Company Formation in Vietnam

Company Formation in Vietnam

 

Forming a company in Vietnam involves a series of steps, requirements, and legal procedures. Here’s a general outline of the process, but please note that specific requirements may vary depending on the type of business and its location within Vietnam.

1. Choosing a Business Structure

The first step is to choose the appropriate business structure. Common types of business entities in Vietnam include:

  • Limited Liability Company (LLC): Suitable for small to medium-sized enterprises. LLCs can be 100% foreign-owned, joint venture, or domestic.
  • Joint Stock Company (JSC): Appropriate for larger businesses. JSCs can issue shares and are required to have at least three shareholders.
  • Representative Office: For foreign companies looking to have a presence in Vietnam without conducting profit-generating activities.
  • Branch Office: Allows a foreign company to conduct commercial activities in Vietnam.

2. Name Approval

You need to get approval for your business name from the Department of Planning and Investment. The name should be unique and not infringe on existing trademarks.

3. Investment Registration Certificate (IRC)

Foreign investors need to obtain an IRC from the Department of Planning and Investment. This involves submitting a proposal that includes details about the investment project, such as its scope, capital, location, and duration.

4. Business Registration Certificate (BRC)

Also known as the Enterprise Registration Certificate, the BRC is required for all business types. The application includes information about the business, such as its name, business lines, capital, and information about the legal representative.

5. Tax Registration

After obtaining the BRC, the company must register for tax and obtain a tax identification number (TIN) from the local tax department.

6. Seal and Bank Account

Companies in Vietnam are required to have a company seal. Once you have the seal, you can open a corporate bank account.

7. Capital Contribution

Shareholders or members must make their capital contributions within 90 days from the date of company registration.

8. Additional Licenses

Depending on the nature of your business, you may need to obtain additional licenses or permits, such as a food safety certificate for restaurants or an import-export license.

9. Labor Registration

If you plan to hire employees, you must comply with Vietnam’s labor laws, including registering employees with the local labor authorities and contributing to social insurance funds.

10. Annual Compliance

Companies must adhere to annual compliance requirements, such as auditing, tax filings, and maintaining proper accounting records.

Tips for Foreign Investors

  • Local Knowledge: Understanding local laws, customs, and the business environment is crucial for success.
  • Patience and Persistence: Navigating the legal and bureaucratic landscape can be challenging and time-consuming.

This is a broad overview, and the specifics can vary greatly depending on the details of your business.