How to set up a foreign company in Vietnam

Foreign investors are permitted to set up company in Vietnam with the following options:

1. Establishment of enterprise with 100% foreign direct investment
2. Establishment of joint ventures with domestic investor

There are two types of popular company that foreign investors can establish in Vietnam:

1. Limited Liability Company (LLC)
2. Joint Stock Company (JSC)

Compared to JSC, the requirements are quite complicated and require more difficult documents and procedures than LLC, so we recommend foreign investors to choose to establish a company in the form of LLC. This is a popular choice made by most of the foreign investors when they want to set up company in Vietnam.

So, in this article we focus on “How to set up an LLC in Vietnam”

What are the advantages of LLC

LLCs are best suited for small and medium-sized enterprises (SMEs) since they are the most common type of business in Vietnam and all investors can profit from a simple business model that can be started with only one founder. Some features include:

• Liability limited to charter capital
• Easy to register
• Easy to transfer
• Normal in Vietnam

What are the requirements from authority

Firstly, your LLC needs to be approved by the Department of Planning and Investment (you will get an IRC - Investment Registration Certificate (IRC)- upon approval).

Secondly, you will also need to obtain the Enterprise Registration Certificate (ERC), also known as the Business Registration Certificate. The entire process often takes from 45 to 60 days.

To get IRC and ERC, some documentation may be required:

• A registered business address: this can be a physical or a virtual address. It also depends on the business license requirements.
• Business Certificate: (Certificate of Establishment) or an equivalent paper that can certify the legal status.
• Charter Capital: the amount must be high enough to cover the company’s expenses, such as office lease, salaries, operational expenses, etc, for at least the next six months. Generally, for a simple FDI LLC, the recommended amount is a minimum of 50,000 USD.
• Financial documents: for example, the bank statement with the same or bigger amount of charter capital intended to invest in Vietnam. The investor(s) must submit any legalized copies of their financial documents.
• Legal Representative: in a management role or higher, living in Vietnam full time, regardless of nationality.
• Official Identity: notarised copies of the Investor and Legal Representative (s)’s official ID (i.e passport).

What are the procedures to set up a company in Vietnam?

• Apply for Investment Registration
• Create a Company Seal
• Open the banking account
• Contribute to charter capital
• Get an e-signature
• Get an e-invoice
• Pay business tax

Finally, it takes around 45 to 60 days to finish all of the work to form a new company in Vietnam.

Start up guides for other regions are also available. Please contact melloney@alliottglobal.com in the first instance.