Building enduring value through bold strategies
Vietnam’s thriving economy, investment-friendly policies, and growing consumer market make it a magnet for foreign investment. Serving as a strategic gateway to Southeast Asia and beyond, Vietnam is ideal for businesses looking to expand in the region.
Successfully setting up a company in Vietnam requires understanding and adhering to specific legal and regulatory requirements. That’s where our expertise shines. We specialize in guiding foreign investors through the complexities of company registration, ensuring a smooth and efficient experience.
Choosing the right foundation: types of companies in Vietnam
Limited Liability Company (LLC)
- Advantages: Limited liability, flexible management, simplified registration process.
- Disadvantages: Capital raising limitations, potential for member conflicts, cannot issue shares.
- Applicable for: All investors.
- Separate legal entity: Yes
- The Entity’s Name: Same as or different from parent company.
- Activity: Same as or different from parent company.
- Shareholder: ≥ 1 (individual or corporate).
- Setup time: 8-16 weeks
- Compliance requirements: Quarterly / annual tax returns.
- Statutory audit: Yes
Joint-Stock Company (JSC)
- Advantages: Limited liability, easier access to capital, professional management structure.
- Disadvantages: More complex registration, stricter reporting.
- Applicable for: All investors.
- Separate legal entity: Yes
- The Entity’s Name: Same as or different from parent company.
- Activity: Can be the same or different from the parent company.
- Shareholders: ≥ 3 (individual or entity)
- Setup time: 8-16 weeks.
- Compliance requirements: Quarterly / annual tax returns.
- Statutory audit: Yes
Representative Office (RO)
- Advantages: flexible management, simplified registration process.
- Disadvantages: Cannot conduct revenue generating activities, Parent company bears liability.
- Applicable for: Parent company.
- Separate legal entity: No
- The Entity’s Name: Must be same as parent company.
- Activity: Parent company-related commercial activities.
- Shareholder: No
- Setup time: 8-12 weeks
- Compliance requirements: Quarterly / annual tax returns.
- Statutory audit: Yes
Branch Office (BO)
- Advantages: flexible management, simplified registration process, can remit profits abroad.
- Disadvantages: Limited to certain industry sectors, parent company bears liability
- Applicable for: Parent company.
- Separate legal entity: No
- The Entity’s Name: Must be same as parent company.
- Activity: Exclusively market research and coordination. There are no profitable commercial operations.
- Shareholder: No
- Setup time: 6-8 weeks
- Compliance requirements: No. Required to declare all employees tax.
- Statutory audit: Yes
Unsure which structure aligns with your vision?
Our experts provide free consultations to help you make informed decisions.
Your Step-by-Step Guide to Company Registration in Vietnam
To establish a business in Vietnam, foreign investors must choose a legal structure (LLC, RO, BO, or JSC), secure a business location, and prepare necessary documents (lease agreement, financial proof, investor documents). They must then obtain the Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC), followed by post-registration tasks like tax registration and opening a bank account.
Step 1: Choose a business option and address
To incorporate in Vietnam, foreign investors have four main legal structures to choose from:
- Limited Liability Company (LLC): A popular choice for its flexibility and limited liability protection.
- Representative Office (RO): Ideal for market research and promoting your parent company, but cannot engage in direct profit-making activities.
- Branch Office (BO): Allows for a wider range of activities than an RO, including direct sales and service provision.
- Joint-stock Company (JSC): Suitable for large-scale projects and offers the option to raise capital through public offerings.
After deciding the legal structure, you need a business location. Besides using your own address or leasing office space (with restrictions), you can also explore:
- Serviced Office & Coworking Space: Quick and easy-to-set-up office locations across Vietnam with minimized costs
- Virtual Office: Start a company without being present in Vietnam through a virtual address
Step 2: Getting your application ready
These include:
- Lease Agreement: To ensure a smooth registration process, each applicant must possess a valid lease agreement or a pre-lease agreement. This document should clearly indicate the designated location for the company’s official registration.
- Proof of Financial Capacity: Investors must demonstrate they have sufficient funds in the bank or the financial capacity to meet their investment commitments in Vietnam.
- Investor Documents: Each investor will need notarized or legalized documents from their home country for the application.
Step 3: Application for an Investment Registration Certificate (IRC)
To launch a business in Vietnam, foreign investors must first secure an Investment Registration Certificate (IRC) by registering their investment project. This crucial document outlines the investor’s business objectives and grants them the green light to establish their company, similar to a “Foreign Investment Approval” in other countries.
Common challenges: Ensuring compliance with investment conditions, addressing any discrepancies in documentation.
Step 4: Application for an Enterprise Registration Certificate (ERC)
After securing the IRC, they can then apply for the Enterprise Registration Certificate (ERC). The ERC is the official certificate of incorporation for all companies operating in Vietnam, regardless of ownership. The ERC signifies the company’s legal existence and allows it to conduct business activities. Upon issuance, the company’s basic information will be publicly available on the National Enterprise Registration Portal.
Common challenges: Meeting minimum capital requirements, ensuring the company name is available and complies with regulations.
Step 5: Post-Registration Procedures
- Obtaining necessary licenses and permits: Depending on your industry, you may need additional licenses (e.g., for manufacturing, trading, or specific services).
- Tax registration and compliance: Registering for tax method, understanding tax obligations, and filing tax returns.
- Opening a bank account: Choosing a suitable bank, preparing required documents, and fulfilling account opening procedures.
7 key considerations: factors to consider before registering your company
Article 13, Clause 3 of the Vietnam Enterprise Law 2014 mandates that all enterprises operating within Vietnam must designate a legal representative (“LR”) who resides within the country. In situations where an enterprise appoints two LRs, one LR must reside in Vietnam. The second representative is permitted to reside abroad.
In addition to the LR, businesses must also appoint a Chief Accountant to oversee financial operations.
With years of experience and in-depth knowledge of the Vietnamese business landscape, we are your trusted partner for company registration. Our comprehensive services extend beyond basic registration, offering:
- Legal Consultation: Expert advice on legal matters related to your business.
- Tax Advisory: Guidance on tax planning and compliance.
- Accounting and Bookkeeping: Accurate and timely financial management.
- Virtual Office Solutions: Cost-effective office solutions for startups and small businesses.
HR and Payroll Services: Streamlining your HR processes and ensuring labor law compliance.
Our satisfied clients are a testament to our commitment to excellence. We offer transparent pricing and a satisfaction guarantee, ensuring your peace of mind throughout the registration process.
Your Step-by-Step Guide to Company Registration in Vietnam
Common questions you should know about incorporation in Vietnam
1. Can foreigners establish a company?
Yes, you can. According to the World Trade Organization (WTO) pledge, many sectors and business lines in Vietnam permit 100% foreign ownership. However, some industries have specific restrictions for foreign investors, such as limited, unspecified, or uncommitted ownership
2. Should we choose a Joint Stock Company or a Limited Liability Company?
If you have three or more members, you can choose between a Joint Stock Company and a Limited Company, depending on your needs.
Taxes: Both types have identical tax obligations. However, when transferring capital, a Joint Stock Company incurs a Capital Gain Tax tax of 0.1% (e.g., transferring 1 billion VND results in a 1 million VND tax), whereas an LLC faces a tax rate of up to 20%.
Legal Rights: Both entities possess similar rights to raise funds, purchase, sell, and transfer assets. The key difference is in the number of shareholders: a Joint Stock Company has no limit on shareholders, while an LLC is capped at 50 shareholders.
3. How much charter capital is needed? Do you need to verify your capital?
You determine the charter capital based on the scale of your business. Currently, foreign enterprises must verify their investment capital and charter capital.
4. Can we register multiple business lines at the same time?
Yes, you can. The Enterprise Law permits any enterprise to operate as long as it is not prohibited and complies with all applicable business conditions. The business name is not restricted to specific business lines.
For example, Indochina Link Vietnam Company can conduct business in education, and other industries if these industries are registered on its business license.
5. Does the tax authority check the business address?
Maybe. Depending on the tax department and address, tax officials may check and verify the address either immediately after it is established or after a few months of operation. Businesses need to post signs at their registered address.
6. What taxes must be paid following incorporation?
Common company taxes that must be paid are:
- Business tax: 2–3 million per year.
- Value-Added Tax (VAT) 8%-10% applies while issuing bills.
- Corporate income tax (CIT) is 20% of total profits at the end of the year.
- Personal income tax (PIT): Businesses pay on behalf of employees, starting at 10% of income exceeding 11 million VND per month.
- Import tax is applicable while importing products.
- Special consumption tax applies to industries including vehicles, wine, and beer.
- Environmental protection tax: applies to industries that use plastic bags, pesticides, fuel, and coal.
7. Can foreign enterprises in Vietnam appoint foreign legal representative and chief accountant?
Legal Presentative: Yes. Article 13, Clause 3 of the Vietnam Enterprise Law 2014 mandates that all enterprises operating within Vietnam must designate a legal representative (“LR”) who resides within the country. In situations where an enterprise appoints two LRs, one LR must reside in Vietnam. The second representative is permitted to reside abroad.
Chief Accountant: Yes. Foreign expats can serve as chief accountants for FDI enterprises in Vietnam if they meet the standards for the Chief Accountant role as outlined in Vietnam Accounting Law. However, rarely expats can meet the requirements.