Registering a company in Vietnam has gained significant attention from foreign investors. With its dynamic economy and prime geographical position, Vietnam is increasingly seen as an attractive hub for entrepreneurs eager to broaden their business prospects. In this article, Informly will walk you through the essential steps of setting up a company in Vietnam, offering expert guidance and helpful advice to ensure a smooth experience. Let’s dive into this comprehensive guide with Informly.
Company Registration Process in Vietnam
The process of establishing a company in Vietnam involves several critical steps that foreign investors must complete before beginning business operations. To simplify this process, Informly provides a concise summary of the seven necessary steps outlined below.
Step 1: Choose a reputable law firm
Registering a company in Vietnam can be challenging for foreign investors. However, working with a local law firm such as Nova Law can streamline the process. Their experts, with deep knowledge of company registration, offer precise solutions that save both time and resources.
Step 2: Provide necessary information
At the outset, the law firm will require investors to provide essential information, including details about the investor, preferred company name, intended business activities, declared investment capital, and labor requirements. This information is crucial for preparing a comprehensive license application in compliance with legal requirements.
Step 3: Prepare required documents
Under the guidance of your lawyer, the next step is to prepare all necessary documents for company formation. Your lawyer will handle the preparation of registration forms, and you may need to provide signatures and/or stamps to authenticate the documents.
Step 4: Register the Investment Registration Certificate (IRC)
This step is essential for foreign companies, regardless of whether they have Vietnamese partners. The Investment Registration Authority typically reviews and approves small-scale investment projects within an estimated 15 working days, issuing the Investment Registration Certificate (IRC) afterward.
Step 5: Register the Enterprise Registration Certificate (ERC)
Once the IRC is obtained, the investor must register the company at the Department of Business Registration, which usually takes around 5 working days. The result will be the issuance of the Enterprise Registration Certificate (ERC), along with the company seal and tax code, officially confirming the company’s ability to operate in Vietnam.
Step 6: Open a corporate bank account
A foreign company in Vietnam is required to have at least two bank accounts:
- Direct investment capital account for transactions related to the investment.
- Current account in VND for daily business operations.
Step 7: Complete post-registration procedures
Beyond the initial registration steps, investors must complete additional post-registration procedures, including purchasing a USB token for digital signing, displaying the company’s sign at the registered office, registering initial tax information with the tax authority, submitting periodic reports, registering for customs codes and trademarks if needed, and contributing the full registered charter capital within 90 days from the ERC issuance.
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Required Documents and Information for Company Registration in Vietnam
One of the most common business structures for foreign-invested startups in Vietnam is the Foreign-Invested Limited Liability Company (LLC). The process of establishing this type of company consists of two main stages. First, you need to obtain approval from the Department of Planning and Investment via an Investment Registration Certificate (IRC) for your project in Vietnam. After that, you will apply for the Enterprise Registration Certificate (ERC) to officially establish your company. While the official time frame for these two stages is approximately 30 days, thorough preparation before starting is crucial.
Company Registration Information:
- Clearly define the company’s industry and scope of business.
- Specify the proposed capital and scale of the business.
- Provide the official company address.
- Confirm the ownership rights and organizational structure of the company.
Documents Required for Company Registration in Vietnam:
- For Corporate Investors:Company establishment certificate (certified copy) or business registration certificate or equivalent documents. The most recent audited financial report (certified copy). A certified copy of the passports of the directors and shareholders.
- For Individual Investors: The latest bank statement (certified copy). A certified copy of the director’s passport.
- For the Company’s Proposed Address (residence or business premises): A lease agreement from the landlord or property owner.
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Essential Requirements for Foreigners Registering a Company in Vietnam
When establishing a company in Vietnam, it is crucial for foreign investors to be aware of ongoing legal compliance obligations in the country. Here are several important factors to consider when setting up a business in Vietnam:
- Minimum Capital Requirements: While Vietnam does not impose a specific minimum capital requirement for most industries, the Department of Planning and Investment evaluates registered capital to ensure it meets the necessary expenses for starting the business. However, certain sectors may have special capital demands.
- Charter Capital and Total Investment Capital: Both Charter Capital (the amount contributed by the owners) and Total Investment Capital (which includes both Charter Capital and loans) must be registered. Any adjustments to these amounts require approval from local authorities.
- Capital Contribution Timeline: Foreign investors must make their capital contributions within 90 days of establishing a Foreign Invested Enterprise (FIE), unless an extension is granted by the authorities.
- Bank Account for Capital Transfers: To facilitate capital transfer within Vietnam, foreign investors must open a local bank account. This is essential for ensuring smooth financial transactions within the country.
- Registered Business Address: A physical business address in Vietnam is required. While service-based businesses may use a virtual office, a physical location is the standard. The Department of Planning and Investment may verify the business address during the registration process.
- Legal Representative: A company must designate at least one legal representative (such as the Company President or Director). The representative needs to have a Vietnamese residential address, although having permanent residency is not mandatory at the time of incorporation.
- Accounting and Tax Obligations: Companies must comply with Vietnam’s accounting and tax requirements, including regular filings for corporate income tax, value-added tax, and personal income tax. Specific filings may also be required periodically.
- Annual Audit Requirements: Limited Liability Companies (LLCs) and Representative Offices must submit annual audit reports in accordance with Vietnam’s official tax year-end schedule. Representative Offices generally face less stringent auditing requirements.
- Labor Compliance: Employers must adhere to Vietnam’s labor laws, including restrictions on the types of employees, work permit requirements for foreign workers, and the inclusion of social insurance in the payroll process.
- Business License Tax and Other Regulatory Compliance: Starting from the second year of operation, companies must pay an annual business license tax. Companies must also comply with renewal requirements and any regulations specific to their business licenses.
- Foreign Investment Reporting: Foreign investors must submit reports on their investment activities at quarterly, semi-annual, and annual intervals, outlining the progress and implementation of the investment.
FQA?
Question 1: How long does it take to issue an IRC?
The processing time for the Investment Registration Certificate (IRC) is typically around 15 working days from the date you submit your application. However, this period may extend to 30 days if your application is incomplete or requires further review by other authorities. To speed up the process, ensure that your application is complete and cooperate promptly with the relevant authorities.
Question 2: How long does it take to issue an ERC?
The processing time for the Enterprise Registration Certificate (ERC) is usually 3 working days from the date you submit your application. However, the actual processing time may be longer if your application requires modifications or additional documents. If your application is rejected, you will be notified and provided with an explanation.
Question 3: Do I need to reside in Vietnam if I am the legal representative?
The legal representative must have a valid residential address in Vietnam, live in Vietnam for at least 6 months each year, and cannot leave the country for more than 3 months at a time.
Question 4: What address can I use to register my company in Vietnam?
Every company in Vietnam must have a fixed business location, known as the registered address. While using a private home for company registration may be allowed depending on the nature and purpose of the business, it’s important to note that an apartment is not eligible for this purpose.
Question 5: Where can I register my company in Vietnam?
You can register your company through law firms or submit your application directly or online to the Department of Planning and Investment via the National Business Registration Portal.
Question 6: What is the company registration authority in Vietnam?
The company registration authority in Vietnam is the Department of Planning and Investment. Foreign investors can submit their applications directly or online to the Department of Planning and Investment through the National Business Registration Portal. The Department will then review the validity of the application and issue the Enterprise Registration Certificate.
Ready to start your business in Vietnam? Let Informly guide you through the entire company formation process. Contact us through hotline: 090 739 2969 or our website Informly today to get expert support and ensure a smooth, hassle-free setup!
