How to register a company in vietnam from anandu Vinayak's blog

Vietnam is located in South-Eastern Asia. Agriculture is the primary activity and the cultivation of rice is the main source of income for most Vietnamese.

Many investors choose Vietnam for their company registration because it offers technological incentives for companies to establish. In this country, there is cheap labour in comparison to other countries.  In Vietnam, investors also get benefit from double taxation.

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Legal entities in Vietnam: an overview

The most common types of entities in Vietnam are:

Limited liability company (LLC):

In this type of entity, there are 1 to 50 members which are also known as owners or founders. These companies do not have shareholders.

Joint-stock company (JSC):

In this type of company, there are 3 minimum shareholders holders and there is no maximum limit.

Requirements/eligibilities for registration of a company in Vietnam

Foreign ownership regulations in Vietnam:

Vietnam allows 100 percent foreign ownership to most of the businesses related to trading, IT, manufacturing, education. But it sometimes disallows foreign ownerships to some businesses. Most of the foreign ownerships are regulated by World Trade Organizations (WTO) agreements but some of them are neither regulated by WTO nor by local laws. In this case, one needs to take the approval of the ministry involved in work related to industries.

Minimum capital requirements:There are no minimum capital requirements for any business line except business related to language centres, vocational schools, real estate companies, banking, insurance, and finance.

The business certificate will show the amount of capital. Change in the capital will lead to a change in documents.

Registered address:

In Vietnam, servicing companies can provide virtual addresses but businesses related to manufacturing, restaurants, retail trading, etc. One must have to submit a document as proof of address that will show the place where one will incorporate business after registration.

Resident director:

All companies incorporated in Vietnam must have at least one resident director who is having a residential place whether having residential status or not.

Documents required for registration of a company in Vietnam

Investment certificate

Enterprise certificate

Memorandum of association

Articles of association

Business license

Passport and visa

Residency information

Steps to the registration of a company in Vietnam

The procedure below shows the process of registration of an LLC company in Vietnam.

Step1 – investment registration certificate

If a foreign company wants to be incorporated in Vietnam then it requires an investment registration certificate. It is issued by the department of planning and investments.  It generally takes a month to issue this certificate but when foreign ownership is neither regulated by WTO nor by the local government then issuance of this certificate will take a longer time. It will take 3 weeks as a statutory time limit.

Business registration certificate-

A business registration certificate is also known as an enterprise registration certificate.  This certificate is also issued by the department of planning and investments. Its statutory time limit is 1 week.

Tax registration and payment of the business license tax-

All the companies are required to pay tax online through an online portal and also submit tax declarations and reports. The company’s Tax number is the business license certificate number.

Capital contribution-

After receiving a business registration certificate, one must have to contribute capital within 90 days otherwise he is liable to pay a fine.

Apply for sublicenses or permits, if applicable-

It takes approximately one month to the registration of a company in Vietnam. But in some cases where the company needs to apply for sublicenses can take a longer period.

Compliances for companies in Vietnam

Board meetings- In the case of a public limited company, it is required to conduct board meetings quarterly.

Annual general meeting-  LLC companies are not required to conduct an annual general meeting but JSC and public limited companies are required to conduct this meeting.

Tax returns- In Vietnam, corporate tax is 20% whereas the personal tax rate is 35%.

Foreign investments and business registration have to be notified with relevant authorities. If there is any change then it must be notified to the department of planning and investments.

Minutes of a board meeting and annual general meeting are kept with the registered office.

At least one resident legal representative must reside in Vietnam.

Foreign investment report – These reports include profits, losses, and expenses throughout the year.

Compliance with employees law – This includes registering employees with social insurance and also making sure that foreign employees must have a permit in Vietnam.