Vietnam Company Registration
Service Description
| I. Advantages of Vietnam company registration |
| Vietnam is one of the major emerging economies with a growing influence in Asia. Free trade agreements with other countries, preferential taxation and a young workforce have contributed to its steady economic growth; its strategic location at the center of Southeast Asia, with its long coastline reaching the South China Sea, bordered by China to the north and Laos and Cambodia to the west. The Vietnamese government offers attractive incentives for foreign investors, making it one of the top countries in Southeast Asia in terms of FDI inflows.
Advantages of registering a Vietnam company: 1、Excellent Location Vietnam has a particularly advantageous geographical location, with a long coastline (3,260 km) and many deep-water seaports, making it a gateway to international maritime cargo trade. In addition, Vietnam shares a border with China, making it very convenient for transportation. 2、Open Foreign Investment Policy Vietnam has always been open to the market, encouraging and attracting foreign investors through administrative procedures reform and investment incentives. The 2020 Investment Law and the 2020 Enterprise Law, effective January 1, 2021, further strengthen Vietnam’s open foreign investment policy by reducing some administrative investment procedures. 3、Young and rich workforce Vietnam is a country with a young demographic, with nearly 88% of the population aged 25-59 in the labor force, of which nearly 40% have graduated from high school and 23.1% have received a degree or certificate training. In addition, Vietnam’s workforce is appreciated for its hard work, high level of education and ease of training. Vietnam has also continued to invest more in education and training than other developing countries, which is one of Vietnam’s competitive advantages over other labor markets in the region. 4、Low labor cost comparison Despite the fact that the minimum wage in Vietnam is increasing every year, Vietnam is still a country with relatively low labor costs. Wages in Vietnam are still less than half of those in China. The low minimum wage and growing economy make it a good alternative to China. 5、Signed trade agreements with many countries Vietnam has an open economy and has signed bilateral and multilateral free trade agreements with many countries and regions to attract foreign investment into the country and to make investment more open and convenient. Examples include bilateral trade agreements with the United States, Korea, Japan, ASEAN Economic Community, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and the recently signed Vietnam-EU Free Trade Agreement (EVFTA). 6、Preferential Tax Policy Effective January 1, 2016, Vietnam’s corporate income tax rate was reduced from 22% to 20%, unless otherwise specified in the tax law (e.g., a preferential tax rate of 10% for certain high-tech enterprises and a higher rate of 32%-50% for enterprises in certain fields, such as natural resources such as oil and natural gas). This unified tax rate is applied to foreign-invested enterprises and domestic enterprises in Vietnam. In addition to income tax, Vietnam provides investors with certain benefits in terms of import and export tariffs and turnover taxes. For example, tariff and value-added tax exemptions are granted for the import of specific equipment and raw materials for production enterprises to encourage foreign investment. |
| Types of registered Vietnam companies |
| The main forms of foreign investment in Vietnam for the establishment of enterprises include
Limited liability company, joint stock company, representative office, branch office, etc. 1. Limited Liability Company The Vietnamese government allows wholly foreign-owned companies to operate in most industries, such as trade, manufacturing, information technology and education, and such limited liability companies can also start production operations to provide services to Vietnamese and foreign customers. The biggest advantage is that the procedure and approval process is relatively simple, so it is regarded as the most convenient and fast way to invest in Vietnam, especially for small and medium-sized enterprises, the limited liability company form is ideal for expanding business in Vietnam market. In addition, a limited liability company focuses on the protection of personal assets, and its shareholders are limited to the number of shares they hold and are externally liable. One shareholder can establish a limited liability company, and two to fifty shareholders can establish a multi-member limited liability company.
2. Joint Stock Company A company limited by shares may be established in whole or in part by foreign shareholders, and there are no strict restrictions on the nationality of shareholders. The minimum number of shareholders is three, with no upper limit. The advantage is that the company is allowed to issue shares and can be listed on the Vietnam Stock Exchange. Therefore, it is an ideal choice for medium and large enterprises and even multinational group companies to invest in Vietnam.
3. Representative Office (RO) Foreign companies that have been in business for more than one year may set up a representative office in Vietnam. Although the Vietnam Representative Office can be 100% foreign owned, the drawback is that it is not allowed to engage in production related business activities in Vietnam and can only participate in market research and promote the business of its parent company.
4. Branch office According to Decree No. 07/2016/NĐ-CP, foreign companies that have been operating for more than 5 years are eligible to establish a branch in Vietnam. In particular, the type of business of the Vietnam branch of a foreign company must be consistent with the business line of the company itself. The advantages are that the branch is easy to set up, does not require any shareholders, no capital requirements, just a local representative (foreign/local). The disadvantage is that it does not have a separate name, it does not have a separate legal identity, and its financial statements must be consolidated and reported with the parent company every year, making the establishment procedure relatively complicated. In addition, the tax rate, which is a major concern for Chinese enterprises, is not different for different types of companies registered in Vietnam, as the corporate income tax rate is 20%. However, the representative office cannot conduct business activities, i.e., it cannot constitute a purchase and sale relationship in the local area and is therefore not subject to income tax.
Registration of Vietnam companies is generally registered under two names ❶ Personal name ❷ Corporate name 1、Documents required to register a Vietnam company in the name of an individual Company name: Present 1-3 company names to help the client to start the company name approval; the company name cannot be in Chinese or other foreign language. The company’s directors and shareholders: A scanned copy of the shareholder’s passport; proof of the shareholder’s overseas deposit, which must be larger than the amount of investment capital, the legal representative’s passport and proof of address for the last three months (e.g. utility bill, telephone bill or bank statement). Registered capital: There is no restriction on the total amount of investment and registered capital for foreign-invested enterprises in Vietnam, provided that the authorized capital is not less than 30% of the investment. In the case of encouragement type and large investment, the authorized capital is allowed to be reduced to 20% of the investment amount. In this actual operation, we spent US$100,000 in registered capital (about RMB 680,000). If it is less than USD 100,000, the local government usually will not approve it. During the registration process, the final location of registration was in Ninh Binh, Vietnam because Vietnam has adjusted the registered capital for production enterprises. Scope of business：We can be a trading, production and service company. Registered address: The government requires that every company must have a registered address in Vietnam, and if needed, the registered address can be provided by our company. 2、Business name registration Vietnam company required materials Company name: Present 1-3 company names, start company name approval and articles of incorporation The company’s directors and shareholders: the latest register of directors and shareholders, the most recent annual return, or a certificate of office for the last six months (or other document of an equivalent nature describing the corporate structure of the body corporate) The registered capital: the business license of the foreign company; the articles of association of the foreign enterprise; the financial statements of the foreign company for the past 2 years (stamped with the official seal of the foreign company and sealed with the same seal). ● Scope of operation: Basic background information of the wholly foreign-owned company in Vietnam, such as the scope of business (main business operation), expected number of employees to be recruited, expected turnover in the first year, etc. Registered address: The government requires that every company must have a registered address in Vietnam, and if needed, the registered address can be provided by our company. Proposed accounting year: The proposed accounting year of a wholly foreign-owned company in Vietnam. (Normally, the accounting year in Vietnam starts from January 1 to December 31 of the Western calendar) Notarized certification: Notarized certification is required |
| Three, Vietnam company registration process |
| 1、Company name verification: please confirm the name of the company you want to register, after checking the register no duplicate names can be used; 2、Confirm the identity of the shareholders, the proportion of shares, provide personal identification and contact information, and sign the contract of entrusted registration; 3、Sign the whole set of company registration documents (submitted to the Vietnam Company Registry); 4、Pay the deposit/full payment of the registered company; 5、Prepare the registration documents and carry out double diplomatic certification at the location; 6. Send the original documents to Vietnam for translation + notarization (10-15 working days) after the notarized documents are verified as correct. 7、Use the translated and notarized documents to apply for investment license in Vietnam (15-20 working days) 8、After obtaining the investment license, apply for business license and publicize the use of seal (5-7 working days) 9、Apply for tax number, open bank account, purchase invoice and start business. Time to register Vietnam company Generally, it takes about 70 to 90 working days to incorporate a wholly foreign-owned company in Vietnam if the scope of business of the wholly foreign-owned company does not require additional licenses or permits.
Notes on registering a Vietnam company 1. must have a company address in order to register a company in Vietnam; 2. All companies in Vietnam must have at least one resident director and are not required to have residency status at the time of incorporation, but are required to have a Vietnamese residence address. 3. To register a wholly foreign-owned company in Vietnam, a capital account must be opened in a local Vietnamese bank and the registered capital must be paid in. 4. The first step for any foreign company to register in Vietnam is to obtain an investment license from the Ministry of Planning and Investment (DPI), or a ministerial approval if your industry does not fall under any WTO scope, or if it is a foreign investment that is not regulated by local Vietnamese law. |
