Vietnam’s growing economy offers a plethora of opportunities for international investors. If you’re looking to establish a significant presence in the Vietnamese market, registering a joint stock company (JSC) might be the ideal choice for your business.
This guide delves into the intricacies of joint stock company registration in Vietnam, providing a clear roadmap for navigating the process.
Understanding a Joint Stock Company in Vietnam
A joint stock company in Vietnam, also known as a shareholding company, is a legal entity where ownership is divided into tradable shares. Unlike limited liability companies (LLCs), JSC registration in Vietnam allows for a minimum of three shareholders, who hold a stake in the company proportional to their share ownership. This structure facilitates raising capital through the issuance of different types of shares, including ordinary and preference shares. Furthermore, Vietnam’s JSC registration opens up further growth opportunities by facilitating possible listings on the stock exchange of the nation.
Characteristics of a Joint Stock Company in Vietnam
Legal Status: Under Vietnamese law, a joint stock company (JSC) is an independent legal entity that is capable of owning property, incurring debts, and suing or being sued on its behalf.
Shareholders: A JSC must have three shareholders at the very least and there is no upper limit. Individuals or corporations may be shareholders, and their liability for the debts and liabilities of the business is limited to the amount of capital they have contributed.
Board of Directors: A JSC is required to have a Board of Directors (BoD) is charge of overseeing the business’s operations. The BoD must have between 3 to 11 members.
Capital Structure: A JSC’s charter capital is divided into shares, which are transferable at any time unless the company’s charter specifies otherwise.
Advantages of Registering a Joint Stock Company in Vietnam
JSC registration in Vietnam offers several advantages for international investors:
- Limited Liability: Personal assets of shareholders are protected from business debts.
- Capital Raising: JSCs can raise significant capital by issuing shares.
- Enhanced Credibility: JSCs are thought to be more reputable and well-established organizations, which may draw better alliances and capital.
- Potential for Listing: JSCs can list their shares on the Vietnamese stock exchange, offering greater liquidity and growth opportunities.
- Transferability of Shares: A JSC’s shares are easily transferable, which improves liquidity and makes them an appealing investment.
- Continuity: A JSC guarantees business continuity by being in operation even in the event that its shareholders change.
Eligibility Criteria to Register a Joint Stock Company in Vietnam
To register a joint stock company in Vietnam, the following eligibility criteria must be met:
- Minimum Number of Shareholders: A JSC must have at least three shareholders.
- Legal Capital Requirement: While there is no general minimum capital requirement, certain business sectors may have specific legal capital requirements.
- Registered Address: The company must have a registered office address in Vietnam.
- Nationality of Shareholders: Both Vietnamese and foreign individuals or entities can be shareholders in a JSC.
- Compliance with Vietnamese Laws: The company’s operations have to abide by all applicable laws and regulations in Vietnam.
Process of Registering a Joint Stock Company in Vietnam
1. Selecting a Name for Your Business
Selecting a unique and compliant company name is the first step in registering a joint stock company in Vietnam. The name must adhere to Vietnam’s naming regulations and not be confusingly close to or identical to already-existing company names.
2. Preparing the Necessary Documents
The following documents are required to register a JSC in Vietnam:
- Application for Business Registration: This contains information about the name of the business, its registration address, its operations, and its charter capital.
- Charter of the Company: The company’s charter outlines the organizational structure, governance, and operating guidelines of the corporation.
- List of Shareholders: This document lists all shareholders and their respective capital contributions.
- Identification Documents: Copies of the identification documents (e.g., passports or national ID cards) of individual shareholders and legal representatives.
- Power of Attorney: An authorization letter is needed if the application is submitted by a designated representative.
3. Filing the Application with the Business Registration Office
Submit the prepared documents to the Business Registration Office (BRO) under the Department of Planning and Investment (DPI) in the province or city where the corporate headquarters are situated. The BRO will review the application and issue a business registration certificate if all conditions are satisfied.
4. Obtaining a Business Registration Certificate
Once the application is approved, the BRO will issue a business registration certificate. This document, which covers crucial details including the company name, operations, and charter capital, attests to the JSC’s legal standing.
5. Tax Registration
After obtaining the business registration certificate, the company must register with the local tax authority to obtain a tax code. This step is crucial in order for the business to operate lawfully and pay its taxes.
6. Opening a Bank Account
The company needs to proceed with opening a corporate bank account in Vietnam to conduct business transactions. The account would be utilized for capital contributions, payments, and other financial transactions.
Expected Costs for Joint Stock Company Registration in Vietnam
The costs of registering a joint stock company in Vietnam can vary based on several factors, including the company’s size, industry, and specific requirements. Here are the main cost components:
- Government Fees: These include fees for business registration, issuance of the business registration certificate, and publication fees.
- Legal and Consulting Fees: Engaging legal and consulting services can help navigate the registration process smoothly, but it comes at a cost.
- Capital Contribution: The amount of capital that shareholders contribute to the company.
- Additional Licenses and Permits: Fees for obtaining any additional licenses or permits required for the company’s operations.
- Operational Costs: Expenses associated with establishing and keeping the business operational, such as office rental, salaries, and utilities.
Conclusion
There are many benefits to registering a joint stock company in Vietnam, such as restricted responsibility for shareholders, the possibility to obtain cash through public shares, and more chances for corporate expansion. You may guarantee a seamless and effective registration procedure by adhering to the comprehensive instructions provided in this guide.
Our speciality at OnDemand International is helping companies in Vietnam with their registration requirements. Our team of experts can help you navigate the complexities of joint stock company registration, ensuring that your business is set up for success in this dynamic market.
FAQ’s
A joint stock company in Vietnam must have at least three shareholders.
Yes, foreign investors can register a joint stock company in Vietnam and hold shares in the company.
The primary benefits include the capacity to obtain cash through public shares and limited responsibility for shareholders, transferability of shares, and business continuity.
JSCs in Vietnam are subject to ongoing compliance requirements. These include:
- Filing annual financial statements and tax returns.
- Holding annual general meetings of shareholders.
- Maintaining proper corporate records.
- Respecting labour laws and employee benefits requirements.
