Company Registration in Vietnam: Complete Guide for Foreign Entrepreneurs

Discover the process of company registration in Vietnam in this thorough article. Speak with our business formation experts to register your business in Vietnam today.

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    company registration in vietnam

    Vietnam is one of the nations with the greatest economic growth worldwide and also the third-largest market located in mainland Southeast Asia’s east. Its business-friendly regulations set it apart from other Southeast Asian nations and promote a robust inflow of foreign investment. Vietnam’s educated and active people are the country’s biggest economic asset. 

    Its extensive coastline offers numerous appealing beaches, areas of scenic beauty, and exposure to maritime resources, all of which are ideal for the growth of tourism. The services sector provided approximately one-fourth of the total jobs in the nation. 

    One of the main elements in the development of the economy is the advanced infrastructural facilities which have led to the construction of new urban transport systems, local airport expansions, etc. All these connect Vietnam to the outside world, making it simpler for firms to conduct commerce and transactions in the nation.

    This article will outline the steps an entrepreneur must take to register a company in Vietnam. Additionally, it covers the reasons, required paperwork, prerequisites, and benefits of company registration in Vietnam. 

    Why register a company in Vietnam?

    • Since joining the World Trade Organization, Vietnam’s economy has experienced significant improvement.
    • High-tech companies claim that Vietnam has good prospects for research and development due to its modern infrastructural facilities and exceptionally skilled personnel.
    • In addition, Vietnam’s manufacturing industry is thriving because of the establishment of numerous Open Economic Zones and generous tax advantages.
    • International companies that establish a corporation in Vietnam are permitted to own 100% of the business’s shares in some industries.
    • Vietnam’s clothing business is anticipated to become a growing sector.
    • Vietnam’s cost of living is almost 60% less than China’s.
    • Three high-tech parks, 325 industrial parks, 17 coastal economic zones, and four economic zones exist in Vietnam.

    Procedure for Company Registration in Vietnam

    Company registration in Vietnam can be done using the following steps:

    Search for a business name

    The Business Registration Office of the Department of Planning and Investment allows you to choose a name and search for available business names.

    Choose the business structure

    Once the chosen name is approved, it is essential to choose the form of business that you wish to register. The various business forms available in Vietnam are limited liability company, joint stock company, representatives, and branch offices.

    Have a registered office address

    It is essential to have a registered company office address if you wish to register a company in Vietnam.

    Gather the documents

    To register a company in Vietnam documentation like the memorandum and articles of association, business minutes, details of the founders, etc. must be collected.

    Acquire the investment registration certificate

    An investment registration certificate granted by the Department of Planning and Investment is required for setting up a foreign-owned business in Vietnam.

    Acquire the business registration certificate

    Submit a request along with the necessary documentation to the Department of Planning and Investment to obtain the Business registration certificate

    Obtain the business seal

    The entrepreneur must acquire a business seal that contains the business name and business id number.

    Documents required to register a company in Vietnam

    The required paperwork for company registration in Vietnam is listed below.

    • Memorandum of Association
    • Notarized passport of the firm’s authorized representative in Vietnam
    • Articles of Association
    • company minutes
    • Details of the founders
    • Lease Agreement
    • Account Statement
    • Registered  address  information

    Eligibility criteria for Vietnam company registration 

    Here are the eligibility criteria for company registration in Vietnam: 

    • The number of shareholders: Vietnam company registration requires a minimum of one stakeholder. However, the formation of a Joint Stock Company requires the presence of three shareholders.
    • Minimum capital requirement: The required minimum capital varies by company line, however, the typical share capital for an LLC is $10,000.
    • Registered office address: To register a company in Vietnam, you need a physical business address for your organization.

    Business entities for company registration in Vietnam

    The various business entities to register a company in Vietnam include:

    1. Limited Liability Company

    Limited Liability Company is the most popular form of corporate structure among international entrepreneurs, notably for small and medium-sized businesses (SMEs) due to its straightforward shareholder and business structure. An LLC is a type of corporate structure that allows 100 percent foreign ownership. An LLC can be established with one founder and 50 members at most.

    2. Joint Stock Company

    Joint Stock Companies are a form of business structure that may also allow 100% foreign ownership. Establishing JSC is the perfect choice for large corporations. Proprietors of joint stock companies have the right to offer stock and publish them on the Vietnamese stock market. A JSC must have at least 3 shareholders in order to be formed. The obligation of a shareholder in a JSC is restricted to their investment.

    3. Representative Office

    representative office in Vietnam is opened to form a representative of a foreign firm in the marketplaces of Vietnam. International businesses might undertake research, assess economic trends in the nation, and carry out tasks including supporting advertising initiatives, and regulating and evaluating product reliability,  via a representative office.

    4. Branch Office

    A foreign branch office acts as an expansion of the parent corporation. A branch office in Vietnam is not a  distinct legal entity and is permitted to engage in all business operations of its parent firm and raise profits.

    Advantages of Vietnam company registration 

    Here are the numerous advantages of company registration in Vietnam:

    Excellent location

    Vietnam is ideally situated in the middle of ASEAN. Additionally, it has one of Southeast Asia’s most promising economies. Thailand, and Cambodia, are all neighbors of Vietnam. This offers Vietnam advantageous circumstances for global trade and shipping. The region is adjacent to southern China, which has one of the biggest economies and commerce centers in the world.

    Free Trade Agreements

    Vietnam has actively signed free trade agreements in the context of the global economy. The nation has negotiated 15 free trade agreements with several important economic partners. International investors are obviously highly motivated to enter the Vietnamese market as a result of these FTAs. Additionally, Vietnam has developed diplomatic ties with 190 nations across the globe.

    Desirable consumer market

    Vietnam is a desirable consumer market due to its rapid population expansion, increasing per capita income, and high discretionary income.

    Foreign Direct Investment

    Vietnam has promoted Foreign Direct Investment by routinely updating governmental guidelines and offering tax breaks for FDI.

    Competent and affordable workforce

    Another benefit of conducting commerce in Vietnam is that it has a large talent pool that produces competent but reasonably priced labor. This enables businesses to rapidly grow up their workforce and extend business operations at a much cheaper cost.

    Taxation in Vietnam

    The following taxes must be paid by the companies in Vietnam:

    • Corporate Income Tax: The corporate income tax (CIT) rate is generally 20% in Vietnam. Depending on the area and unique project requirements, CIT rates for businesses engaged in the oil and gas sector might range from 32% to 50%.
    • Value-added tax (VAT): Vietnam’s VAT rates typically range from 0% to 5% to 10%, based on the kind of service or product.
    • Social insurance contributions: Social insurance (SI) contributions in Vietnam is 17.5%.
    • Stamp Duty: Stamp duty must be paid on a number of items, including real estate, vehicles, motorbikes, and other items that require ownership registration.

    Cost for company registration in Vietnam

    Entrepreneurs must take into account the costs involved in starting a firm when they think of establishing a business in any country. For Vietnam company registration, an entrepreneur has to consider numerous fees such as the cost of a business seal, the cost of acquiring business certificates, etc.

    Here are the costs associated with company registration in Vietnam:

    • Official documentation photocopies and verification will cost at least 100,000 VND.
    • The registration fee for establishing an international business in Vietnam is VND 200,000.
    • The cost to acquire the enterprise registration certificate is 100,000 VND.
    • An international corporation establishing itself in Vietnam must pay 10,000 VND to post its information.
    • A business seal costs around 250.000 VND.

    Conclusion

    Vietnam has developed itself as a reliable, swiftly expanding, and high-growth location. There are several favorable economic factors in this country that have led to its growth over the years such as a stable political structure, a history of strong economic and market progress, a large pool of educated and qualified workers, and an open foreign direct investment atmosphere. Vietnam’s membership in the ASEAN and World Trade Organization facilitates easy to trade with other nations.

    If you intend to Vietnam company registration, you can speak with our company formation experts at OnDemand International. Our experts will walk you through each stage and assist you in the incorporation process.

    FAQ’s

    • The registration fee for establishing an international business in Vietnam is VND 200,000.
    • The cost to acquire the enterprise registration certificate is 100,000 VND.

    An entrepreneur can start a business in Vietnam by applying for the business registration certificate and submitting the necessary documents along with it.

    • Vietnam has developed itself as a reliable, swiftly expanding, and high-growth location. 
    • There are several favorable economic factors in this country that have led to its growth over the years such as a stable political structure, a history of strong economic and market progress, a large pool of educated and qualified workers, and an open foreign direct investment atmosphere. 
    • Also, the modern infrastructural facilities in the nation connect Vietnam to the rest of the world making it easier for businesses to perform trade and transactions in the country. 

    The various business forms available in Vietnam are:

    • Limited Liability Companies 
    • Joint Stock Companies 
    • Representative Offices
    • Branch Offices

    The corporate income tax (CIT) rate is generally 20% in Vietnam. Depending on the area and unique project requirements, CIT rates for businesses engaged in the oil and gas sector might range from 32% to 50%.

    The typical share capital for an LLC is $10,000.

    Yes, in Vietnam, foreigners pay taxes. Depending on their residency status, anyone who works in Vietnam, even foreigners, must pay personal income tax (PIT).

    The advantages of Vietnam company registration are:

    • Free Trade Agreements
    • Excellent location
    • Foreign Direct Investment
    • Competent and affordable workforce
    • Desirable consumer market