Vietnam company registration: A full run-down of the procedures and requirements
Starting a business in Vietnam is a promising endeavor, but it demands a clear understanding of the country’s regulations. For new and foreign entrepreneurs, handling this rather complex process is no easy feat. With this article, On Digitals will help you learn more about Vietnam company registration and what you need to prepare.
Detailed Vietnam company registration process
Vietnam is a country with a safe and stable market teeming with potential, especially during the fourth industrial revolution. Naturally, many entrepreneurs and businesses want to capitalize on their opportunities to enter this fruitful market. Before that, learning about the Vietnam company registration procedures should be the very first thing on their agenda.
The registration process is complicated, involving many steps ranging from preparing and verifying documents to filing applications. Vietnam’s authorities aim to maintain the healthy condition of the market, and the registration will ensure that all businesses operating in the country are approved by the government.
Overall, the process includes four key steps:
1. Initial preparation and pre-investment approval
In the first step, business owners should take their time researching the requirements of the Vietnamese government for similar businesses. While most enterprises primarily focus on preparing documents for subsequent steps, certain projects necessitate government approval. These projects typically fall into the following categories:
- Residential housing construction
- Power plants
- Transportation (airport, terminals, ports, etc.)
- Petroleum processing and distribution
- Businesses involve betting (casinos, horse racing, etc.)
- Golf courses
- Ventures situated near sensitive border areas or historical landmarks.
- Ventures involve relocating civilians or repurposing forests and rice crops.
In this case, specific permits and applications are required. Depending on the nature of the business, entrepreneurs will need to file different applications to various departments.
On Digitals advises entrepreneurs to seek consultation for their specific business ventures. Law firms or any establishment with a firm understanding of Vietnamese law and regulations can be instrumental in ensuring businesses remain compliant.
2. Investment Registration Certificate (IRC) application
After the initial preparations, the first step is applying for an Investment Registration Certificate (IRC). This is the equivalent of a Foreign Investment Approval in other countries. All foreign-owned investments must go through this step to operate legally in the country.
The IRC displays everything about the investment, including its purposes, investors, locations, goals, sources, duration, etc.
To receive an IRC, entrepreneurs need to prepare the following:
- Implementation of investment project application (details of the project in Vietnam)
- Project proposal (details of the investment project, including lease agreements or land use needs)
- Legal papers of the investors and authorized representatives (for organizations)
- Lease agreement or memorandum of understanding (MOU)
- Financial statements (of the last two years of a company’s operation with additional information regarding financial capacity)
- Other documents relating to the venture (if required)
After sorting out all necessary documents, send the IRC application to the Department of Planning and Investment (DPI) in the province where you plan to establish your company. The DPI typically takes around 15 business days from submission to review and approve the application. However, the timeframe may be longer for certain cases, especially if the sector is not under the jurisdiction of the WTO.
3. Enterprise Registration Certificate (ERC) application
Next up, the Enterprise Registration Certificate (ERC) will facilitate the implementation of a new business in Vietnam. Additionally, it will provide business owners with the business identification number, which is also the tax code.
Unlike the IRC, which is more about the investment, ERC focuses more on the entity. It includes the business name, credentials, charter capital, representatives, and company type.
The ERC application calls for this information:
- Entity registration application
- Company charter
- List of all board members and legal representatives
- Letters of appointment and authorization
Remember, all documents need to be notarized and translated into Vietnamese by authorized establishments beforehand.
The ERC is usually issued within approximately 3 working days after submission.
4. Post-licensing activities
Step 3 ensures that the new company is officially realized as an entity in Vietnam, but this is not enough to step into operation. To ensure a seamless start for your new business, make sure to cross these entries off your list:
- Obtaining an official stamp/seal
- Opening new bank accounts
- Tax registration
- Labor registration
- Charter capital contribution
- Register customs code
- File trademarks
- Issuing a public new business announcement
Requirements for Vietnam company registration
After you have learned about the process and the documentation needed for the four-step procedure, it is time to go through the list of requirements in detail.
Vietnam does not have a minimum capital limit for most sectors. However, the DPI will evaluate the registered capital to see its capability to sustain the business until it generates enough revenue to do so itself.
There are cases where there is a minimum limit, so pay close attention if your business belongs to these categories:
In case there are multiple investors, capital contribution must be done within 90 days of the enterprise’s establishment date.
Note: The registered capital is stated on your Business Registration Certificate, and your future business partners are able to see it. Also, it is possible to change the capital, but only through a formal application process.
Most regulations concerning human resources are stated in the Vietnamese labor laws. Generally, there is nothing too complicated, but there are two rules related to the company registration phase:
- The law requires that there must be at least one legal representative residing in Vietnam. This means they need to have a residential address in the country.
- Furthermore, any foreigner involved with the business will need a work permit to operate here.
Speaking of addresses, the company itself also needs a legal one in Vietnam. Since most businesses operate at a physical location, this raises no particular issues regarding registered addresses. For businesses offering virtual services, a virtual address is also acceptable.
Nonetheless, registering a legal address is a must for businesses in Vietnam as the DPI may verify it.
Strictly adhere to Vietnamese labor, tax, and environmental laws to maintain compliance. Additionally, pay close attention to any industry-specific regulations that apply to your business activities. Staying compliant is essential to avoid legal issues and ensure the smooth operation of your company in Vietnam.
FAQs about Vietnam company registration process
How long does the entire process usually take?
While the registration process typically takes 30 to 60 days, the timeline may vary based on factors like the complexity of your business and regulatory changes.
Which business structure types are available in Vietnam?
Based on your objectives and resources, you can choose the most suitable business structure for your venture. The most common types are limited liability company (LLC), joint-stock company, or representative office.
- Limited liability company (LLC) gives you the most flexibility. It is ideal for both single and multiple investors, allowing a lot of room for adjustments during operations.
- Joint-stock company (JSC) is perfect for large enterprises that require a complex organization. Though, there must be a minimum of 3 investors to start a joint-stock company.
- Representative office is only a viable option for companies aiming to learn and familiarize themselves with the market. This entity is not allowed to trade, but in exchange, it takes less time to establish than the other two types.
Who can be considered a legal representative?
A legal representative can be anyone with decision-making rights and obligations in the company. For example, these individuals are able to sign contracts with other parties on behalf of the board of directors. Companies can also use Power of Attorneys to authorize an individual for certain tasks.
Do I need to have a visa to establish a business in Vietnam?
The answer is no. In fact, you do not need to be in the country to successfully set up a business in Vietnam. You can either delegate the responsibility to a trusted Vietnamese representative or enlist help from a firm.
With that being said, a foreigner cannot legally work in Vietnam without a visa. You will still have ownership of the business, but all operating activities are out of your hands. This is why On Digitals recommend you to apply for a visa nonetheless to oversee and manage your business.
Overall, Vietnam company registration is a meticulous process that requires careful planning, strict adherence to regulations, and patience. On Digitals hope that these steps can help entrepreneurs and foreign investors successfully register a new business in Vietnam.
If you want to learn more about the Vietnamese market, keep your eyes peeled for more articles on our website. On Digitals is a Vietnam-based digital marketing agency offering comprehensive services to help put your brand in the spotlight. Thanks to our expertise, passion, and insights about the current market, we strive to deliver the most effective marketing solutions for our clients. Contact On Digitals now and learn more about our social media, website design, and creative design services for your next campaigns.