Foreigners looking to Invest in Vietnam now have more choices than ever before, including 100% foreign-owned entities. Some options for foreigners looking for incorporation options in what is South East Asia’s fastest-growing economy are as follows:
Limited Liability Company (LLC)
The most common business structure in Vietnam. Limited liability company is an ideal choice for small and medium-sized enterprises (SMEs). As only one founder is required, single investors often favour this structure. Some notes to remember are that LLCs are not allowed to be listed on the Vietnam Stock Exchange, and the founders cannot issue public shares.
A representative office gives a foreign company presence in Vietnam. However, it is minimal. Foreign companies registered as Representative Offices are not permitted to generate income on behalf of the company. The representative head or legal representative can sign documents on behalf of the foreign firm if that person is authorized to do so. This option is usually used by companies who simply want to observe the local market before a full expansion.
Joint-Stock Company (JSC)
The structure of a Joint-stock company is ideal for Medium and Large-sized Businesses since it requires a minimum of three founders to establish. The registration process for a JSC is more complicated and takes longer to process the paperwork and get the license issued. This type of firm is allowed to issue shares and be listed on the Vietnam stock exchange.
This corporate structure acts as an extension of the parent company in Vietnam. The owners of the multinational branch in Vietnam are allowed to carry out business activities and make and register profits without incorporating an outside legal entity.
Starting A Business In Vietnam: The Requirements
The process of incorporation for each type of company mentioned above takes about 1-3 months on average. The foreign investors wishing to set up their company in Vietnam must follow these steps:
- Foreign Investors in Vietnam are required to have an INVESTMENT REGISTRATION CERTIFICATE (IRC). This document must be obtained from the department of planning and investment (DPI).
- The second certificate needed by the government is the ENTERPRISE REGISTRATION CERTIFICATE (ERC).
- Once the first two certificates have been issued, foreign investors are required to finish with tax registration in order to be able to pay license taxes and carry out their business.
How can WeCorporate help?
- Advice from experts on the ideal legal entity type for your needs
- Provide detailed instructions and guidelines for the collection and submission of the required documents.
- Act as a local representative to take care of legal paperwork in your name without your need to be in the country.
- Provide correct legal assistance during the entirety of the business incorporation process.
- Help with migration and work permits matters.
FAQs on Vietnam Company Incorporation
- Limited Liability Company (LLC)
- Representative Office
- Joint-Stock Company (JSC)
- Branch Office
- Yes, most of the industries allow 100% foreign ownership in Vietnam.
- To start a Joint-Stock Company, you will need:
- A minimum of three founders
- Investment Registration Certificate (IRC) – Foreign Investors
- Enterprise Registration Certificate (ERC)