Set up company in Ho Chi Minh City: the Essential Guide

 Vietnam’s financial capital, Ho Chi Minh City, is a vibrant metropolis of over 10 million inhabitants and accounts for one-third of Vietnam’s total GDP. It is widely regarded as one of the fastest expanding marketplaces for technology, manufacturing, and the top developing property market in Asia-Pacific. Hence, the investors that set up company in Ho Chi Minh City could enjoy the opportunities the Vietnamese market has to offer.

Set up company in Ho Chi Minh City can be made easy

Vietnam has offered first mover advantages for foreign investors to tap into HCMC’s market and contribute to the growing economy throughout the years.  There are still huge potentials in this growing market because of abundant labour skilled resources, growing middle income consumers.  Hence, we present all the information that you need to know before investing and setting up your own company in Ho Chi Minh City.

Company Setup Process and Requirements in Ho Chi Minh City

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 most of industries. However, there are some sectors with restrictions on foreign ownership i.e. advertising, tourism, insurance, banking… In such situations, foreign investors must seek the assistance of a Vietnamese joint venture partner.

International businesses practice must be adhered to as World Trade Organization (WTO) agreements. Nevertheless, there are certain areas that approval from the corresponding ministries in Vietnam is essential for business operations i.e. Minimum Capital Requirement,  Legal Structures for Company Registration in Vietnam, Foreign Ownership Ratio…

Step by step guide to set up company in Ho Chi Minh City

Choose the right business structure
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

Compliance with Vietnamese laws and regulations
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

Register your business with the Department of Planning and Investment
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.

Obtain a business license
After your company is registered, you might need to apply for a business license. The type of license you need depends on the nature of your business. For instance, for retail trading, business license is required. The process for obtaining a business license may take some time, so it is recommended to work with a local lawyer in Vietnam to ensure a smooth and timely process.

Register for taxes
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.

Open a bank account
Finally, you’ll need to open a bank account for your business. You’ll need to provide your business license and other necessary documents, and deposit the minimum required amount for covering the fee and expenses of maintaining the account.  The direct capital investment account (DICA) must be opened to receive the investment amount from oversea as committed in your investment proposal.  Vietnam has been depending on Foreign Direct Investment for economic growth hence this investment is very important for the government to track and you would better follow to transfer as committed.  It is also suggested you consider the bank that staff could speak English for better banking experience. 

In conclusion, setting up a business in Vietnam could be a complex process. It is recommended to work with a local lawyer in Vietnam 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.

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Establish Company in Vietnam: What 8 Steps Guide to Follow?

 When foreign investors invest in Vietnam, they could establish company in Vietnam. Foreign investors have the right to choose the appropriate forms of enterprise such as a limited liability company, joint stock company, etc.

Why foreign investors invest and establish a company in Vietnam?

Vietnam offers a compelling environment for foreign investors seeking to establish company in Vietnam. There are several reasons why investors should consider Vietnam as their business destination.

Firstly, Vietnam boasts a rapidly growing economy, characterized by robust GDP growth and a favorable business climate. The country has implemented various market-oriented reforms, attracting foreign investment and fostering a dynamic entrepreneurial ecosystem.

Additionally, Vietnam benefits from a strategic geographical location, serving as a gateway to the vibrant markets of Southeast Asia. Its membership in regional trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the ASEAN Economic Community (AEC), provides investors with access to a vast consumer base and favorable trade conditions.

Furthermore, Vietnam offers a young and skilled workforce, with competitive labor costs, making it an attractive destination for manufacturing and service industries. The government has also taken steps to enhance transparency, streamline administrative procedures, and improve investor protection, demonstrating its commitment to facilitating business operations.

Overall, Vietnam presents a promising investment landscape, offering market potential, strategic advantages, and a supportive business and legal environment for investors seeking to establish a company in Vietnam.

8 Important Steps Guide to Establish Company in Vietnam

Step by step to set up company in Vietnam

Step 1: Register the investment project

Step 2: Apply for Certificate of investment registration

Step 3: Apply for the certificate of business registration

Step 4: Publish the content of the business registration

Step 5: Registered business stamp

Step 6: Notice of use of stamp

Step 7: Open bank account

Step 8: The post licensing procedures

How to Establish Company in Vietnam?

Step 1: Register the investment project to establish company in Vietnam

Investors submit an investment project registration file to the Business Registration office of the province or city or the management board of an industrial zone, an export processing zone or a high-tech zone for the approval of an investment project during the period within 15 days (without time for clarification).

Step 2: Apply for Certificate of investment registration

After approval of the investment project, investors submit a valid record to the Department of Planning and Investment within 10 days to apply for a business registration certificate in Vietnam.

Step 3: Apply for the certificate of business registration

After obtaining the business registration certificate, the investor shall submit the application for enterprise registration certificate to the enterprise registration office within 3 days.

Step 4: Publish the content of the business registration

After being granted the certificate of enterprise registration, the investor shall disclose information about the enterprise on the national enterprise registration portal within 30 days, including the following information:
i, Business lines;
ii, List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Step 5: Registered business stamp

The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:
-Company’s name;
-Business code.

After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.

Step 6: Notice of use of stamp

After having stamp made, investors submit notices on use of stamp forms to the Investment registration agency. After receiving the record, the Investment registration agency issues a receipt for the enterprise, publishes the notice of the enterprise on the National Business Information Portal and issues a notice of the posting, stamp samples of enterprises, branches and representative offices for enterprises.

Step 7: Open bank account

Investors need to open two types of bank accounts, namely the investment capital account to receive the investment amount and the transaction account for conducting daily transaction in Vietnam.

Step 8: The post licensing procedures

For the conditional business lines:
Investors investing in conditional businesses lines as must apply certificate of business qualification, practicing certificates, professional liability insurance, legal capital requirements, etc. before conducting business in Vietnam.

How a law firm in Vietnam could help establish company in Vietnam?

Establishing a company in Vietnam requires careful adherence to these steps and compliance with relevant regulations, particularly for businesses with conditional requirements.

The above outlines the process to establish company in Vietnam for foreign investors. By engaging the services of a reliable law firm in Vietnam, investors can navigate through these steps efficiently and ensure compliance with legal requirements, ultimately facilitating a smooth and successful establishment of their business in the country.

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What Are Required Documents to Set up Limited Liability Company in Vietnam?

 When doing business in Vietnam, the business people find benefits to set up company as a separate legal entity for various purposes i.e. to have an entity to sign contract, open bank account, hire personnel and pay them properly, and to deduct expenses for tax optimization. The most popular form is to set up limited liability company in Vietnam (LLC).

Dossiers to Set up Limited Liability Company in Vietnam

-Application for business registration according to a uniform form prescribed by the competent business registration agency.

-Draft of Company’s charter

-List of members and accompanying documents below:

+For individual members: copy of ID card, passport or other legal personal identification

+For members that are organizations: copy of the Establishment Decision, Business Registration Certificate or other equivalent documents of the organization; Authorization document, ID card, passport or other legal personal identification of the authorized representative.

+For members that are foreign organizations, a copy of the Business Registration Certificate must be authenticated by the agency where the organization was registered no more than three months before the date of submitting the business registration application.

-Document certifying legal capital from a competent agency or organization for companies conducting business in industries and professions that according to the law must have legal capital.

-Practicing certificate of the Director or General Director and other individuals for companies conducting business in lines and professions that, according to the law, must have a practicing certificate.

Procedures to Set up Limited Liability Company in Vietnam

1. The business founders submit a complete business registration application according to the provisions of law at the competent business registration agency and must be responsible for the truthfulness and accuracy of the content of the business registration application.

2. The business registration agency is responsible for reviewing business registration documents.

3. If the application is complete, a business registration certificate will be issued within 10 working days from the date of receipt. If the authority refuses to issue a Business Registration Certificate, it must notify the applicants in writing. The refusal notice must clearly state the reason for refusal and points that need to be amended and supplemented.

The business registration agency reviews and is responsible for the validity of the documents when issuing the Business Registration Certificate; The founder may not be required to submit additional documents not prescribed by this law.

The deadline for granting a Business Registration Certificate associated with a specific investment project shall comply with the provisions of law.

How Lawyers in Vietnam Could Help Business People to Set up Limited Liability Company in Vietnam? In the company’s internal regulations.

Setting up a limited liability company (LLC) in Vietnam is a pivotal step for entrepreneurs seeking to establish a robust legal presence in the country’s dynamic business landscape. While the process might seem straightforward, engaging experienced lawyers in Vietnam brings significant value, ensuring a seamless and legally compliant establishment. Here’s a detailed exploration of the value-added services that lawyers provide in assisting business people to set up limited liability company in Vietnam.

1. Expertise in Vietnamese Legal Landscape

Vietnam lawyers possess in-depth knowledge of Vietnam’s legal framework, ensuring that the establishment process adheres to the latest laws and regulations. Navigating the intricacies of Vietnamese corporate law can be challenging for those unfamiliar with the local legal landscape. Lawyers provide clarity and guide entrepreneurs through the legal requirements, minimizing risks associated with regulatory non-compliance.

2. Tailored Legal Advice

Every business is unique, and Vietnam lawyers understand the importance of providing tailored legal advice. They assess the specific needs and objectives of the business, offering guidance on the most suitable corporate structure, drafting the company’s charter, and ensuring that the legal framework aligns with the business’s long-term goals.

3. Document Drafting and Review

The process set up limited liability company in Vietnam involves drafting essential documents such as the company’s charter. Vietnam lawyers play a crucial role in meticulously drafting and reviewing these documents to ensure they are legally sound and align with the client’s intentions. Thorough document preparation contributes to the smooth registration process and establishes a solid legal foundation for the company.

4. Compliance Assurance

Compliance with local regulations is paramount to the success of any business. Vietnam lawyers actively engage in ensuring that all legal requirements for business registration are met, from submitting the correct application forms to validating the legal capital requirement. Their expertise in compliance matters safeguards the business from potential legal issues and penalties.

5. Handling Business Registration Application

Vietnam lawyers take charge of preparing and submitting the business registration application, a critical step in the process to set up limited liability company in Vietnam. They navigate the bureaucracy efficiently, ensuring that the application is complete and accurate. This proactive approach accelerates the registration process and minimizes delays.

6. Resolving Legal Hurdles

Unexpected legal challenges can arise during the registration process to set up limited liability company in Vietnam. Vietnam lawyers are equipped to address and resolve these hurdles, be it discrepancies in documentation or unforeseen legal requirements. Their ability to navigate legal obstacles contributes to a more efficient and stress-free registration experience for the business owner.

7. Risk Mitigation

Vietnam lawyers are adept at identifying potential risks associated with the process set up limited liability company in Vietnam. Through thorough legal analysis, they assess and mitigate risks, providing proactive solutions to potential legal challenges that may arise during or after the registration process. This risk management approach protects the business’s interests and enhances its resilience in the market.

8. Continuous Legal Support

Beyond the initial registration, Vietnam lawyers provide ongoing legal support after the process to set up limited liability company in Vietnam. This includes addressing any legal queries, assisting with compliance matters, and advising on legal aspects of business operations. Continuous legal support ensures that the company remains in compliance with evolving legal requirements.

In conclusion, the value that Vietnam lawyers bring to the table when helping business people set up limited liability company in Vietnam extends far beyond the basic legal requirements. Their expertise, tailored advice, meticulous document handling, and commitment to compliance and risk mitigation collectively contribute to a seamless and legally sound establishment process. Engaging legal professionals ensures that entrepreneurs can focus on growing their business while having confidence in the legal foundation supporting their endeavors in the Vietnamese market starting with the process to set up limited liability company in Vietnam.

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Company Formation in Vietnam: A Comprehensive Guide

 

Overview of Company Formation in Vietnam

Foreign investors looking for opportunities in the Vietnam market are presented with several options for company formation in Vietnam. It’s crucial to conduct thorough research and seek professional guidance to ensure a smooth and compliant company formation process.

Forms of Investment: Company Formation in Vietnam is Most Popular

Vietnam’s economic landscape offers a variety of investment opportunities, with company formation being a primary avenue for foreign direct investment.

The process of company formation in Vietnam is governed by the Investment Law.

Firstly, investors can establish economic organizations, which is the most straightforward method of setting up a business presence in the country, besides other forms of investment, being capital contribution to existing entities, purchase shares, implement investment projects, Business Cooperation Contract, or other new forms introduced and regulated by the government. 

To ensure a fair and orderly business environment, all investment activities within Vietnam must comply with the Investment Law and other relevant legislation.

These laws dictate a framework within which investors operate, providing rights and responsibilities that ensure both investor security and national interests are safeguarded.

5 Steps Guide to Register Company in Vietna

Investment Policies in Vietnam

Vietnam’s investment policies are designed to foster a conducive business climate while safeguarding national interests.

Investors are granted the liberty to undertake business activities in any sector that is not explicitly prohibited. However, for those sectors deemed conditional, investors must satisfy specific business investment conditions as outlined by law.

Investors are bestowed with the autonomy to make informed decisions concerning their investments, provided they align with Vietnamese law.

This autonomy extends to the utilization of financial resources, including credit and land. However, the law stipulates that any investment activities detrimental to national defense or security will be subject to suspension or termination.

The state plays a pivotal role in safeguarding the interests of investors by recognizing and protecting ownership rights over assets and income.

Moreover, the state strives to ensure equitable treatment of all investors, advocating policies that bolster favorable investment conditions and promote sustainable economic development.

Vietnam also respects its international commitments by adhering to investment treaties it is a party to, ensuring that foreign investors can rely on Vietnam’s compliance with global investment standards.

Prohibited and Conditional Investments in Vietnam

The Investment Law also outlines specific industries and trades where business investment is prohibited.

These include the trading of narcotics, certain chemicals and minerals, wildlife specimens, as well as involvement in the prostitution business, human trafficking, and related illegal trades. Additionally, activities concerning human cloning and trading in firecrackers are banned, along with the provision of debt collection services.

For certain sectors, referred to as conditional business investment lines, investors must meet predetermined conditions. These conditions are set to protect national defense, public order, social morality, and community health. The Investment Law provides a comprehensive list of these conditional sectors in its appendices.

The conditions for engaging in these conditional investments are subject to strict regulation to ensure transparency, objectivity, and cost-effectiveness for investors.

The law details the application process, the form of conditions, and the administrative procedures required to comply with these conditions. Furthermore, the effective duration of any licenses or approvals is clearly defined to avoid any ambiguity.

Implementation of Investment Conditions in Vietnam

The investment conditions are enforced through various forms such as licenses, certificates, and written approvals. Importantly, these conditions and the list of conditional business investment lines are made publicly available on the National Enterprise Registration Portal, ensuring that investors have easy access to the information they need.

The government retains the authority to detail the announcement and control of these business investment conditions, thereby maintaining a well-regulated and transparent investment environment.

In conclusion, forming a company in Vietnam involves navigating a comprehensive legal framework that balances the interests of investors with national priorities.

By adhering to the Investment Law and its associated regulations, investors can capitalize on the numerous opportunities available within Vietnam’s dynamic market while contributing to its economic development.

Procedures in Company Formation in Vietnam

Foreign investors aiming to establish or expand their businesses must navigate through the process of obtaining crucial certifications: the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC) for company formation in Vietnam.

These certificates are foundational for legally conducting business in Vietnam, each serving distinct purposes. The IRC is required for foreign investors to commence business operations, while the ERC is necessary for both foreign and domestic businesses to be recognized as legal entities.

This outlines the procedures to apply for these essential documents, ensuring a smoother entry into Vietnam’s dynamic market.

Investment Registration Certificate (IRC)

The IRC is a prerequisite for foreign investors intending to invest in Vietnam. It outlines the scope, scale, and nature of the investment, providing legal grounding for the investment project. 

Here’s how to apply Investment Registration Certificate (IRC) in Vietnam

1.Preparation of Application Dossier:

Investors need to compile a dossier including a written request for project execution, copies of the investor’s legal documents, investment project proposals, and other documents depending on the specific requirements of the investment sector.

2. Submission to the Department of Planning and Investment (DPI):

The complete dossier must be submitted to the DPI where the project will be located. The DPI acts as the primary body reviewing and approving investment projects.

3. Evaluation Process:

The DPI evaluates the dossier based on legal compliance, the feasibility of the investment project, and its alignment with Vietnam’s development plans. This process typically takes about 15 working days.

4. Issuance of the IRC:

Upon approval, the DPI issues the IRC to the investor. This certificate specifies the investor’s rights, obligations, and conditions pertaining to the investment project.

Enterprise Registration Certificate (ERC)

The ERC is essential for establishing a legal business entity in Vietnam or in other words company formation in Vietnam. It is applicable to both domestic and foreign-owned businesses. 

The application Enterprise Registration Certificate (ERC) process involves:

1. Preparation of Required Documents:

The application for the ERC includes a request for business registration, company charter, list of shareholders (for joint-stock companies), and legal documents of the founders.

2. Submission to the Business Registration Office (BRO):

The completed application dossier must be submitted to the BRO under the DPI where the business will be headquartered.

3. Review and Approval:

The BRO reviews the application for compliance with Vietnamese business law. This process is relatively quick, with the ERC often issued within three working days from the submission of a complete and compliant dossier.

4. Issuance of the ERC:

Once approved, the BRO issues the ERC, officially recognizing the company formation in Vietnam as a legal entity authorized to conduct business activities in Vietnam.

Obtaining the Investment Registration Certificate and Enterprise Registration Certificate is a critical step for company formation in Vietnam.

While the process of company formation in Vietnam requires meticulous preparation and understanding of Vietnamese legal requirements, it paves the way for investors to access and thrive in one of Southeast Asia’s most dynamic economies.

By following the outlined procedures, businesses can ensure compliance and set the foundation for successful operations in Vietnam.

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