Common Company Incorporation Options
Number of Owners
1 - 50
Initial Capital Contribution
No minimal limitations, unless for specific industries (e.g. real estate)
Time
3 - 30 days (Depends on local or foreign)
Limited Liability Protection
Yes
Proof of Ownership
Charter Capital
Benefits
Easy to setup
Much less paperwork
Simple Structure
Tax
Corporate Tax at 20% (unless for specific industries)
If Charter Capital > 10 billion VND, 3 Million VND license tax/year
If Charter Capital < 10 billion VND, 2 Million VND license tax/year
Initial Tax exempted from 1st year
4-Step Guide to Incorporate in Vietnam
1
Determine Local or Foreign Entity
If you're setting up a business in Vietnam, the first crucial decision is to identify whether it will be a local company or involve foreign investment.
- Local Company: Only applicable for Vietnamese entities or individuals
- Foreign Direct Investment (FDI) Company: Necessary for non-Vietnamese entities or individuals. (any foreign charter capital contribution predetermines the company as a foreign invested company)
- Key Differences: There are less requirements on recurring reporting and less limitations for industry types and licenses needed for a local company.
3
Choose Your Business Location
In Vietnam, it's essential for companies, especially foreign ones, to have a business location that is not an apartment building used for residential purposes. This requirement is aligned with Vietnamese corporate law, ensuring that companies have a legitimate commercial address.
Business Location Requirements:
Lease and Land Use: Foreign companies need a lease contract and, if applicable, a Certificate of Land Use Rights.
Popular Options for Business Locations:
Co-working Spaces: With a significant number of co-working spaces in Vietnam, this option offers accessibility and flexibility, especially for new entrants exploring the market.
Virtual Offices: A practical choice for companies prioritizing cost-effectiveness, virtual offices provide a legal business address without the overhead of a physical office.
2
Choose Your Company Type
Selecting the right corporate type is a pivotal decision in setting up your business in Vietnam. You can choose over a few different companies for example:
- Limited Liability Companies
- Joint Stock Company
Each type of entity comes with its unique set-up requirements and processes, typically spanning a duration of one to three months for completion.
4
Register and Obtain Certifications
Register and Obtain Certifications Registering your business in Vietnam involves obtaining essential certifications for legal operation.
- Enterprise Registration Certificate (ERC): A vital document for all business types, confirming legal status.
- Investment Registration Certificate (IRC): Required for foreign investors, this certificate allows you to commence business activities.
- Time Frame: Typically, the process takes one to three months.
- Documentation
- Proof of funds
- Letter of intent from parent company (in case of owner/member/shareholder of company is an organization).
- Lease contract, Certificate of land use rights.
- Legal documents of owner/member/shareholder
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