Vietnam has become one of the most attractive destinations for entrepreneurs and foreign investors due to its strong economic growth, strategic location, and business-friendly policies. Setting up a company in Vietnam is a lucrative opportunity, but it requires an understanding of the legal framework, procedures, and compliance requirements.
In this guide, we will provide an in-depth look at how to set up a company in Vietnam, covering company types, registration steps, required documents, legal considerations, and business regulations.
Why Set Up a Company in Vietnam?
Vietnam offers a range of benefits to businesses, including:
- Strong economic growth: Vietnam's GDP continues to grow steadily.
- Strategic trade location: A key player in ASEAN and international markets.
- Government incentives: Various tax and investment incentives for foreign businesses.
- Competitive labor costs: Affordable skilled workforce compared to neighboring countries.
- Growing domestic market: Expanding middle-class consumer base.
Types of Business Entities in Vietnam
Before starting your company, you need to decide on the legal structure that best suits your business model. The main types of business entities in Vietnam include:
1. Limited Liability Company (LLC)
- Suitable for small and medium-sized businesses.
- Can be established by a single investor or multiple investors.
- Limited liability for owners.
2. Joint Stock Company (JSC)
- Ideal for businesses planning to raise capital through shares.
- Requires at least three shareholders.
- More complex governance structure than an LLC.
3. Representative Office (RO)
- Suitable for foreign businesses exploring the Vietnamese market.
- Cannot conduct revenue-generating activities.
4. Branch Office
- A foreign company’s branch can conduct commercial activities.
- Subject to compliance with local laws and tax regulations.
Steps to Set Up a Company in Vietnam
Step 1: Choose the Right Business Structure
Select the most suitable company type based on your investment goals and industry requirements.
Step 2: Obtain an Investment Registration Certificate (IRC)
- Required for foreign investors.
- Issued by the Department of Planning and Investment (DPI).
- Processing time: 15-30 working days.
Step 3: Apply for an Enterprise Registration Certificate (ERC)
- Issued by the DPI.
- Contains company details, business scope, and legal representative information.
- Processing time: 5-7 working days.
Step 4: Register the Company Seal and Open a Bank Account
- Obtain a company seal from an authorized provider.
- Open a corporate bank account for financial transactions.
Step 5: Tax Registration and Compliance
- Register for a tax identification number (TIN).
- Declare corporate taxes (CIT, VAT, and PIT) as required.
Step 6: Obtain Necessary Business Licenses
- Depending on your industry, additional licenses may be required (e.g., retail, manufacturing, education).
Required Documents for Company Registration
- Application for Investment Registration Certificate (IRC)
- Application for Enterprise Registration Certificate (ERC)
- Company charter (Articles of Association)
- List of shareholders and capital contributions
- Legalized copies of investors’ passports or business registration certificates
- Lease agreement for the company’s office location
- Bank account confirmation letter (for capital contribution verification)
Costs Involved in Setting Up a Company in Vietnam
The cost of setting up a company depends on various factors, including business structure and industry. Key costs include:
- Government fees for IRC and ERC issuance
- Legal and consulting fees
- Office rental costs
- Capital contribution requirements
Taxation and Compliance Requirements
Companies in Vietnam must comply with tax and financial regulations, including:
- Corporate Income Tax (CIT): Standard rate of 20%.
- Value-Added Tax (VAT): Standard rate of 10%.
- Personal Income Tax (PIT): Progressive rates from 5% to 35%.
- Annual financial reporting and tax filings are mandatory.
Setting up a company in Vietnam requires careful planning and adherence to local laws. By understanding the company registration process, business structures, and legal requirements, investors can establish a successful enterprise in Vietnam’s thriving market.
If you need professional assistance, consulting with a business advisory firm can help streamline the process and ensure compliance with Vietnam’s regulations.
