in the investment activities;
♦ Other conditions specified
Business investment conditions to be fulfilled are those specified in: Licenses; Certificates; Credentials; Written confirmation or written approval.
Aside from register company in Vietnam, Vinasc will also take care of the sublicenses or permits you need. We will also assist in completing any procedures necessary. It usually takes from 45 to 60 working days to receive the sublicenses or written approval.
4. Stamp of the Company
It usually takes about 2 working days to receive the stamp of the company after receiving the ERC.
5. Tax tokens, E-invoice, Bank account, and Social insurance code
After receiving the Stamp, the company has to buy a tax token. Tax tokens can use for many procedures such as : tax declaration, tax payment, social insurance payment, issuing VAT invoices, signing on PIT documentation, custom import and export declaration, sign on e-contracts.
E–invoice is required to apply for all enterprises in Vietnam from 01 July 2022. You need to register E–invoice and created the form of invoice for your company.
At the same time, the company has to open bank accounts, and register a social insurance code.
6. Tax registration and payment of the business license tax
The ERC number is also the company’s tax code. All companies must pay taxes through an online system. Companies also submit tax declarations and reports through this system.
Vinasc can assist in the process to gain access to this system and maintain compliance with tax regulations.
7. Capital contribution
Capital Contribution Methods: Capital contributions can be made in various forms, including cash, machinery, equipment, intellectual property rights, land use rights, or other tangible and intangible assets. The value of the contributed assets is typically determined based on market prices or appraisals.
Capital Contribution Ratio: The capital contributed by each investor is typically expressed as a percentage or ratio. This ratio determines the ownership structure of the company. The distribution of profits and voting rights is generally proportional to the capital contribution ratio.
After register company in Vietnam and receiving the ERC, you have 90 days to make the capital contribution. Failure to do so will result in fines and require amending IRC and ERC to match with actual capital contributed.
8. Corporate compliance in Vietnam
Corporate compliance in Vietnam involves the following:
Tax reporting and compliance
This includes corporate income tax, value-added tax, personal income tax, and foreign contractor tax according to Vietnamese tax regulations.
Bookkeeping and accounting
Record monthly transactions into the accounting software according to Vietnamese Accounting Standards. This includes preparing the financial statement at the end of the financial year.
Audited Financial Statements
An independent Vietnamese auditing company must review your financial statements at the end of each fiscal year. This report will be submitted to the Tax Authority, Statistical Authority, Department of Planning and Investment, Department of Finance and Industrial Management (in case you register company in the industry zone).
Vinasc provides auditing services in Vietnam, so we will audit the financial statements if you appointed us. The normal audit takes from 15 to 30 working days from receiving all accounting books and documentation. However, according to Vietnam Independence Audit law, the audit service contract must be signed latest 30 days before the day end of the fiscal year.
Foreign investment reports
The report must include profits, losses, and expenses throughout the year.
Regulated entities: FDIs
This report needs to submit to the Provincial Department of Planning and Investment or Management of Economic Zones.
Deadline: the quarterly report is dated the 10th of the first month of the next quarter; the yearly report is dated the 31st of March. Total 5 reports per year.
Supervision report
Regulated entities: FDIs
This report needs to submit to the Provincial Department of Planning and Investment or Management of Economic Zones.
Deadline: the first 6 months of the year report is date 10th July; the last 6 months of the year report is dated 10th February; the yearly report is dated 10th February. Total 3 reports per year.
Loan Registration
For certain types of loans, such as foreign loans provided to Vietnamese enterprises or individuals, registration with the State Bank of Vietnam (SBV) is required. The borrower is typically responsible for the registration process.
Loan report
On a monthly basis, no later than the 5th day of the month immediately after the reporting period, the borrower must prepare an online review report on short-term, mid-term, and long-term loans on websites.
Regulated entities: the company with foreign loans including short-term and long-term.
This report needs to submit to State Bank Branch.
Deadline: monthly report is before the 05th of the month.
Compliance with employment laws
These include registering employees with social insurance. You also need to make sure that all foreign employees have the necessary permits to work in Vietnam.
Register company services of Vinasc will advise and assist in maintaining compliance in Vietnam.
9. Alternatives to register company in Vietnam
In some cases, it is not necessary to set up a company in Vietnam. There are alternative ways to enter the Vietnamese market.
Representative Office in Vietnam
Representative offices in Vietnam can act on behalf of a foreign parent company. A representative office cannot generate income locally, but it can perform tasks in support of the parent company. It’s a way to enter the Vietnamese market without incorporating a company.
Employer of Record in Vietnam
With an employer of record in Vietnam, you can hire employees without establishing a company or representative office. As your employer of record, we will put your employees on our payroll. We will also take care of maintaining compliance with local employment laws. Vinasc can also assist you in sourcing and recruiting candidates in Vietnam.
Contact
It’s worth noting that the registration process can be complex, and certain industries may have additional requirements or restrictions for foreign investors. Our experienced team can register company in Vietnam quickly and reliably. Please send us an email with a summary require information and our consultants will get in touch with you.