How to Obtain Business Registration Certificate in Vietnam?

 Every organization and individual wishing to set up a foreign owned company in Vietnam shall need to meet some specifics conditions as promulgated under the Law on Investment and Law on Enterprise before that could obtain business registration certificate in Vietnam to do business.

In specific areas being considered as conditional investment, the investor shall also need to consult with the law governing the areas of investment. Once the investment registration certificate is completed, the investor has the obligation to apply and obtain business registration in Vietnam.

What are procedure to obtain business registration certificate in Vietnam

The procedure to register for a certificate of enterprise registration of a joint stock company or limited liability with two or more members are herein mentioned:

Dossiers:

i) Application form for enterprise registration

ii) The company’s charter.

iii) A list of founding shareholders and shareholders being foreign investors/ a list of capital contribution members.

iv) Valid copies of:

Copies of the ID card or other ID papers of founding shareholders and foreign investors/members being individuals; list of authorized representatives of foreign shareholders being organizations.

Decision on establishment, certificate of business registration, or an equivalent document of the organization and the letter of authorization; the ID card or other ID papers of the authorized representatives of founding shareholders and foreign investors being organizations.

If shareholders are foreign organizations, the copy of the certificate of business registration or an equivalent document must be notarized, legalized and authenticated.

The Certificate of Investment registration of the foreign investors as prescribed by the Law on Investment.

State Authority: Business registration office of the province where the enterprise’s headquarters is situated.

Period: Within 03 working days from the full receipt of the dossiers

Result: Business registration office shall issue the certificate of enterprise registration or if the application is not satisfactory, business registration office shall inform the applicant of necessary revisions and supplementation to company.

In general, Vietnam government encourages foreign direct investment. If the investor faces challenges at state authority, whom do not issue notification or request of supplementation to the application for enterprise registration, the investor cold lodge a complaint as prescribed by regulations of law on complaints and denunciation to the state authority to protect its right in doing business and investment in Vietnam. 

The enterprise is entitled to do business from the issuance date of the certificate of enterprise registration. For conditional business lines, enterprises are entitled to engage in conditional business lines if they satisfy all conditions and are capable to maintain fulfillment of such conditions throughout their operation.

About ANT Lawyers, a law firm in Vietnam

We assist the clients to learn about business environment in Vietnam, provide legal advice, guide the client to set up company in Vietnam and apply for investment registration in Vietnam, apply and obtain business registration certificate in Vietnam and other works post licensing to help the company complies.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

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How to Set Up Company in Hanoi?

 The Law on investment  has a lot of investment incentive policies in economic sectors in Vietnam for foreign investors hence encouraged them to do business in Vietnam including to set up company in Hanoi, Hai Phong, Da Nang, Ho Chi Minh City, Binh Duong and other cities and provinces all over the country.

Why investors set up company in Hanoi?

Hanoi is the capital of Vietnam and has some characteristics that fit certain investors’ business needs.  

According to the results of the Vietnam Provincial Competitiveness Index (PCI) in 2021, Hanoi ranked 10th (68.6 points) in the ranking of 63 provinces and cities.  In particular, Hanoi is highly appreciated for its infrastructure, business support services. 

How to set up company in Hanoi?

Foreign investors that invest in Vietnam in general and Hanoi in particular for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted Investment Registration Certificates (“IRC”) and Enterprise Registration Certificate (“ERC”).

Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate.

The investor applies for IRC in Hanoi need to have a possible project which is accepted by the Government (The Department of Planning and Investment of Hanoi City).

The dossier on applying for IRC:

For Investment Registration Certificate, the investor must prepare the dossier included:
i) An application form for execution of the investment project, including a commitment to incur all costs and risks if the project is not approved;
ii) A document about the investor’s legal status;
iii) Document(s) proving the financial capacity of the investor including at least one of the following documents: the investor’s financial statements for the last two years; commitment of a parent company to provide financial support; commitment of a financial institution to provide financial support; guarantee for the investor’s financial capacity; other document proving the investor’s financial capacity;
iv) Proposal for the investment project including the following main contents: investor or method of investor selection, investment objectives, investment scale, investment capital and plan for raising capital, location, duration and schedule of the investment project, information about the current use of land in the location of the project and proposed demand for land use (if any), demand for labor, proposal for investment incentives, impact and socio – economic efficiency of the project and preliminary assessment of environmental impact (if any) in accordance with regulations of law on environmental protection.
If the law on construction requires formulation of a pre-feasibility study report, the investor is entitled to submit the pre-feasibility study report instead of a proposal for the investment project.
v) If the project does not require the State to allocate or lease out land or to permit land repurposing, a copy of the document regarding the land use rights or other document identifying the right to use the location for execution of the investment project is required to be submitted;
vi) Contents of the explanation for the technology to be used in the investment project if the project requires appraisal and collection of opinions on the technology in accordance with the Law on Technology Transfer;
vii) The business cooperation contract if the investment project is executed under a business cooperation contract;
viii) Other documents relating to the investment project, and requirements on the eligibility and capacity of the investor in accordance with regulations of law (if any).

After having the project, the investor needs to apply for Enterprise Registration Certificate (ERC).

The dossier to apply for ERC included:

i) An application for enterprise registration;
ii) The enterprise’s charter;
iii) A list of members of a limited liability company with two or more members or a list of general partners;
iv) A notarized copy of identity card or valid passport of individual member;
v) A notarized copy of the Enterprise Registration Certificate of the organization’s member;
vi) A notarized copy of valid identity card or passport of the organization’s legal representative;
vii) The copy of Investment Registration Certificate.

The time for applying the IRC is 15 working days and the time for applying the company ERC is 03 working days after the date of submitting the valid dossier.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has attorneys in Hanoi, Ho Chi Minh and Danang, and will help customers conveniently setting up business in Vietnam and doing business in Vietnam.

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Benefits of Investors in Setting up a Business in Da Nang

 Da Nang is one of the five major cities in Vietnam, having a geographical location that is particularly conducive to rapid and sustainable economic development. Da Nang has important transportation routes such as the China-ASEAN international railway crossings, seaports and international airports. Foreign investors will find many benefits in setting up business in Da Nang.

Why it is attractive for setting up business in Da Nang?

Da Nang is one of the tourist centers of the country, having rich tourism potential including natural tourism resources and humanities. Da Nang has many famous scenic spots such as Hai Van pass, Son Tra mountain, Ba Na hills, Ngu Hanh Son, Cham Museum or My Khe beach have been voted by Forbes magazine as one of the six most beautiful beaches in the world. These conditions are favorable for the development of diversified forms of tourism such as travel, research, cultural.

Da Nang has infrastructure development, four types of roads are popular: high way, rail way, international airport and international seaport.

Da Nang has the sea lanes to most major ports in Vietnam and around the world. It helps investor more convenient to arrange logistics in Vietnam and other countries.

Moreover, Da Nang’s water supply, electricity supply and communication system have developed rapidly and are increasingly modernized, ranking third in the whole country after Hanoi and Ho Chi Minh City.  Da Nang has Da Nang Port, which help investor in import/export activities easily.

The advantage of the policy mechanism is that Da Nang has also had great support the mechanism and policies for socio-economic development of Da Nang. Since Da Nang was recognized as a national grade I city in 2003, Da Nang has implemented guidelines, regulatory directions and the issuance of specific regulatory mechanisms that support investors in setting up business in Da Nang.

With the support from the Central Government, Da Nang authorities have also developed appropriate policies and mechanisms to facilitate the development of the economy, such as the one-stop-shopping mechanism. For examples: Procedures related to investment, investment locations, land clearance and handover plan, the granting of business registration certificates and investment preference certificates would be carried out under the one-stop-shopping mechanism at the provincial municipal all of them are resolved at Da Nang Administration Center.

With open minded approach, the legal setting in Da Nang is such that investors making meaningful investments and investments favored by the Da Nang’s government can negotiate practical and favorable arrangements from preferential export taxes to work force advantages.

Tradition of unity, consensus of people and the dynamism and creativity of the leadership are the advantages that has mobilized the strength, the most important and decisive resource for the development of Da Nang. The determination of leaders, city authorities in building programs, projects with the support of the people, investors, enterprises, etc that help investors who will invest in Da Nang enjoy the highest benefits in setting up business in Da Nang in particular, and doing business in Vietnam in general.

How lawyers in Da Nang can help investors in setting up business in Da Nang?

Having lawyers in Da Nang with a thorough understanding of local laws and the intricacies of doing business operations at the local level can provide valuable insight and ensure investors have the peace of mind they need to have successful business operations. Knowing local customs, traditions, and how to navigate the obstacles where contacting a Da Nang-based lawyer can help investors get a local perspective and determine proper business set-up strategies. Additionally, an experienced Da Nang lawyer can assist with advising the correct business company type and appropriate license if necessary; being familiar with the various laws at a municipal level; working with local officials to acquire all applicable permits and be aware of all regulatory factors, including taxation; and be always prepared in the event of any dispute to ensure that client complies with local regulations. Thus a lawyer with a deep knowledge and understanding of Da Nang can provide invaluable assistance that will lead investors to successfully running their businesses in the region.

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Establishing a Company in Vietnam: A Comprehensive Guide for Foreign Investors

 Vietnam has emerged as a preferred destination for foreign investors, driven by its dynamic economy, strategic location, and supportive government policies.

Establishing a company in Vietnam offers opportunities amidst the global economic stagnation exacerbated by geopolitical tensions.

With a young population, a growing middle-income working class, and abundant talent in information technology, Vietnam presents a strong ground for business ventures.

However, as with any overseas investment, entering the Vietnamese market comes with its own set of challenges and risks. This guide aims to provide foreign investors with essential insights and practical steps for successfully establishing a company in Vietnam.

Understanding the Vietnamese Market

The Economic Landscape

Vietnam’s economy has been one of the fastest-growing in Southeast Asia, consistently achieving robust GDP growth rates. Despite global economic uncertainties, Vietnam’s strategic initiatives and trade agreements have fortified its economic resilience. The country’s economic policies are geared towards attracting foreign direct investment (FDI), with various incentives and support mechanisms in place for foreign businesses.

Demographic Advantage

Vietnam boasts a young and dynamic population. This demographic trend is accompanied by a burgeoning middle-income class, which fuels domestic consumption and drives economic growth. The young workforce is not only abundant but also increasingly skilled, particularly in sectors such as information technology.

Entrepreneurial Spirit

The entrepreneurial spirit is deeply ingrained in Vietnamese culture. Small and medium-sized enterprises (SMEs) are the backbone of the economy, and there is a growing trend of startups and innovation-driven businesses. This entrepreneurial environment fosters a competitive yet collaborative business landscape, making Vietnam an exciting place for new ventures.

Types of Business Entities in Vietnam

When establishing a company in Vietnam, foreign investors can choose from several types of business entities, each with its own legal and operational implications. The most common types include:

Limited Liability Company (LLC)

An LLC is suitable for small and medium-sized enterprises. It can be wholly foreign-owned or a joint venture with Vietnamese partners. The liability of the owners is limited to their capital contributions, making it a secure option for foreign investors.

Joint-Stock Company (JSC)

A JSC is ideal for larger businesses and requires at least three shareholders. It can also be wholly foreign-owned or a joint venture. JSCs are often chosen for ventures that anticipate substantial growth and potential public listings.

Other forms of entities with different sets of benefits could be established for different purposes as following:

Representative Office

A representative office is suitable for foreign companies looking to explore the Vietnamese market without engaging in direct business activities. It allows companies to conduct market research and establish a business presence but cannot generate revenue.

Branch Office

A branch office can conduct business activities and generate revenue. It must have a parent company overseas and operates as an extension of the foreign entity.

Legal Framework for Establishing a Company in Vietnam

Investment Laws and Regulations

The legal framework for foreign investment in Vietnam is primarily governed by the Law on Investment and the Law on Enterprises. These laws outline the requirements, procedures, and incentives for foreign investors. Key government bodies involved in regulating foreign investment include the Ministry of Planning and Investment (MPI) and the provincial Departments of Planning and Investment (DPI).

Investment Registration Certificate (IRC)

The first step in establishing a company in Vietnam is obtaining an Investment Registration Certificate (IRC). The IRC application process involves:

• Preparation: Collect necessary documents, including the application form, investor’s legal status documents, financial statements, and a detailed business plan.

• Submission: Submit the application to the DPI.

• Approval: The DPI reviews and approves the IRC between 15 – 25 working days for non conditional projects.

Enterprise Registration Certificate (ERC)

After obtaining the IRC, the next step is to secure an Enterprise Registration Certificate (ERC). The ERC application process involves:

• Preparation: Gather documents such as the application form, company charter, list of members/shareholders, and the IRC.

• Submission: Submit the application to the DPI.

• Approval: The ERC is typically issued within 3 – 5 working days.

Post-Registration Procedures Establishing a Company in Vietnam

Once the IRC and ERC are obtained, there are several post-registration procedures that must be completed to ensure the company is legally operational:

Seal Carving

Every company in Vietnam is required to have an official seal. The seal is used to authenticate documents and can be obtained from a licensed seal carving service.

Tax Registration

Registering with the local tax office is mandatory. This involves obtaining a tax code and registering for Value Added Tax (VAT) and corporate income tax (CIT).

Bank Account

Opening a corporate bank account in Vietnam is necessary for all financial transactions. This involves providing the bank with the company’s IRC, ERC, and other relevant documents.

Capital Contribution

The capital contribution, as stated in the company charter, must be deposited within the stipulated timeframe, usually 90 days from the issuance of the ERC.

Public Announcement

The company registration information must be published in the National Business Registration Portal. This public announcement ensures transparency and compliance with Vietnamese laws.

Key Considerations for Foreign Investors Establishing a Company in Vietnam

Capital Requirements

Different sectors have varying minimum capital requirements. It is crucial to ensure that the proposed capital meets the regulatory standards for the specific industry.

Business Scope

Clearly defining the business activities in the company charter is essential. This ensures that the company’s operations align with local regulations and avoid any legal complications.

Compliance with Vietnamese Laws

Maintaining compliance with Vietnamese laws and regulations is critical. This includes adhering to tax obligations, financial reporting, and labor laws. Engaging a local legal advisor can help navigate these requirements effectively.

Risks and Challenges

While Vietnam presents numerous opportunities, there are inherent risks and challenges associated with establishing a company in Vietnam:

Cultural Differences

Understanding and adapting to Vietnamese culture and business practices is vital. The Vietnamese way of doing business often emphasizes relationships and trust, which can differ significantly from Western practices.

Market Entry Risks

Entering a new market always involves risks, such as unfamiliar regulatory environments, competition, and market dynamics. Thorough market research and strategic planning are essential to mitigate these risks.

Different Buying Behaviors

Vietnamese consumers have unique buying behaviors and preferences. Tailoring products and marketing strategies to meet local demands is crucial for success.

Legal and Regulatory Risks

Vietnam’s legal and regulatory framework can be complex and subject to change. Staying informed about the latest laws and regulations is necessary to ensure compliance.

Opportunities in the Vietnamese Market When Establishing a Company in Vietnam

Despite the challenges, the Vietnamese market offers significant opportunities for foreign investors:

Growing Economy

Vietnam’s robust economic growth and increasing integration into global trade networks provide a favorable environment for business expansion.

Young and Skilled Workforce

The young and increasingly skilled workforce, particularly in information technology and engineering, is a valuable asset for businesses.

Government Incentives

The Vietnamese government offers various incentives for foreign investors, including tax breaks, reduced land lease fees, and streamlined administrative processes.

Strategic Location

Vietnam’s strategic location in Southeast Asia provides access to major global markets, making it an ideal hub for business operations.

Establishing a company in Vietnam is a promising venture that offers numerous opportunities amidst a rapidly growing economy.

The process involves navigating a well-defined legal framework, understanding the local market, and addressing the unique challenges of doing business in a foreign country.

By following the steps outlined in this guide and leveraging the insights provided, foreign investors can establish and grow their businesses in Vietnam.

For personalized assistance or more detailed information, consulting with a legal expert in Vietnam can help streamline the process and ensure full compliance with local laws.

Embrace the opportunities and prepare for the challenges, as establishing a company in Vietnam can lead to significant rewards in one of Asia’s most dynamic economies.

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