If you want to open a company in Vietnam, you need to respect the conditions of the Company Law which is the most extensive legal framework applicable to local and foreign investors. To the last category of businesspeople, other laws on foreign investments also apply. Below, our lawyers in Vietnam explain the procedure of setting up a company in this country. We also provide tailored support to people interested in immigration to Vietnam for business purposes.
Quick Facts | |
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Types of local companies |
– limited liability company with one or more shareholders, – joint stock company, – partnership, – sole trader |
Legal forms available for foreign companies |
– branches, – subsidiaries, – liaison offices |
Minimum number of shareholders |
– 1 for limited liability companies, – 3 for joint stock companies |
Minimum number of directors | 1 |
Resident director required (YES/NO) |
No, there is no need to appoint a resident director. |
Local legal address required (YES/NO) |
Yes, the company must have a local representative. |
Minimum share capital |
None |
Local bank account required (YES/NO) |
Yes, opening a bank account in Vietnam is necessary when setting up a company. |
Business registration steps |
– documents drafting and filing, – tax registration, – obtaining an investment certificate (for foreign-owned companies), – bank account opening, – and employment registration if required |
Registration documents |
– company charter, – a list of the company members, – details of the director, – declarations of the appointed officers accepting their positions |
Visit required for incorporation (YES/NO) |
No, there is no need to visit Vietnam to open a company. |
Taxes to pay |
– corporate tax, – value added tax, – withholding taxes fo foreign companies (foreign contractor tax), – excise taxes, – customs taxes, – land use taxes |
Corporate tax rate |
20% |
Advantages of opening a company in Vietnam |
– access to a large local market, – quick registration procedure, – simple company formation requirements |
Business registration support (YES/NO) | Yes, you can rely on our lawyers in Vietnam for legal advice. |
Entities available for foreign companies | Foreign companies can set up branches, subsidiaries, and liaison offices in Vietnam. |
Support for setting up companies with foreign ownership in Vietnam (YES/NO) |
Yes, we can assist with the creation of any foreign-owned business form. |
Pre-investment approval requirements for foreign companies (if any) |
Yes, for companies operating in certain special sectors, such as telecommunications. |
Full foreign ownership allowed (YES/NO) | Yes, full foreign ownership is available in most sectors. |
Individual shareholders allowed (YES/NO) |
Yes, natural persons can set up companies in Vietnam, including foreign citizens. |
Corporate directors allowed (YES/NO) |
No, no matter the business form. |
Possibility to register a company remotely (YES/NO) |
Yes, with the help of our law firm in Vietnam. |
Possibility to set up free zone companies (YES/NO) |
Yes, free zone companies are available for registration. |
Accounting requirements for companies |
Companies must file audited financial statements annually. The financial year is the same as the calendar year. |
Virtual office address availability (YES/NO) | Yes, virtual office services can be used in Vietnam. |
Licensing requirements (if any) |
Yes, for certain activities. |
Special programs for foreign investors (if any) |
Foreign entrepreneurs can use the investor visa to incorporate companies in Vietnam. |
Access to local workforce (YES/NO) |
Yes |
Possibility to hire foreign staff (YES/NO) |
Yes, however, work visas are required for each employee. |
Business registration timeframe (approx.) | 3 to 4 months |
Table of Contents
Open an LLC in Vietnam
The limited liability company is the most popular business form in countries all over the world and so it is in Vietnam. Foreign enterprisers can benefit from many advantages when creating a limited liability company in Vietnam, especially if considering the legislation in this country provides for two types of forms of this structure. Another advantage of the limited liability company is that it does not require a minimum share capital.
The Vietnam limited liability company can be a one-shareholder or single-member structure or a multi-member structure. Our company formation consultants in Vietnam can offer information on the requirements related to registering a company in this country. We can help foreign investors who want to open limited liability companies in Vietnam in order to operate in the most prolific business sectors here.
Quick Facts | |
---|---|
Applicable legislation |
Law on Enterprises, Law on Investments |
Minimum number of shareholders |
1, full foreign ownership is possible |
Minimum number of directors |
1 |
Resident director required (YES/NO) |
YES |
Local legal address required (YES/NO) | YES |
Minimum share capital |
USD 10,000, higher amounts are required in certain industries |
Local bank account required (YES/NO) |
YES |
Uses | Trading operations, services operations, subsidiary company |
Liability of the shareholders | limited to the capital contribution |
Visit required for incorporation (YES/NO) | NO, a local representative can be appointed |
Taxes to pay | Corporate tax, VAT, withholding taxes |
Corporate tax rate | 20% |
Audited financial statements required (YES/NO) | YES |
Advantages | Easy to incorporate, no travel requirement to open the company, access to double tax treaties |
Incorporation support (YES/NO) | YES |
Foreign investors setting up limited liability companies in Vietnam
The limited liability company (LLC) is by far one of the most employed business forms in the world, as it is recognized by most countries. Vietnam has made various changes in its laws, providing for new investment schemes and foreign investors coming here can set up businesses by using this legal form.
If you want to open a company in Vietnam as a limited liability company, you can choose between the following shareholding structures:
- a fully foreign-owned company;
- a partially foreign-owned company, also known as a joint venture, where only one Vietnamese member is allowed.
The choice should also be made based on the sector of activity in which the business will operate. Also, LLCs are divided into one-member and multi-member companies.
Our company registration advisors in Vietnam are at the service of foreign investors who come here and need support in starting businesses under the legal forms covered by the Company Law. Clients interested in opening companies in offshore countries, such as Belize or BVI, can receive assistance from our partners.
The main characteristics of the Vietnamese LLC
A limited liability company comes with many advantages, which is one of the main reasons it is selected by most of the investors who come to Vietnam from other countries. Among these, we mention the following:
- the members have limited liability;
- the company is allowed to issue bonds;
- it has a simple structure.
The structure of an LLC in Vietnam
Foreign investors who want to open a company in Vietnam and decide on the limited liability enterprise must know that from a corporate point of view, a multi-member company is based on a 3-tier structure:
- it must have a members’ council who will be headed by a chairperson;
- it must also have a director;
- it must also have a supervisory board.
The members’ council must hold one annual meeting and is the equivalent of the annual general meeting of the shareholders in other countries. With respect to the chairperson of the council, the person can hold this office for no more than 5 years.
These requirements are not imposed on one-member LLCs, as these can follow any of the two corporate structures below:
- they can appoint a president and a director;
- they can appoint a members’ council and a director.
You can obtain more information on these aspects from our Vietnamese company formation officers.
As Vietnam follows the latest trends, it should be noted that the LLC is an excellent choice for a startup in this country.
Requirements to open a limited liability company in Vietnam
When it comes to the single-member limited liability company, it is one of the simplest forms of setting up a business in Vietnam and can be explained by our local specialists. In the case of a private limited liability company, the minimum number of shareholders is one.
With respect to the multi-member limited liability company in Vietnam, which is also the most popular type of structure, the following requirements apply for its incorporation:
- the company must have a Members’ Council, a General Director or a Director;
- the company must have at least two founding members;
- the company’s maximum number of shareholders is limited to 50;
- in the case of limited liability companies with more than 11 shareholders, an Inspection Committee who will supervise the activities of the Members’ Council.
The Vietnam limited liability company can take the following forms:
- fully-foreign owned enterprise;
- a joint venture enterprise, if the foreign company has at least one local partner.
Another requirement related to opening a Vietnam limited liability company refers to the director who can be a foreign citizen, but he or she must have a work permit or a minimum experience of 3 years in a management position.
Our Vietnam company registration agents can offer full information on the requirements related to starting a limited liability company.
The trading name of the Vietnamese LLC
People who want to open a company in Vietnam as an LLC must pay attention to the trading name, as it must be unique, but it must contain công ty trách nhiệm hữu hạn (limited liability company in Vietnamese) or its abbreviation, TNHLimited liability company formation steps in Vietnam
The first steps to set up a limited liability company in Vietnam are to reserve a trading name, have the Articles of Association drafted and the company seal made. This information must be filed with the Business Registration Office.
Following that, the business owner must open the bank account and pay the business license tax. The last steps for forming a Vietnam limited liability company are registering for taxation, social security and employment purposes.Documents required for setting up an LLC in Vietnam
The following documents need to be prepared upon the registration of a Vietnamese limited liability company with the Trade Register:
- in the case of foreign investors, a certificate which attests their investments is required;
- the company’s Articles of Association and trade name reservation certificate must also be provided;
- the proof of the registered address is also necessary (this is a mandatory condition for opening a company in Vietnam);
- information about the shareholders (passports or legalized certificate of registration, depending on the founder);
- the business plan which must contain information about the project to be developed, the amount of money to be invested, the benefits to the community;
- information about the directors of the company (valid passports) and a power of attorney.
The list of documents to be filed upon the registration of a limited liability company in Vietnam can vary depending on the project to be invested in and whether the business will be fully or partially owned by the foreign entrepreneur. Also, the list can be more extensive if the founder is a foreign company.
With respect to the share capital requirements for setting up an LLC in Vietnam, the investor must decide on the amount of money necessary for the project.
Our Vietnam company registration consultants can help you prepare the documents required to set up an LLC here. You can also grant us the power of attorney if you want to register a business here in the fastest manner possible. We are also at your service with trademark registration services in Vietnam.
Initial costs for opening a LLC in Vietnam
Most of the costs which must be considered when opening a LLC in Vietnam revolve around the fees related to the incorporation procedure of the company. The first fee is the notary fee which must be paid upon the preparation and notarization of the incorporation documents. These depend on the Vietnam region and the notary providing the service. However, foreign investors can choose full company incorporation services in Vietnam which are cheaper.
Other costs which must be considered when starting a LLC in Vietnam are the office space rental contract.
These types of costs are not fixed, because they depend on the amount of money the future business owner is willing to spend, his or her needs and, the size of the company.
Governmental start-up costs in Vietnam
Apart from the costs mentioned above, there are also the governmental fees which must be considered upon the registration of a LLC in Vietnam. However, one should not worry as these costs are reduced compared to other countries in Southeast Asia. The governmental fees which must be paid when starting a limited liability company in Vietnam are:
– the company name certificate;
– the company seal;
– the registration fee of the company seal;
– the purchase of the VAT invoices;
– the publishing of the registration certificate with the National Business Registration Portal;
– the business license fee.
We remind investors of our virtual office services which can be used as business addresses for Vietnam companies.
Taxation of limited liability companies in Vietnam
All local companies, no matter if incorporated by national or foreign investors, will be taxed on their worldwide income in Vietnam. The corporate tax rate in Vietnam has a standard rate is 20%. Vietnamese LLC set up as joint ventures or deemed as startup companies can obtain a break from the corporate tax for the first few years of operations.
The other taxes which need to be considered when operating an LLC in Vietnam is the business license tax which must be paid on annual basis and the VAT which is one of the lowest in the region when it comes to the standard rate (10%).
When set up by foreign investors, the LLC can benefit from Vietnam’s double tax treaties when it comes to the taxation of the overseas shareholders.
We can also help with accounting services in order to have your company in Vietnam up to date with the tax and accounting requirements imposed by the authorities here. Each firm needs expert divisions to function efficiently. Particularly the accounting division, which performs demanding work and consistently occupies a very significant position. However, for many businesses, the cost of building a whole unit on-site may be unaffordable. So, our seasoned accountants in Vietnam can offer their assistance. You are welcome to take benefit from their services.
Why open a company in Vietnam as an LLC
The limited liability company in Vietnam has many advantages, among which the fast incorporation procedure and the low maintenance costs. Special attention must be paid to obtaining the investment license when it comes to having foreign ownership, however, with the help of our agents the procedure can be completed in about one month.
Just like other companies, the LLC must also register for taxation with the General Department of Taxation in Vietnam.
Foreign shareholders can also appoint legal representatives to act on their behalf in Vietnam. These can also be foreign citizens who can obtain work and residence permits.
The LLC is also suitable for those interested in expanding their operations in other neighboring markets.
Timeline for opening an LLC in Vietnam
The registration of a company in Vietnam, including that of a limited liability company, implies respecting a timeline. Here is an approximation of how long it takes to incorporate a business in Vietnam:
- the registration of the company with the Business Register takes between 3 and 6 working days;
- the approval of an investment project which must respect an investment policy takes between 5 and 10 days;
- the approval of an investment project which is not subject to any investment policy takes between 15 and 20 working days;
- the entire business registration procedure usually takes around one month to complete.
The time frame for starting a business in Vietnam is shorter compared to other countries, such as Finland where opening a company may take up to six weeks.
Steps to set up a company in Vietnam
Before summarizing the business registration procedure, our attorneys in Vietnam point out that for foreign investors additional steps that will be mentioned separately will be necessary.
Here are the steps to open a Vietnamese company:
- drafting the incorporation papers that consist of the trading name reservation and creation of the statutory paperwork;
- filing all the documents with the Trade Register;
- obtaining a tax identification code with the General Tax Department;
- securing a VAT number;
- getting the operating licenses;
- opening the company’s bank account;
- registering as an employer.
For foreign investors who decide to set up companies in Vietnam, the following steps must also be considered:
- the pre-approval stage which is necessary for large or strategic investment projects (such as construction operations, casino creation, airport constructions to name some examples);
- obtaining the Investment Registration Certificate, which is mandatory, no matter the type of investment.
Considering the procedure can be quite demanding, you can rely on our law firm in Vietnam for complete support. If you are a foreigner and also want to move to this country to open your company, you can benefit from guidance from our immigration lawyers in Vietnam.
Other types of companies available for registration
Generally speaking, the types of companies one can choose from are similar to those in other countries around the globe. These are:
- the limited liability company – presented above;
- the joint stock company;
- the branch office.
There is also the representative office, which can be set up by foreign companies and which bears a special status in Vietnam. By far, the simplest way to open a company in Vietnam is by registering a limited liability company.
We also have an infographic on how to set up a business in Vietnam:
Documents required for setting up a company
The list of documents required to establish a company in Vietnam is not extensive, so here is what you need to consider:
- the company’s charter, which can be created by our lawyers in Vietnam;
- the list of all board members;
- the list of legal representatives (if applicable),
- the incorporation;
- and declarations for the appointment and authorization of company officers.
Also, if you want to open a company in Vietnam as a foreigner, here is the list of documents to file to obtain the Investment Certificate:
- information about the investment project;
- the investment project proposal;
- proof of financial viability;
- information about the investor and its designated representative.
In the case of a local representative, the person can be a Vietnamese residence permit holder or an external agent with offices in this country.
Here is also our video on how to open a Vietnamese business:
Setting up a company in Vietnam in numbers
Here are some highlights of the requirements related to creating a company in Vietnam:
- it takes about 3 to 4 months to register a foreign-owned company in Vietnam;
- setting up a representative office, on the other hand, takes between 6 and 8 weeks;
- the creation of a branch office can be completed in about 4 months;
- the standard corporate tax in Vietnam is 20%.
If you need support to open a company in Vietnam, contact our lawyers. You can also rely on our accountants in Vietnam for assistance in tax matters.