Why to start a business in Vietnam?
In recent years, Vietnam has become an attractive destination for foreign investment thanks to its advantages of security, political stability, and favorable geographical position to trade with the world. This is both the connection center of the region and the gateway to penetrate the economies in the western region of the Indochina Peninsula. In addition, the Vietnam government has increasingly been offering more preferential policies to create favorable conditions for foreign investors to start a business in Vietnam.
How to start a business in Vietnam?
Starting a Business in Vietnam as a Foreigner in 5 Steps
1.What is your business structure in Vietnam?
2.What business do you do in Vietnam?
3.Where do you locate the business in Vietnam?
4.What do you name your business?
5.What certificates to apply for your business?
What is your business structure in Vietnam?
To start a business in Vietnam, investors first need to choose for themselves an appropriate type of business based on the number of capital contributors, the amount of capital contributed, and the business’s purse.
According to the provisions of Vietnam law, foreign individuals and organizations can start a business in Vietnam to establish a limited liability company or a joint stock company or a partnership or a private enterprise.
What business do you do in Vietnam?
The next issue that needs to be considered is the business line.
In order for the company to be able to operate, the company must register the appropriate business lines, related to business activities.
Non-conditional businesses
If the selected line of business does not require conditions, the enterprise can go into operation after the establishment of the company. This is considered non-conditional business area which most of company would do.
Conditional businesses
However, if the investor chooses a conditional business line to start a business in Vietnam, the enterprise must meet the necessary requirements, apply for a business license as prescribed, and then go into operation. This is considered conditional investment area where there are some restrictions being required license, minimum charter capital, foreign ownership ratio…
Where do you locate the business in Vietnam?
Investors also need to choose a location for their business, which is legally allowed to conduct business activities. The company address must be located in the territory of Vietnam, and comply with requirement corresponding to purpose of business i.e. company address can not be in an apartment building or a dormitory for living purposes only; factory location has to be at proper zone for industrial purpose…
What do you name your business?
In order to serve the management of the State and facilitate business activities, newly established businesses need to have their own name and this proper name must be unique, not be the same or similar to previously registered businesses.
Enterprises are not allowed to use the names of functional agencies, state management agencies to name the company. The name of the business must include the type of company and proper name.
To avoid duplication with other companies, businesses can use abbreviations or English names, but must ensure that the company name will not cause confusion, without adding prefixes, suffixes or cultural symbols in the name of the business.
What certificates to apply for your business?
Investment registration certificate in Vietnam
The investors need to apply for an Investment Registration Certificate at a competent authority in Vietnam. This is a mandatory procedure for all projects that want to establish a new legal entity in Vietnam.
The processing time for an investment certificate application is around 30 days depending on the specific project.
Enterprise registration certificate in Vietnam
After being granted an Investment Registration Certificate, foreign individuals and organizations need to prepare an application for an Enterprise Registration Certificate at the Department of Planning and Investment which would take around 7 days. Completing this procedure, the enterprise has the legal status according to the provisions of the Law on Enterprises of Vietnam to start a business in Vietnam.
From day one since you start a business in Vietnam commencing its operation, the company could by itself or hire professional to assist with monthly compliance service i.e., submit foreign labour reports, submit investment report, submit tax report, submit health and insurance reports to authorities to avoid encountering penalties.
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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You could learn more about ANT Lawyers Foreign Investment Practice or contact our lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at +84 28 730 86 529.