Set up company in Ho Chi Minh City: the Essential Guide

 Vietnam’s financial capital, Ho Chi Minh City, is a vibrant metropolis of over 10 million inhabitants and accounts for one-third of Vietnam’s total GDP. It is widely regarded as one of the fastest expanding marketplaces for technology, manufacturing, and the top developing property market in Asia-Pacific. Hence, the investors that set up company in Ho Chi Minh City could enjoy the opportunities the Vietnamese market has to offer.

Set up company in Ho Chi Minh City can be made easy

Vietnam has offered first mover advantages for foreign investors to tap into HCMC’s market and contribute to the growing economy throughout the years.  There are still huge potentials in this growing market because of abundant labour skilled resources, growing middle income consumers.  Hence, we present all the information that you need to know before investing and setting up your own company in Ho Chi Minh City.

Company Setup Process and Requirements in Ho Chi Minh City
In Vietnam, opening a business as a foreigner is a breeze since you’re allowed to own up to 100% of any company in the most of industries. However, there are some sectors with restrictions on foreign ownership i.e. advertising, tourism, insurance, banking… In such situations, foreign investors must seek the assistance of a Vietnamese joint venture partner.

International businesses practice must be adhered to as World Trade Organization (WTO) agreements. Nevertheless, there are certain areas that approval from the corresponding ministries in Vietnam is essential for business operations i.e. Minimum Capital Requirement,  Legal Structures for Company Registration in Vietnam, Foreign Ownership Ratio…

Step by step guide to set up company in Ho Chi Minh City

Choose the right business structure
Choosing the right business structure for your company is crucial. In Vietnam, the most common types of business structures are Limited Liability Companies (LLCs), Joint-Stock Companies (JSCs), and Representative Offices. Each structure has its own advantages and disadvantages, so it’s important to choose the one that best suits the needs of your business

Compliance with Vietnamese laws and regulations
As a foreign entrepreneur, it is crucial to comply with Vietnamese laws and regulations. Make sure you have a solid understanding of the legal requirements for your specific industry and business structure. Failing to comply with the laws and regulations could result in severe penalties and fines

Register your business with the Department of Planning and Investment
One of the first steps in setting up a business in Vietnam is to register your company with the Department of Planning and Investment. You’ll need to submit the necessary documents such as a copy of the company’s charter, list of shareholders, and copy of your passport.

Obtain a business license
After your company is registered, you might need to apply for a business license. The type of license you need depends on the nature of your business. For instance, for retail trading, business license is required. The process for obtaining a business license may take some time, so it is recommended to work with a local lawyer in Vietnam to ensure a smooth and timely process.

Register for taxes
All companies in Vietnam are required to register for taxes. You’ll need to obtain a tax code and register for VAT (Value Added Tax) and CIT (Corporate Income Tax). In addition, you will need to keep careful records of your business transactions and finances to comply with tax regulations.

Open a bank account
Finally, you’ll need to open a bank account for your business. You’ll need to provide your business license and other necessary documents, and deposit the minimum required amount for covering the fee and expenses of maintaining the account.  The direct capital investment account (DICA) must be opened to receive the investment amount from oversea as committed in your investment proposal.  Vietnam has been depending on Foreign Direct Investment for economic growth hence this investment is very important for the government to track and you would better follow to transfer as committed.  It is also suggested you consider the bank that staff could speak English for better banking experience. 

In conclusion, setting up a business in Vietnam could be a complex process. It is recommended to work with a local lawyer in Vietnam to navigate the legal requirements and ensure compliance with Vietnamese laws and regulations. With the right guidance and preparation, your company can successfully establish itself in the Vietnamese market.

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 lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

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What Are Required Documents to Set up Limited Liability Company in Vietnam?

 When doing business in Vietnam, the business people find benefits to set up company as a separate legal entity for various purposes i.e. to have an entity to sign contract, open bank account, hire personnel and pay them properly, and to deduct expenses for tax optimization. The most popular form is to set up limited liability company in Vietnam (LLC).

Dossiers to Set up Limited Liability Company in Vietnam

-Application for business registration according to a uniform form prescribed by the competent business registration agency.

-Draft of Company’s charter

-List of members and accompanying documents below:

+ For individual members: copy of ID card, passport or other legal personal identification

+ For members that are organizations: copy of the Establishment Decision, Business Registration Certificate or other equivalent documents of the organization; Authorization document, ID card, passport or other legal personal identification of the authorized representative.

+ For members that are foreign organizations, a copy of the Business Registration Certificate must be authenticated by the agency where the organization was registered no more than three months before the date of submitting the business registration application.

-Document certifying legal capital from a competent agency or organization for companies conducting business in industries and professions that according to the law must have legal capital.

-Practicing certificate of the Director or General Director and other individuals for companies conducting business in lines and professions that, according to the law, must have a practicing certificate.

Procedures to Set up Limited Liability Company in Vietnam

1. The business founders submit a complete business registration application according to the provisions of law at the competent business registration agency and must be responsible for the truthfulness and accuracy of the content of the business registration application.

2. The business registration agency is responsible for reviewing business registration documents.

3. If the application is complete, a business registration certificate will be issued within 10 working days from the date of receipt. If the authority refuses to issue a Business Registration Certificate, it must notify the applicants in writing. The refusal notice must clearly state the reason for refusal and points that need to be amended and supplemented.

The business registration agency reviews and is responsible for the validity of the documents when issuing the Business Registration Certificate; The founder may not be required to submit additional documents not prescribed by this law.

The deadline for granting a Business Registration Certificate associated with a specific investment project shall comply with the provisions of law.

How Lawyers in Vietnam Could Help Business People to Set up Limited Liability Company in Vietnam? In the company’s internal regulations.

Setting up a limited liability company (LLC) in Vietnam is a pivotal step for entrepreneurs seeking to establish a robust legal presence in the country’s dynamic business landscape. While the process might seem straightforward, engaging experienced lawyers in Vietnam brings significant value, ensuring a seamless and legally compliant establishment. Here’s a detailed exploration of the value-added services that lawyers provide in assisting business people to set up limited liability company in Vietnam.

1. Expertise in Vietnamese Legal Landscape

Vietnam lawyers possess in-depth knowledge of Vietnam’s legal framework, ensuring that the establishment process adheres to the latest laws and regulations. Navigating the intricacies of Vietnamese corporate law can be challenging for those unfamiliar with the local legal landscape. Lawyers provide clarity and guide entrepreneurs through the legal requirements, minimizing risks associated with regulatory non-compliance.

2. Tailored Legal Advice

Every business is unique, and Vietnam lawyers understand the importance of providing tailored legal advice. They assess the specific needs and objectives of the business, offering guidance on the most suitable corporate structure, drafting the company’s charter, and ensuring that the legal framework aligns with the business’s long-term goals.

3. Document Drafting and Review

The process set up limited liability company in Vietnam involves drafting essential documents such as the company’s charter. Vietnam lawyers play a crucial role in meticulously drafting and reviewing these documents to ensure they are legally sound and align with the client’s intentions. Thorough document preparation contributes to the smooth registration process and establishes a solid legal foundation for the company.

4. Compliance Assurance

Compliance with local regulations is paramount to the success of any business. Vietnam lawyers actively engage in ensuring that all legal requirements for business registration are met, from submitting the correct application forms to validating the legal capital requirement. Their expertise in compliance matters safeguards the business from potential legal issues and penalties.

5. Handling Business Registration Application

Vietnam lawyers take charge of preparing and submitting the business registration application, a critical step in the process to set up limited liability company in Vietnam. They navigate the bureaucracy efficiently, ensuring that the application is complete and accurate. This proactive approach accelerates the registration process and minimizes delays.

6. Resolving Legal Hurdles

Unexpected legal challenges can arise during the registration process to set up limited liability company in Vietnam. Vietnam lawyers are equipped to address and resolve these hurdles, be it discrepancies in documentation or unforeseen legal requirements. Their ability to navigate legal obstacles contributes to a more efficient and stress-free registration experience for the business owner.

7. Risk Mitigation

Vietnam lawyers are adept at identifying potential risks associated with the process set up limited liability company in Vietnam. Through thorough legal analysis, they assess and mitigate risks, providing proactive solutions to potential legal challenges that may arise during or after the registration process. This risk management approach protects the business’s interests and enhances its resilience in the market.

8. Continuous Legal Support

Beyond the initial registration, Vietnam lawyers provide ongoing legal support after the process to set up limited liability company in Vietnam. This includes addressing any legal queries, assisting with compliance matters, and advising on legal aspects of business operations. Continuous legal support ensures that the company remains in compliance with evolving legal requirements.

In conclusion, the value that Vietnam lawyers bring to the table when helping business people set up limited liability company in Vietnam extends far beyond the basic legal requirements. Their expertise, tailored advice, meticulous document handling, and commitment to compliance and risk mitigation collectively contribute to a seamless and legally sound establishment process. Engaging legal professionals ensures that entrepreneurs can focus on growing their business while having confidence in the legal foundation supporting their endeavors in the Vietnamese market starting with the process to set up limited liability company in Vietnam.

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Establish Company in Vietnam: What 8 Steps Guide to Follow?

 When foreign investors invest in Vietnam, they could establish company in Vietnam. Foreign investors have the right to choose the appropriate forms of enterprise such as a limited liability company, joint stock company, etc.

Why foreign investors invest and establish a company in Vietnam?

Vietnam offers a compelling environment for foreign investors seeking to establish company in Vietnam. There are several reasons why investors should consider Vietnam as their business destination.

Firstly, Vietnam boasts a rapidly growing economy, characterized by robust GDP growth and a favorable business climate. The country has implemented various market-oriented reforms, attracting foreign investment and fostering a dynamic entrepreneurial ecosystem.

Additionally, Vietnam benefits from a strategic geographical location, serving as a gateway to the vibrant markets of Southeast Asia. Its membership in regional trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the ASEAN Economic Community (AEC), provides investors with access to a vast consumer base and favorable trade conditions.

Furthermore, Vietnam offers a young and skilled workforce, with competitive labor costs, making it an attractive destination for manufacturing and service industries. The government has also taken steps to enhance transparency, streamline administrative procedures, and improve investor protection, demonstrating its commitment to facilitating business operations.

Overall, Vietnam presents a promising investment landscape, offering market potential, strategic advantages, and a supportive business and legal environment for investors seeking to establish a company in Vietnam.

8 Important Steps Guide to Establish Company in Vietnam

Step by step to set up company in Vietnam

Step 1: Register the investment project

Step 2: Apply for Certificate of investment registration

Step 3: Apply for the certificate of business registration

Step 4: Publish the content of the business registration

Step 5: Registered business stamp

Step 6: Notice of use of stamp

Step 7: Open bank account

Step 8: The post licensing procedures

Step 1: Register the investment project to establish company in Vietnam

Investors submit an investment project registration file to the Business Registration office of the province or city or the management board of an industrial zone, an export processing zone or a high-tech zone for the approval of an investment project during the period within 15 days (without time for clarification).

Step 2: Apply for Certificate of investment registration

After approval of the investment project, investors submit a valid record to the Department of Planning and Investment within 10 days to apply for a business registration certificate in Vietnam.

Step 3: Apply for the certificate of business registration

After obtaining the business registration certificate, the investor shall submit the application for enterprise registration certificate to the enterprise registration office within 3 days.

Step 4: Publish the content of the business registration

After being granted the certificate of enterprise registration, the investor shall disclose information about the enterprise on the national enterprise registration portal within 30 days, including the following information:
i, Business lines;
ii, List of founding shareholders and shareholders being foreign investors for joint-stock companies.

Step 5: Registered business stamp

The enterprise has the right to decide on the form, quantity and contents of the stamp of the enterprise. The content of the stamp must show the following information:
-Company’s name;
-Business code.

After receiving the legal entity stamp and before using the business stamp, the enterprise must send a notice on the stamp of the enterprise to the business registration office for publication in the National Information Portal on the business registration.

Step 6: Notice of use of stamp

After having stamp made, investors submit notices on use of stamp forms to the Investment registration agency. After receiving the record, the Investment registration agency issues a receipt for the enterprise, publishes the notice of the enterprise on the National Business Information Portal and issues a notice of the posting, stamp samples of enterprises, branches and representative offices for enterprises.

Step 7: Open bank account

Investors need to open two types of bank accounts, namely the investment capital account to receive the investment amount and the transaction account for conducting daily transaction in Vietnam.

Step 8: The post licensing procedures

For the conditional business lines:
Investors investing in conditional businesses lines as must apply certificate of business qualification, practicing certificates, professional liability insurance, legal capital requirements, etc. before conducting business in Vietnam.

How a law firm in Vietnam could help establish company in Vietnam?

Establishing a company in Vietnam requires careful adherence to these steps and compliance with relevant regulations, particularly for businesses with conditional requirements.

The above outlines the process to establish company in Vietnam for foreign investors. By engaging the services of a reliable law firm in Vietnam, investors can navigate through these steps efficiently and ensure compliance with legal requirements, ultimately facilitating a smooth and successful establishment of their business in the country.

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.

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