Setting up a business in Vietnam involves navigating various stages that require obtaining approvals and collecting the necessary documentation from relevant local authorities. Additionally, there are specific requirements depending on the type of business entity and the particular market sector the company plans to enter.

This article will therefore provide a step-by-step breakdown of the company setup process, guiding firms to establish their presence in Vietnam as efficiently as possible.

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Requirements for Business Registration

When establishing a business in Vietnam, there are six main requirements that entrepreneurs should be aware of to ensure smooth business operations and compliance with legal regulations. These include Charter Capital and Legal Capital, Legal Entity Status, Legal Representative, Company Name, Head Office, and Business Sectors:

1. Charter Capital and Legal Capital for Company Establishment: Charter Capital refers to the amount that members or shareholders commit to contribute to the company, as stated in the company's charter. Legal Capital, on the other hand, is the minimum capital requirement set by law for establishing a company in certain sectors. 

• For instance, a securities investment consultancy company must have at least VND 10 billion. While the Law on Enterprises does not set a minimum Charter Capital except for industries requiring Legal Capital, the amount should be chosen carefully. Low Charter Capital may reduce credibility, whereas higher amounts may increase financial risk.
• The business must ensure that Charter Capital is fully contributed within 90 days from the date of receiving the Business Registration Certificate. If the contribution is incomplete after this period, the company must register for changes.
• The level of Charter Capital also affects the annual business license tax: VND 3 million for companies with over VND 10 billion, and VND 2 million for those with under VND 10 billion.

2. Requirements for Legal Entity Status: All organizations and individuals have the right to establish, contribute capital to, and manage businesses in Vietnam, except for cases such as entities without legal person status or individuals under the age of 18.

3. Requirements for the Legal Representative: The company's legal representative must be at least 18 years old, possess full civil capacity, and not be subject to any restrictions from managing a business. This person does not necessarily have to be a capital contributor in the company.

4. Requirements for the Company Name: The company name must include the type of business and a unique name. Naming should follow principles such as avoiding duplication, not violating historical values, and not using words related to state authorities.

5. Requirements for the Head Office: The main office must be located within Vietnam, have a clear address, and cannot be situated in an apartment or dormitory.

6. Requirements for Business Sectors: Companies have the right to register business activities in sectors not prohibited by law. However, they must comply with specific regulations in sector-specific legal documents. For conditional sectors, businesses must meet the required conditions for each sector.

Selecting A Business Entity

To establish a business in Vietnam, follow these steps:

Step 1: Determine the Company Type  

Choose one of the following business structures: limited liability company, joint-stock company, partnership, single-member limited liability company, branch, representative office, or private enterprise. Each type has different conditions, rights, and obligations for stakeholders.

Step 2: Understand the Legal Regulations  

Familiarize yourself with Vietnamese laws on business registration, taxation, accounting, labor, insurance, foreign exchange, anti-money laundering, and restricted or conditional business sectors. It's also important to be aware of investment incentives available for specific industries and economic zones.

Step 3: Register the Business and Obtain an Investment License  

Prepare the necessary registration documents, including the business registration application, company charter, list of members or shareholders, copies of ID or passport of the owner, and power of attorney (if applicable). Submit these documents to the local Business Registration Office or online via the National Public Service Portal. If you are a foreign investor or have foreign capital, you will also need an investment license from the Investment Management Authority.

Step 4: Commit to Charter Capital  

Once you have obtained the Business Registration Certificate and, if necessary, the investment license, proceed with the commitment to the charter capital as required by law. This may involve depositing funds into the company's bank account or proving the capital through other assets such as machinery, equipment, or real estate.

Step 5: Complete Tax and Accounting Procedures  

Carry out the following tasks:

• File and pay initial taxes.
• Purchase and use invoices, and submit monthly, quarterly, and annual tax reports.
• Prepare and submit annual financial statements.
• Conduct a financial audit if required.
• Participate in social insurance, unemployment insurance, and health insurance programs for employees.

Step 6: Comply with State Agency Regulations  

Ensure compliance with the regulations of relevant state agencies concerning the company's business activities, such as market management, labor management, food safety, and environmental management.

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NVCS Law Firm – A Trusted Company Formation Consultancy  

With over 10 years of experience in consulting and providing company formation services, NVCS Law Firm is a reputable firm trusted by many clients. We understand that when choosing a company setup service, the most important factors for customers are clarity and fast completion times.

NVCS Law Firm offers legal solutions, administrative procedures, and assistance with all aspects of company formation. We are trusted by thousands of businesses in Ho Chi Minh City, Ha Noi and throughout the country.

During the consultation, you will receive comprehensive support on business types, establishment requirements, registration documents, administrative procedures, and other relevant issues.

Lawyer: Mr. Tony

Phone: +84 919 195 939

Email: tuulawyer@nvcs.vn

Website: nvcs.vn

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